Asset Based Loans
Asset based business loans provide financing secured by company assets like accounts receivable, inventory, equipment, real estate, or even future credit card sales. With assets securing the loan, approval depends less on personal credit scores.
Loan amounts are based on percentages of the asset value. Terms are usually shorter than conventional bank loans. Asset based lenders can fund companies that banks consider too risky. Interest rates tend to be higher than secured loans.
By tapping into existing assets, companies can access capital for growth, manage cash flow, consolidate debt, and more without diluting business ownership.
To learn more about how an asset based loan can help your business today, complete our 15-Second Online Application here to speak with a business financing advisor.
Tips for Utilizing Asset Based Loans
Asset based loans work for established businesses with assets not fully utilized, but avoid over-leveraging. Research lenders with expertise in your specific asset type to structure optimal terms.
For maximum capital access, provide personal guarantees and allow liens on all business assets. Start with essential assets to preserve others for future financing needs if possible.
Use loan funds for activities focused on increasing profits and asset values. This ensures ability to repay the loan and sustains borrowing capacity for additional capital.
Benefits of Asset Based Loans
Key benefits include gaining capital without giving up business equity or requiring upfront cash. Payments can be structured around projected cash flow. Approval decisions are faster than traditional bank loans.
With the right assets, companies can secure larger loan amounts than possible through unsecured options like credit lines. Interest rates may decrease over time as the loan is repaid successfully.
Asset based loans demonstrate to future potential investors that the business has valuable underlying assets that could be sold or refinanced if ever necessary.
Asset Based Loan Requirements
- At least 3 months in business
- Assets to secure loan worth at minimum 125% of desired loan amount
- No minimum FICO
- $5,000+ gross monthly revenue
- Liens placed on business assets
- Documentation validating asset values
- Potential for personal guarantee from owners
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