Benefits of Asset-Based Loans
Getting good financing is essential to operate and grow a business. Asset-based loans can be an excellent financing solution for your business’s needs.
What are Asset-Based Loans?
Asset-based loans are simply loans that are secured by business assets as collateral. Many asset-based loans can be structured to function like revolving lines of credit. Therefore, funds can be used, paid back, and replenished to cover continuing expenses.
Who Can Qualify for Asset-Based Loans?
Generally, small to mid-sized companies that have adequate assets that can be financed and are stable financially can qualify. These loans are typically used by fast-growing companies in need of working capital. The borrowing company cannot have any serious tax, legal, or accounting issues affecting the assets. Assets pledged as collateral can include inventory, equipment, and accounts receivable. Service companies, manufacturers, and distributors typically use these loans.
Advantages of Asset-Based Loans
Asset-based loans have become increasingly popular because they offer the advantages of improved liquidity that improves cash flow. These loans are typically easier to get compared to traditional loans and lines of credit. Since the loan is based on the value of a company’s assets. They are flexible and can be used for any business purpose. Firstly, they can be obtained more quickly compared to conventional loans. Secondly, asset-based loans have fewer covenants compared to traditional lines of credit which makes loan management simpler. Lastly, they can be used as stepping-stones to other types of financing. Plus, they offer lower costs compared to many other financing solutions.
How to Get Asset Based Loans
First, find a lender that offers asset-based loans. Lenders include banks and many financing specialists. Second, identify adequate assets to be used as collateral. Third, provide evidence of good accounting systems and healthy financial statements.
Seek Expert Financing Assistance
Contact Toluca Lake Capital for exceptional financing solutions. We offer a large portfolio of business loans to meet your needs so you can grow your business and achieve business success.