6 Reasons to Use Asset Based Lending

Asset based loans are great for companies that are willing to put their assets up as security in order to bring in more capital. In order for small businesses to flourish, a steady stream of cash flow needs to be coming in, and asset based lending helps achieve that. The money you get can go toward investments or to cover basic expenses to keep your business running smoothly. This financing has grown more popular in recent years, and there are several reasons why you should consider it for your company.

1. More Flexibility

Generally, you can use the money from your asset based loan any way you want. The only real condition is that it must be used for a business-related reason. As long as you are using it for the well-being of your company, there are no restrictions.

2. Get Approved Faster

Some types of loans can take weeks or months to get accepted. This is not good if you need money right away. Fortunately, with asset based lending, you can get your loan in a week or two. As long as you can prove your company is profitable, you should have no problem getting approval.

3. Build a Good Track Record

Since asset based loans are easier to acquire, they are great for businesses that are looking to improve their credit history. As long as you pay everything off on time, you will show that you can be trusted with loans when getting them in the future.

4. Easier to Obtain in General

When you are trying to open a line of credit or get a more traditional loan, you need to prepare thoroughly in order to show that you can be trusted with this money. Asset based financing just requires you to show that you have assets that can be leveraged.

5. Predictable Cash Flow

Many small businesses find that it is difficult to find stability when just starting out. You may get a lot of revenue one month and hardly any the next. With reliable financing, you know you have money coming in and can plan your future expenditures accordingly.

6. Easier to Remain in Compliance

All types of loans have conditions you need to follow exactly in order to remain on the good side of the lender. The great thing about asset based lending is that there are very few of these conditions. This means you do not have to worry as much about making a mistake and can simply focus on paying the loan back according to the agreed upon timetable.


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