Lending based on your assets is a powerful way to improve your working capital situation, particularly if you are unable to apply for a conventional bank loan. There are many reasons that asset-based lending may be the right choice for your small business. Learn more about how to use this flexible financing alternative today. Determine whether asset-based loans are right for you and start your application today.
Asset-based loans use a valuable personal or business asset as collateral for a loan. Typically, these loans are short-term and completely flexible. You can use your loan to pay for any business expenses you wish, but will typically be charged a higher interest rate and be required to pay them back quicker than other funding options.
There are a range of assets that you can use to secure your loan. Real estate is one of the most common, although equipment and valuable inventory can also be used. Look for loans that can use both liquid assets and fixed assets as collateral.
Most asset-based lending options don’t require a credit check or financial history of your company. Because you sign over the rights of your assets in the event of a series of missed payments, your lender will be more willing to work with you.
This makes an asset-based loan a great way to build your credit. Use it to cover your payroll or other operating expenses, then simply pay the loan off with your income. It can be a great substitute for a cash advance if you have looming deadlines, or it can be used to take advantage of an investment opportunity that will grow your business.
Because of the short-term nature of asset-based loans, be sure you have a firm strategy in mind for repaying your loan. This is particularly important if you use personal or business real estate as collateral. Use your loan to invest in your own business growth. Look for ways to earn enough income to cover the loan amount, interest and more to grow your business.
Whether you need a small loan or a significant amount of financing, look for ways to utilize your assets through asset-based lending. By improving your working capital with a flexible, short-term loan, you can accelerate business growth and take on large clients successfully. With the right strategy and competitive asset-based loan, you can outpace the competition and leverage your assets to greater levels of business success.