Asset-Based Lending 

Asset-Based Lending is a form of revolving credit collateralized by a business's assets.  Those assets may include accounts receivable, inventory, machinery and equipment, and real estate.  The amount of credit available to the business is based on a percentage of its assets.  As the business's current assets are sold in the normal course of business, the proceeds go to repay the credit line. 

What it is - Background and Fundamentals 

Many companies in need of capital utilize a system of secured asset financing to develop cash flow.  This capital is typically used for the expansion and construction of facilities, new equipment or machinery purchases, rehabilitation, or modernization of an existing facility.  The sale of tangible resources such as products is used to repay the credit line. 

Assets include the simple from extending an advance on the worth of a company's accounts receivable paper.  They also encompass complex assets that include raw materials such as precious metal inventories, operating machinery and equipment, inventories, and sometimes real property.  These secured loan deals are Asset-Based Financing.  The larger the Asset-Based Financing deal, the greater the amount of paperwork is needed.  However, in all Asset-Based Lending deals the quality of the collateral becomes preeminent in determining the credit worthiness of the client. 

Asset-Based Financing is not a new concept.  Some of the largest companies in the world employ various forms of Asset-Based Financing as integral parts of their financial structure.  An Asset-Based Project usually groups all of the assets and structures the financing according to the worth of the assets.  The financing is considered a "floating lien" as defined by the Uniform Commercial Code (UCC).  Today, with the aggressive competition for clients, Asset-Based lenders are becoming very creative lenders in direct competition with traditional banks and offer the same level of interest with few to no covenants.  Asset-based lenders are "airballing" some of their transactions, today.  In other words, they are lending beyond the worth of the assets.

Let us help your company grow and prosper by using Asset-Based Lending. Remember, "Cash is King"!