Assest Based Lending

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Asset Based Lending

Asset-Based Financing

Asset-based financing is a way for rapidly growing, cash-strapped companies to meet their short-term cash needs. In general, companies can tap their assets to generate cash flow through asset-based loans or through factoring.

Asset-Based Loans

Asset based lending or asset based financing refers to loans secured by a wide variety of assets. Businesses can obtain asset based lending by using the

liquid, current assets of the company (such as accounts receivable and/or inventory) or the fixed assets of a business (such as plant, property, and equipment) as collateral.

Asset based financing relies on the value of the underlying collateral to minimize the loan's credit risk. Asset based loans also can include equipment loans and real estate mortgages. Commercial finance is the term most commonly affiliated with the industry group of asset based lenders that provides all types of asset based loans to business and commercial borrowers. Asset based lenders are sometimes referred to as secured lenders.

Advantages

The main advantage of asset-based financing is that small companies can usually get more cash more quickly than they could from a traditional bank loan. Also, asset-based lenders and factors offer an array of services including accounts receivable processing, collections and invoicing.

Asset Based Financing:

is non-bank lending
does not restrict growth
encourages capital equipment purchases
is more flexible, providing higher advances against collateral
does not require additional security, such as compensating balances, personal assets, or warrants against subsidiary stock
is nationwide with no geographical limitations
can provide unlimited International service

Lending Uses Include:

Working Capital
Reorganizations and Debt Restructures
Mergers and Acquisitions
Capital Equipment Purchases
Rapid Growth Funding
Seasonal Cash Shortfalls
Turnarounds
Debtor-in-Possession Loans

For more information contact:

Ray King <> The ProCoach
Phone: 832-615-9124 * Fax: 832-615-9570
Email: Ray@TheProCoach.com