Asset Based Lending
Access Funds trapped in capitalized equipment, buildings and property to put your money to work for you.
Is your balance sheet asset heavy? Assets tie up cash, but there are a number of ways assets can become cash to provide working capital or added purchasing power. Term loans, lines of credit, factoring, merchant cash advance and ACH financing are all forms of asset based funding to give your business the upper hand.
How it works:
You’ll receive cash up front and for the duration of the loan, you’ll have a lien on the asset. Our network of lenders provides a full range of asset based loans depending upon your industry, volume of business and the types of assets held. If you have purchased items on credit, you may be eligible for asset based loans even before paying off the asset in full. Speak with a broker and we will help you assess your options.
Following are some of the asset types our clients have used to access cash.
Inventory
Raw goods, finished goods and inventory ready to sell are all asset classes your business may can utilize when seeking funds. Because the goods are at the heart of your business, they are becoming a go-to asset for a quick cash infusion.
When you borrow against inventory, the asset is valued based on its resale, not the purchase price your business paid. This opens up larger cash amounts, but you are borrowing against future sales, so a balanced approach is helpful in this category. Some businesses leverage inventory during slow seasons to meet payroll and other operating expenses that are repaid during holiday shopping or other high peak seasons.
Commercial Real Estate
Properties carry some of the highest asset classes for many businesses. Owning property comes with many significant advantages. One disadvantage is the amount of value tied up in the property itself. By leveraging property for a line of credit or term loan you free up that value to apply to other value-generating activities within your business. Apply the funds to purchase further property, operational costs, payroll, and raw goods among others.
If you own an existing building and wish to purchase additional properties, bridge loans give you the opportunity to leverage your current building to purchase a new property. Pay interest only for up to one year while you sell your previous building or secure new permanent financing.
For owner/operators utilizing at least 51% of a property for your own operations, you may be eligible for Small Business Administration funding to purchase real-estate. By leasing a portion of your property, renters help pay for the building’s mortgage and upkeep.
Commercial Real Estate
Properties carry some of the highest asset classes for many businesses. Owning property comes with many significant advantages. One disadvantage is the amount of value tied up in the property itself. By leveraging property for a line of credit or term loan you free up that value to apply to other value-generating activities within your business. Apply the funds to purchase further property, operational costs, payroll, and raw goods among others.
If you own an existing building and wish to purchase additional properties, bridge loans give you the opportunity to leverage your current building to purchase a new property. Pay interest only for up to one year while you sell your previous building or secure new permanent financing.
For owner/operators utilizing at least 51% of a property for your own operations, you may be eligible for Small Business Administration funding to purchase real-estate. By leasing a portion of your property, renters help pay for the building’s mortgage and upkeep.
Accounts Receivable
Does your balance sheet seem to carry a perpetually high number in accounts receivable? Many manufacturers or distributors offer favorable terms up to or greater than 90 days to help reduce the barrier to purchase for small retailers strapped of cash. It is a sound strategy to accelerate product turnover, but what about cash? If cash velocity falls, it impinges your ability to spend on value-creating activities.
A factoring firm can help you balance product velocity and cash velocity to increase your product turnover ratio. You’ll receive a lump-sum payment for a portion of the value, up to 80%, immediately. After your client pays in full, the factor will keep their fee and pay you the balance. It’s important to understand a factoring firm is not a collection agency. The client pays with the same terms, procedures and timeline they would pay you, without any pressure tactics from the factor.
Equipment
Purchasing equipment is a whole lot easier with equipment specific funding. The asset you purchase will stand as the collateral for the loan. As you pay, you’ll gain equity in the property.
If you own equipment outright, leverage it for available cash. With one option, a lease buyback, you sell the equipment to a leasing agency, but retain the equipment. You pay low monthly lease rates, but retain access to the equipment. If the equipment breaks down, the leasing company repairs or maintains the equipment. A common practice is to use a lease buyback to upgrade to the latest technology while continuing to use the equipment you use every day. Reduce downtime and maintain operations with this constructive funding option.
Hard Money
Are you looking for short-term financing to help close a deal or to fulfill a contract? Hard money loans leverage existing assets and are interest only for the duration of the loan. Once your business deal is closed and complete, you’ll pay off the balance and move on with regular business. This is an excellent option for businesses that get a deal larger than their regular buying power. Rather than declining because it’s not in your wheelhouse, hard money gives you the opportunity to complete the deals that move your business to the next level.
There are a few categories where hard money applies: large purchase orders and purchase of new property when you own your existing property. Because hard money loans are often closed through private lenders, they can be closed quickly. When you don’t have time to wait for banks or the SBA, and you have a deal that needs to move quickly, hard money may be the asset-based funding option that is right for you.
Hard Money
Are you looking for short-term financing to help close a deal or to fulfill a contract? Hard money loans leverage existing assets and are interest only for the duration of the loan. Once your business deal is closed and complete, you’ll pay off the balance and move on with regular business. This is an excellent option for businesses that get a deal larger than their regular buying power. Rather than declining because it’s not in your wheelhouse, hard money gives you the opportunity to complete the deals that move your business to the next level.
There are a few categories where hard money applies: large purchase orders and purchase of new property when you own your existing property. Because hard money loans are often closed through private lenders, they can be closed quickly. When you don’t have time to wait for banks or the SBA, and you have a deal that needs to move quickly, hard money may be the asset-based funding option that is right for you.
Schedule a Consultation
With lenders ready to work with you and with loan amounts from $5,000 to $5 million +, there's no reason not to start a conversation or to pre-apply to see for what loans you could qualify. We work with businesses in every industry and at every stage in the life of your business.
