The Most Important Benefits of Asset Based Lending

The Most Important Benefits of Asset Based Lending

Many small and medium-sized companies experience difficulties with cash flow, often because of unexpected rapid growth. These problems can be mitigated by asset-based lending, which is financing secured by collateral such as accounts receivable, equipment, inventory, and various other business assets. Here are some of the benefits of this funding method.

Qualify Easily

Traditional lines of credit and loans are difficult to obtain. However, your company can qualify for asset-based lending as long as it is profitable, manages its finances well, and has suitable assets for use as collateral. Accounts receivable work well even if your business is still establishing its credit history because lenders are more concerned with the creditworthiness of your clients.

Obtain Funding Quickly

If you have assets that financing companies approve of, you can get an asset-based loan reasonably quickly. The process of underwriting will probably take no more than a few weeks assuming you meet the qualification criteria.

Improve Cash Flow

Asset-based lending provides immediate relief to businesses that have been struggling financially. It strengthens your cash flow and gives you the stability to effectively run your operation and grow your company.

Maintain Flexibility

The flexibility of asset-based lending is another of its distinct advantages. Provided you utilize the funds for business purposes, there are not many restrictions on what you can use the funding for. As your company grows and the value of your accounts receivable increases, your financing can increase as well without having to redo the process of underwriting.

Move On to Other Funding Alternatives

Once your company reaches a certain stage of growth through asset-based lending, you will be better able to qualify for other less costly funding alternatives. This will allow your business to grow even further.

For more advice on asset-based lending and other financing possibilities, get in touch with Champagne Global Capital Lending.