Asset based finance is a specialized method of providing structured working capital and term loans that are secured by accounts receivable, inventory, machinery, equipment, and/or real estate. Asset based financing is a good way for quickly growing businesses to obtain capital to meet their needs of short-term cash. With asset based loans, companies can use their own assets to generate cash flow. This is an alternative to equity funding where part of the ownership in the company must be given up. When a business pledges their assets to a finance company to get a loan, they still own those assets. If the business does not make their payments then the assets can easily be seized by the lending company.
Why use asset based financing for funding?
- Able to unlock vast sums of cash that have been invested in the business infrastructure
- Able to take advantage of sales growth immediately
- Access a revolving credit line secured by inventory, including raw materials and finished goods
- Term loans are available against your commercial real estate and equipment without sacrificing ownership
- Maintain a greater level of flexibility than traditional bank financing
This type of funding is perfect for: Startup companies; Refinancing existing loans; Turnaround loans; Financing growth; Acquisitions and mergers; Management buy-outs & buy-ins. Basically any company with sub-par credit would benefit from asset based finance. Let us help you find sources of asset based financing for you business.