Asset financing is typically structured as a line of credit secured by a specific asset or across a combination of existing assets. Usually this includes: accounts receivables, finished goods inventory, real estate, and/or equipment. With asset financing, a company uses its assets as collateral to obtain capital. The financing institution does not own the companies’ assets, but the assets can be seized if the business does not make its required payments on the loan. Besides working capital, asset financing can be used for many other purposes.
Asset based loans are perfect for:
Company acquisitions and business mergers
Management buy outs
Financing expansion
Turnaround finance
Refinancing existing business loans
Why consider asset based financing for capital?
Able to leverage sales growth today
The lack of flexibility through regular bank financing is no longer an issue
Revolving credit lines can be secured by your raw materials and finished goods inventory
Access large amounts of cash that have already been invested in the infrastructure
