Asset-Based Financing
View PDF | Print View
by: capital
Total views: 42
Word Count: 323
Fast-growing companies that need money and have assets, such as property or inventory, can take advantage of asset-based financing to instantly meet their short-term cash needs. With the asset-based financing method, the company's assets are used to secure the loan from a bank or a commercial finance company, which then seizes the assets if the borrower defaults on the loan. Some companies use business property while others use their inventories or accounts receivables. If an inventory is used as the asset, the lender may require the borrower to use an approved warehouse where inventories can be stored and monitored by the lender. Akin to the "equity loan" concept that has become so common today, asset-based financing is becoming the rave for businesses, especially if their credit is less than perfect.
Asset based financing follows the general guidelines used in most secured, conventional loans. However, the interest and fees associated with the loans are typically higher than traditional bank loans. In recent years an increase in the number of asset-based financing companies has caused the overall rates to fall, which makes them even more desirable.
Advantages of Asset-Based Financing
From a business perspective, the main advantages of the asset-based financing method is the speed at which large amounts of cash can be obtained, and the fact that almost any asset owned by the company will suffice as collateral. Those with less than perfect credit also benefit from not having their credit worthiness based solely on their credit history.
About the Author
"Do you need a loan fast? Have you ever thought about selling your invoices that your waiting to be paid on. Capitalplus.com will buy commercial invoices and take the collection of the invoice payment out of your hands. Try Capitalplus.com Invoice Factoring Services and worry less. You should try Capitalplus.com is a leading Invoice Factoring company in the United States. If you need cash now and cant wait for your invoices to be paid we can help you. We get our clients cash in as little as 48 hours. Keep your business flowing smoothly and worry less about waiting for your invoices Do you have a large construction contract you need money for now? We can help you grow your business. Contact us today about our construction construction factoring services. We will factor most any commercial project. Factoring invoices is simple and fast way to get your business cash when you need it most. Sell your unpaid invoices to Capitalplus.com today. We buy invoices today, and you worry less about slow paying customers."
Rating: Not yet rated