What is Asset Based Lending?
Asset Based Lending is financing collateralized by the assets of a business including - but not limited to:
- accounts receivable
- purchase orders
- contracts
- invoices
- equipment
- machinery
- inventory
ABL's can be a quick, more flexible alternative to SBA financing and they are becoming increasingly popular in the current credit environment because banks are still having a tough time lending even with an SBA guarantee behind them.
Purchase Order Financing in particular is proving to be very useful for many businesses.
Advantages
Asset based lending is typically used by a business to satisfy short term cash needs and it has numerous advantages including:
- It is Financing that is actually available
- Speed - Asset based loans can be approved in days and closed very quickly.
- Credit - Loans are approved based on your customer's credit - not yours.
- New Businesses & Start Ups - New businesses and startups can qualify.
- Flexibility - Asset based loans can be arranged as term loans or revolving lines of credit.
Terms
Asset based loans are usually more expensive than more traditional financing but not always. In fact, companies with strong assets and credit can secure very favorable terms.
The real benefit to asset based financing is that it enables you to actually capitalize on opportunities that you would otherwise miss out on due to a bank declining your request for credit.
Uses
ABL's have historically been a tool used by larger companies or those who were having difficulty accessing capital, but that has changed and they can be an excellent alternative to SBA financing.
Asset based loans are for:
- Growing Businesses
- Businesses in need of Working Capital
- Businesses in need of Capital for an Acquisition
- Seasonal or Cyclical Businesses
- Businesses in need of Debt Restructuring
Please contact us at 1-800-414-5285 to find out if we can help you with asset based financing.
