Are you a small business owner looking for financing options? Traditional bank loans can be difficult to get, especially if you have bad credit or lack the necessary collateral. Fortunately, there is an alternative—asset-based lending. Asset-based lending provides businesses with access to capital while allowing them more flexibility than traditional loans.
What Is Asset-Based Lending?
Asset-based lending is a form of financing that relies on the value of a company’s assets as collateral. This type of loan can be used to finance a variety of needs, including starting up a business or expanding operations. It offers businesses more flexibility than traditional bank loans because it focuses on the value of the assets rather than creditworthiness.
Easy to Obtain
One advantage of asset-based lending is that it is easier to get approved for compared to traditional bank loans. As mentioned before, banks typically require good credit and collateral, which many small businesses don’t have access to. With asset-based lending, all you need is an inventory or other assets with sufficient value—you don’t have to worry about your personal credit score or lack of collateral.
More Capital then Institutional Loans
Another advantage is that asset-based loans can provide businesses with more capital than traditional bank loans. Because the loan is secured by assets, lenders are willing to offer larger amounts of money than they would for an unsecured loan. This can be especially useful for small businesses that need extra funds to grow their business but may not qualify for a traditional bank loan.
Finally, asset-based lending offers flexible repayment options. Unlike traditional bank loans, which require regular monthly payments over a fixed period of time, asset-based loans allow you to pay back the loan amount in installments or on an as-needed basis based on your cash flow. This makes it easier for small businesses to manage their finances without worrying about meeting strict repayment deadlines.
Getting Approved for Asset-Based Lending
To increase your chances of getting approved for an asset-based loan, make sure you have a detailed business plan that outlines how the money will be used and why it is needed. Additionally, provide the lender with accurate information about your assets—including inventory count, estimated value, and past performance data—so they can evaluate your application objectively. Finally, be prepared to pay fees associated with this type of loan; these may include appraisal costs or other setup fees.
In conclusion, asset-based lending provides small businesses with access to capital while offering more flexibility than traditional bank loans. By understanding how asset-based lending works and taking steps to increase their chances of approval, business owners can take advantage of this unique financing option to get the funding they need. Contact Artis Commercial Capital today to learn more about our asset-based lending solutions.