Using Asset Based Lending Instead of Traditional Loans
Asset based lending is quickly becoming a popular alternative to traditional loans for businesses looking to access capital. Asset based lenders can offer benefits that banks and other financial institutions are unable to, such as faster turnaround times on loan decisions and more flexibility in terms of repayment plans. This type of financing also offers an opportunity for business owners with bad credit or limited collateral to get the funds they need without having to worry about their credit score.
What Is Asset Based Lending?
Asset based lending is a type of financing that allows businesses to borrow against the value of their assets. Assets could include inventory, accounts receivable, equipment, and other physical or intangible items that a business owns. The lender will assess the value of the asset and then provide a loan based on a percentage of that value. This means that businesses can access more capital than they could with a traditional loan, as the lender is not looking solely at creditworthiness or collateral.
Types of Asset Based Lending
Asset based lending covers a wide range of assets and can be tailored to meet the specific needs of each business. Common types of asset based loans include inventory financing, accounts receivable financing, equipment financing, and purchase order financing. Each type of loan is tailored to meet the specific needs of the business, allowing for more flexibility in terms of repayment plans and rates.
How to Use Asset Based Lending
Asset based lending can be a great option for businesses that need quick access to capital or have difficulty obtaining traditional loans due to their credit score or lack of collateral. By borrowing against the value of their assets, businesses can access the capital they need without having to worry about their credit score or collateral. Additionally, asset-based lenders often have quicker turnaround times and more flexible repayment plans than traditional lenders.
Overall, asset based lending is a great alternative to traditional loans for businesses looking to access capital quickly and easily. With more flexible repayment plans and faster turnaround times, asset-based loans can offer business owners an opportunity to get the funds they need without worrying about their credit score or collateral.
