Asset-based lending and financial services provide businesses with a variety of options to meet their short-term cash needs. This may include receivables factoring, but it also brings about valuation of current assets, inventory and capital. Asset-based lending is becoming a popular option for businesses who need to maintain cash and finance its day-to-day business.
October 14 2017
Ensuring financing for a growing business can be a daunting task, but it is good to know what options one has available, especially in each competitive industry. Positive cash flow should be the goal of any company. With asset based lending, companies can find lending to help them out of a rut or to expand.
By prioritizing investment and improving their day-to-day operations, a company can deliver immediate improvement when it comes to cash flow. But there are cases when operation management is not enough to improve the economic position of a company.
Every company needs support at some point
Often, entrepreneurs feel the need to find asset based lending to support the stability of their company. But, many believe there is no other option available - other than going to a bank. Even if obtaining a commercial loan is a possibility, it should be strategically assessed first, and other options should be sought out before a business moves forward.
Asset-based lending and financial services provide businesses with a variety of options to meet their short-term cash needs. This may include receivables factoring, but it also brings about valuation of current assets, inventory and capital. Asset-based lending is becoming a popular option for businesses who need to maintain cash and finance its day-to-day business.
Asset-backed lending can also help redistribute business resources more effectively. Companies that can create positive cash flow on a regular basis are maximizing their credit availability and profitability.
How does asset-backed funding work?
Asset-dependent credit products work for companies who need immediate cash. It is also ideal for companies with less-than-ideal credit ratings. With an asset-based credit program, a business will settle its assets to secure a loan from a bank. Contact Equify for more details.
It is still important to note that there are risks involved with this type of financial product. Since the company is responsible for the use of its own assets as collateral, the lending party has the right to seize these assets when the loan is unpaid. Other forms of collateral may include machinery and equipment, real estate, and certain intangible assets.
Getting the right loan
Any company that has limited inventory can choose what type of capital they need. Both options are considered asset-backed lending, and both applications will be judged according to their own merits. Once an effective strategy has been outlined, the company can determine what funds are needed.
A company that can turn to other assets does not mean they do not have enough inventory or accounts receivable bills to profit. Asset-based lending can help to improve a company’s loan-to-value ratio, however, businesses should remember that their loan amount will vary for each inventory that has been assigned to it. Visit http://equifyllc.com/ for more details.
