Asset Based Lending (ABL) Can Help Maximize Your Business's Borrowing Capacity
Has your business outgrown its working capital? Has your company’s cash flow shortage got you feeling stressed? Asset based lending gives companies on the fast track to success the ability to maintain their momentum. With an asset based lending (ABL), you can borrow against your business’s financial assets to cover cash flow needs. Our asset based lending facilities typically range from $200K up to $50MM+. However, we will make exceptions depending on the circumstances. If your business requires an asset based loan which is less than $200K, then please visit our Business Loan Types webpage to learn about the other types of business funding we are able to easily provide you with.
Call 704-904-0774 Today to Learn How You Can Grow and Expand Your Business with an Asset Based Loan (ABL)!
Maintain Your Growth Momentum with Asset Based Lending and Gain Instant Access to Working Capital
Growing your business is a great thing, especially if your business’s growth has taken off at a rate that zooms beyond your initial goals and expectations. When this happens, slowing down your business growth to allow your working capital the opportunity to catch up is simply not an option. This could cause your business to face consequences that might affect its future success. You could potentially lose ground that you’ve already worked so hard to gain.
In this circumstance, you can easily apply for collateral loans that rely on your business’s financial assets. Asset based loans provide a feasible avenue for funding so your business can continue its race to the top without breaking pace. If your company’s cash flow dries up, without additional funds, your amazing growth rate could begin losing momentum fast.
Asset Based Lending Helps Growing Businesses
If your business has experienced an extraordinary amount of growth recently, there’s no need to let a lack of working capital derail your path to success. We understand that it requires steady access to cash flow for companies like yours to be able to continue the trajectory that’s allowed you to come this far, this fast. Our asset based lenders offer a solution for businesses that are poised for great things.
Asset based lending provides companies rich in financial assets with a unique opportunity to borrow against these assets. They can access additional funds whenever their company’s cash flow could use an additional boost. Since you’re borrowing against financial assets your company has already gained, the chances of you borrowing more than your business’s worth are substantially reduced. So, you get added peace of mind while accessing the funds necessary to achieve your business’s maximum potential.
The Benefits of Using Asset Based Loans
Additional Benefits of Funding With Asset Based Lenders
An additional benefit (that's huge for borrowers) is that asset based lenders provide their clients with customized solutions. This means every client is being offered the best ABL facility, terms, and conditions for their business's unique circumstances.
This supplies the borrower with the added reassurance that they are getting the best asset based loan for their needs and budget.
Call 704-904-0774 to Learn About Asset Based Loans and the Benefits of Using Asset Based Lenders
With asset based loans, your business will gain access to a wide range of benefits, including:
- Improved Borrowing Power: With an asset based loan, you have control over your borrowing power in a way that other types of loans don’t allow. So, you’re able to maximize your borrowing power to its fullest potential.
- Increased Efficiency in Accounting & Faster Production Rates: Enhancing discipline and efficiency around accounts receivable and production for more borrowing capacity.
- Reduced Financial Covenants & Restrictions: Reducing financial covenants, including restrictions around the level of debt-to-business value or cash flow, and net-worth-focused covenants.
- Built-in Collateral Protection: There is the additional benefit of potentially gaining more time to address financial difficulties due to built-in collateral protection.
- Future Funding Opportunities Provide Growth Incentives: The understanding that your future funding opportunities are contingent on your ability to provide financial assets as collateral is an added incentive to grow your business.
- Lower Interest Rates Than Many Other Types of Loans: Asset based loans are secured loans that are backed by collateral. This means the lender has the security of recouping all or most of the loan’s value should the borrower default. For this reason, the interest rates offered by asset based lenders tend to be much lower than other types of unsecured loans.
How Do Asset Based Loans Work?
If you’ve been putting off getting the funds your business needs because you’re worried the asset based loan process will be lengthy and time-consuming, we’ve got good news. Applying for a loan with our network of asset based lenders is probably much simpler than you imagine. The initial application can be completed online in about ninety seconds. From there, it could be just a matter of hours before you’re connected with a lender and your funds are well on their way.
When you apply for a term loan, you receive a specific amount of funding, which might be more than you need at the time. Term loans typically accrue interest based on the amount of your outstanding loan balance until the entire balance is paid in full. However, asset based financing is generally structured as a line of credit for your business. Unlike a term loan, you only receive funds that you need. So, you don’t rack up unnecessary interest on funds that you don’t need. Whenever you need additional funds, it’s easy to use asset based lending to get as much working capital as you need, as long as you have the assets available to secure funds.
How to Apply for an ABL Loan
The entire asset based lending application process consists of just 4 simple steps:
- Fill out our free 90-second online application and click submit.
- Thanks to a combination of experience and advances in modern technology, we’re able to connect you to the best asset based lenders without wasting your time or energy.
- Up to five asset based lenders will contact you, competing for your business. This puts you in the driver’s seat, so you feel free to choose the best ABL facility for your business without compromise.
- Once you have agreed on the terms of your asset based loan with your chosen asset based lender, funding could start as soon as the next business day.
It’s just that easy.
Discover More About How Our ABL Financing Works When You Apply for Any of the Asset Based Loans, We Offer Through Your FundingTree!
Who Should Apply for Asset Based Lending?
Asset based loans that solely rely on a company’s financial assets don’t require borrowers to show their ability to pay a loan’s balance or sometimes be able to sustain loan payments. Instead, all that is required is that the business has financial assets whose worth substantiates the loan’s amount. This can be a relief to applicants who have had trouble securing traditional business financing. Unlike many types of business funding, asset based loans don’t focus as much on your past history, credit score, or creditworthiness. So, even if you’ve been denied by other lenders, it doesn’t mean that our network of lenders won’t be able to offer you a loan agreement.
Because asset based lending depends on the weight of your financial assets, it can often result in better opportunities for funding than traditional loans.
It’s also possible for small businesses to obtain financing, provided they have the assets to secure a loan. Even without an established credit history or credit score, a company that’s experienced early success may have already accumulated a substantial amount of assets. And they may need to tap into their borrowing power in order to continue growing at their current rate. Asset-based lending provides the perfect solution.
ABL Financing With Asset Based Lenders
Companies that need to be able to access capital on a revolving basis are also good candidates for asset based loans. The loan can be structured as a revolving line of credit for your business. You can leverage borrowing power as needed, rather than in one lump sum. For example, once you have established an account with an asset based lender, you can cash in on additional accounts receivable or inventory whenever you need to boost cash flow.
In Addition to Asset Based Lending, Your FundingTree Provides Business Services Which Help Business Owners Manage and Protect Their Business and Their Employees! Call 704-904-0774 Today to Learn More About Asset Based Loans.
Asset-rich businesses often find that asset based loans are the quickest, easiest way to receive funding whenever they need it. And they’re able to access funds without incurring additional company debt. Even if a company has other options available, they might prefer asset based lending because they don’t want to rack up unnecessary debt or cut into their available credit. If there are plenty of assets that are available, some companies would rather maintain a low debt ratio. They choose to forgo traditional credit in lieu of funding that’s secured by company resources at hand. Companies who are planning to use their credit to secure funding for a specific purpose or purchase in the near future might also rather depend on their assets to secure a loan.
Types of Collateral for Asset Based Lending
Asset based lending involves signing a loan agreement that gives the details about the terms of the arrangement. Collateral loans are contingent on the borrower’s assets. A mortgage is one type of collateral loan. However, the asset based lending industry caters to businesses rather than consumers. With an asset based loan, the borrower provides financial assets as collateral to secure the loan. There are four types of assets that you can typically offer as collateral for asset based loans. These include the following:
Accounts Receivable is What Asset Based Lenders Prefer to Use as Collateral
This is one of the most popular types of collateral you can use to secure asset based loans. Lenders tend to prefer accounts receivable because they are one of the only types of collateral that renew at periodic intervals throughout the year. When a business chooses to use accounts receivable for their collateral, they simply turn over their unpaid invoices to the lender. Should the borrower default, the lender can then collect and keep the unpaid balance of the invoices.
Inventory to Secure an Asset Backed Loan
Inventory is another popular type of collateral you can use to secure asset based loans. Because it, too, tends to renew periodically throughout the year. The borrower offers their property, goods, or the contents of a building as collateral for their loan. In the event that the loan defaults, the lender can take possession of the inventory which is listed as collateral for the loan.
Manufacturing Machinery & Business Equipment Can Be Used for ABL Financing
Manufacturing machinery and business equipment is a suitable option for companies that are unable to secure a loan with unpaid invoices or inventory. Industrial companies might prefer this as their collateral.
Trademarks and Customer Lists Can Sometimes Be Used By Asset Based Lending Companies
Sometimes, a company might be able to offer a trademark or customer leads as collateral. They can be used for securing an asset based loan if these items are of substantial value.
When you apply for an asset based loan, the information you provide is instantly sent to a network of lenders who compete for your business. This gives you more options than if you worked with just one individual lender. And, since our network of lenders compete with one another, there is a greater incentive for them to offer you the best terms possible.
With asset based lending, you can receive the working capital to fund your business in a matter of days. The application process begins with you filling out our free online 90-second application. Don’t sacrifice your business’s potential success. An asset based loan can provide you with the funding you need to grow your business into greatness. Get the cash flow you need when you need it with an asset based loan from Your FundingTree!