Asset-based lending is a business loan secured by an asset. The asset-based loan, or line of credit, is secured by inventory, accounts receivable, equipment and/or other balance-sheet assets. This means if the business loan is not paid back, the asset is taken, making it less of a credit risk for the lender.
Asset Based Lending Can Maximize Capital
Factor Finders partners with businesses to convert invoices and inventory into working capital. This method of asset-based lending creates collateral and allows business owners to borrow the money necessary to grow their company.
Borrowing decisions depend primarily on a company’s assets rather than strict loan criteria such as debt-to-income ratios and cash flow projections. Factor Finders’ asset-based financing service links our customers to sources of cash.
Asset Based Financing Provides Higher Advance Rates
Factor Finders uses our specific industry expertise in asset-based lending to leverage the highest available advance rates. Our services outmatch traditional lenders:
Banks prefer tangible assets and offer low advance rates on inventory and receivables.
Receivable valuation outmatches the rates of these traditional lending institutions.
We make agreements with banks that already own a client’s receivables and acquire the ownership rights to these accounts.
Asset Based Lending Generates Consistent Cast Flow
Manufacturers, distributors, and service companies with outstanding receivables should consider asset-based loans. Our service helps businesses thrive during slow business cycles and fill major orders with minimal requirements.
Qualifying for Asset Based Lending
Businesses should meet the following requirements:
- Minimum sales volume of $500,000
- A leveraged balance sheet
- A need for consistent cash flow