Don’t Forget These Important Benefits of Asset-Based Lending
Every business needs capital to operate, thrive, and grow. There are many financing options available. However, one that shouldn’t be overlooked is asset-based lending. Asset-based lending is simply business lending that is based on the value of the assets of a business. Each loan is secured or collateralized with the assets themselves.
Who Can Access and Use Asset-Based Lending?
Businesses that can access asset-based lending are those that have assets like sizeable inventory, valuable equipment, or large accounts receivable. Depending on the funds needed, one asset can be used as collateral, or several assets could be combined. Companies that use asset-based lending typically are small and mid-size companies that have a solid asset base. They may have a cash flow emergency or be facing rapid growth challenges. The company must be financially stable and can’t have pledged its assets to another lender, or any troublesome encumbrances.
What Are the Benefits of Asset-Based Lending?
The benefits of asset-based lending include:
Companies that qualify can get funding quickly because the application and underwriting process is faster than other types of financing.
It puts the value of assets to good use.
There are typically few restrictions on the use of the funding. Except that funds provided must be used for business purposes.
Funding is easier to get compared to other funding sources because the business primarily needs valuable assets, a solid financial track record, and good financial controls.
This type of lending can be used as a stepping stone to obtaining other long-term lending products.
It offers funding at a lower cost compared to many other types of lending.
How to Apply for Asset-Based Lending
First, you would need to pledge assets as collateral.
Second, you would need to provide documentation including detailed business information, a business plan, personal credit history, financial statements, and tax returns.
Seek Experienced Financial Assistance
Contact TCF Capital for a wide range of financing solutions. Tailored to your needs and to meet your financing and growth requirements.