Asset-Based Loans turn your business assets into
Asset-based lending uses your business assets as collateral to cover short-term cash flow demands.*
What Are Asset-Based Loans?
Asset-based loans give small businesses access to working capital through an agreement that’s secured by business collateral such as inventory, accounts receivable, equipment, or other property owned by the borrower. This means the lender is collateralized with an asset of the business. It’s important to note that the more liquid the business asset, the less risky the loan. An asset-based loan is a secured business loan that can be less risky and have bigger benefits than unsecured loans, including potentially lower rates.
Since businesses an asset-based loan is secured through collateral, lenders base their funds on the value of the secured assets. The financing available may vary from lender to lender and depends on the type of collateral the business has.
Use Business Assets as Collateral for Immediate Working Capital
You only need 2 important documents to apply.
Visit our online portal to fill out an application. Tell us about your company, goals, and objectives. We recommend having the necessary paperwork on hand to make the process even faster.
Our team will carefully review your business application. One of our trusted business advisors will reach out if we need any additional information.
Our team will send out the approved funds to your business bank account if approved.
Asset-based loans provide companies with access to operating capital via a secured loan utilizing company assets. Lenders typically use the loan-to-value ratio to calculate how much capital they are prepared to authorize, depending on the number of business assets.
If a borrower defaults on an asset-based loan, the lender may be entitled to seize or sell the collateral to cover the outstanding debt.
Asset-based financing is available to any company with a legitimate form of identity and three months’ worth of bank statements. A firm has a greater chance of obtaining an asset-based loan if, among other things, it has a solid track record of financial records, often purchases merchandise, and has reliable customers. The ideal candidates are often manufacturers, wholesalers, and service providers since they have seasonal business demands that call for quick access to working capital and have the assets necessary to receive a loan.
Lenders view asset-based loans as less risky since firms applying for them utilize their company assets as collateral to secure finance. The rewards given are better the lesser the risk. Asset-based loans often also provide lower interest rates.
Business assets with a value equal to or close to the required loan amount are utilized as collateral to secure funding. The most frequent assets utilized are accounts receivables, equipment, real estate, and commercial bank accounts, although lenders may also take other kinds of collateral.
Lenders have various requirements. Most lenders often offer asset-based loans to companies that are seen as stable. Past business bank records and repayments for earlier borrowing are evidence of this. Additionally, lenders seek out higher quantities of assets that might serve as collateral.
Various lenders require different kinds of corporate assets. However, as a general rule, assets that are considered include property, marketable securities, inventories, and accounts receivable.