Asset-based lending refers to business financing secured by capitalizing company assets. Here a loan taken for business can be collateralized with an asset and can be structured to work as a revolving line of credit towards company’s on-going expenses and investments as and when the need arises. It provides immediate funds to small and mid-sized companies that can be used to cover operational expenses, finance new purchase orders, or make strategic investments.
Asset-based lending has gained popularity in recent years owing to the simple and easier eligibility process. An immediate loan can be secured against their assets like Accounts Receivable, Inventory, Marketable Securities, and Property, Plant and Equipment (PP&E).
Why Asset Based Loans?
Asset Based Funding are largely used as working capital by companies to stay ahead of competition, manage their rapid growth issues and continue to maintain their position in the business. This type of loan can plug in any cash flow problem that may arise at various growing stages.
Any small and mid-sized companies that have a stable flow of business and have assets that can be financed.
- Accounts receivable must not be pledged as collateral to another lender and must be free of liens.
- If they are pledged to another lender, then the other lender must be willing to subordinate its position.
- The company must have their taxes up to date with no serious accounting or legal issues which could impede the assets.
- Business must be profitable or have a turnaround plan in place.
Asset based funding has more advantages than most available alternates.
- Working capital in hand offers liquidity for better planning and financial stability
- It offers flexibility in using lines for many purposes and to solve many of the problems
- Fastest disbursal to ensure minimum opportunity loss
- Fewer covenants than most alternatives
- Lower interest rate
We keep it Simple
Capital assets can bring you the working capital to manage the rapid growth issues and help you position yourself in a favorable position for future growth.
- Your company makes a decent profit
- A good financial control
- Maximize availability of working capital by revolving line of credit on your company asset base
- You allow us security interest in collaterals viz; equipment, inventory and accounts receivables.
- A percentage of the value of asset is made available to you as a line of credit (90% of the Accounts Receivable, 75% of Equipment, and 50% of the Inventory value)
- Additional working capital can be made available as per requirement as and when required on additional inventory or sales receivables
We make it Fast
- Approvals in 24 working hours
- Funding in just 2-5 working days
- Team of industry experts works with you
- Challenged credit is a not an issue