We are a Full-Service Business Financing Firm with Consultants
that Specializes in Asset Based Lending
What is Asset Based Lending?
Asset-based lending is a set of business financing products funded by lenders to Company’s that is secured by assets of the business as collateral. These products can be funded as either an Asset-Based Loan or Asset Based Line of Credit both of which may be secured by inventory, accounts receivable, equipment, or other property owned by the Business.
Companies of all sizes from Small Businesses to Large Scale Corps that are stable and that have physical assets of value are the most common to utilize Asset-Based Lending.
Small and Midsize Business typically take on these products as a means to obtain bigger and longer terms for the funding they take on. Debt Financing underwriting is typically line based financing meaning the past up of the company up until that day will be the sole basis for the financing offer. Asset Based Lending products allow companies to hedge of items like their receivables which can look forward beyond Line-Based underwriting. Large Corporations also take on Asset-Based Lending products to cover their short-term capital needs for a myriad of reasons. Urgency can be one of the major reasons sometimes the demand for capital may be extremely time-sensitive, utilizing Asset Based Lending can provide a quicker route to capital. For public companies it could be to avoid diluting their shares or avoiding the cost and long lead time of issuing additional shares or bonds.
Asset Based Lending occurs when funding is mainly based on the value of the assets being pledged as collateral. The terms and conditions of an asset-based lending depend on the type and value of assets offered as security to the lender.
Lenders usually prefer highly liquid collateral that can readily be converted to cash in situations where the company defaults on its payments. In general, the more liquid the pledged asset, the higher the loan-to-value ratio. In addition, lending that is granted under Asset-Based Financing never utilizes the full value of the assets pledged.
Interest rates on these products are less than interest rates on the average unsecured loan or line of credit because if the borrower defaults, the lender can seize assets and sell them to recoup its lending costs
Asset-based lending is often used by small to mid-sized businesses in order to cover short-term cash flow demands.
When a company cannot show that it can pay for a loan through its cash flows or receivables, the lender may decide to approve the loan based on the value of the entity’s assets.
Business could be awarded better financing terms by providing the lender with additional security by pledging collateral to obtain Asset Based Financing.
What are the Asset Based Lending Products we focus on?
Real Estate Fix
Standard Interest Rates or Cost
Prime Plus or Libor Plus
Typical Underwriting TimeLine
3-5 Business days
Available Capital Limit
Up to $350k per Entity.
Average Term Limits
In Closing, When it comes to Business Financing usually want the most amount of money, for the longest term, at the lowest possible interest rate. Unfortunately most companies do not get to see that dream realized as is. When it comes down to Asset Based Financing products they may be the programs that allow companies seeking financing the closest realization of all of those goals. Whether the use is for additional financing, longer terms, or a lower interest rate to save on the cost of capital. Adding an Asset to secure the Lending has been shown to really move the needle and make a difference.
Troy Business Group has a team of seasoned Business Financing Consultants that specialize in providing clients with access to all of the fantastic Asset Based Lending products on the market. Please apply online, email us for an appointment, or call us today. Our team is committed to helping your business grow with Asset Based Lending of any sort and will guide you through the loan process each step of the way.