Asset Based Lending/Lines of Credit/Invoice Financing

Let your CPA and banker focus on tax reduction and checking accounts. Business Capital is better equipped to help your business make sense of the funding solutions best suited for your situation with the best terms possible.

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ASSET BASED LENDING TERMS

⇒ Loan Amounts

$100,000 $10,000,000

⇒ Loan Term:

1-2 years

⇒ Time To Fund:

as little as 8 business days

⇒ Interest rates:

.70%- 1.3% monthly

LEVERAGE YOUR ASSETS TO SECURE THE FUNDING YOU NEED

Many business owners find their companies mired in debt and struggling to make a profit. Upon closer examination, companies often have unleveraged value right under their noses that, if uses properly, could provide the liquidity they desperately need to reduce debt and help them grow.

Business Capital Consultants work with small businesses across multiple industries that have great assets but are also struggling with debt. We often see businesses showing losses due to things such as large equipment debt or other debt instruments with very long terms and high interest rates. Most business owners are not financial experts and often rely heavily on their CPAs and lenders to provide guidance on the financing they need. Because CPAs are usually focused on reducing tax liability and traditional lenders are typically focused on selling products for their institution, businesses are often left with debt instruments that are a poor fit for their specific situation.

Business Capital Consultants offers a better way. If your business has significant accounts receivable and no UCC filing, those receivables can be converted into liquidity to retire much of the debt as well as capital to help the business grow. Depending on the business’s specific situation and the business owner’s goals, leveraging those assets could be in the form of a line of credit or a variety of other lending vehicles. In addition, inventory can be leveraged to secure additional liquidity in order to fuel further growth or provide extra flexibility.

Funding Solutions

Our clients have a variety of funding solutions at their disposal. The problem is most are not aware of them. Business Capital Consultants helps clients secure any of the following capital solutions:

Banks with an asset-based lending division often have minimums of $1 million. This type of loan can be tied to accounts receivable in addition to a company’s inventory. In addition, other forms of collateral can be used to extend limits or add more flexibility where necessary.

  • Ideal for companies with valuable assets to use as collateral.

A line of credit, securing and accessing capital only when needed, that is tied to a company’s assets, whether they be accounts receivable, inventory or some other form of collateral.

  • Excellent for companies that need access to capital but with flexibility on when and how they draw on that capital.

Financing can be provided for companies with orders to fulfill. This usually does not exceed 50% of the deliverable product or service that is used as a form of collateral.

  • Perfect for companies that have significant purchase orders to fulfill but not the capital to do so.

Companies can turn their accounts receivable into capital with a number of invoice financing solutions. These are usually short-term loans with relatively high interest rates but fast and automated payoff timetables.

  • Ideal for companies with valuable outstanding invoices that can be turned into fast capital.

For companies that require very fast turnaround with without collateral to secure the loan, cash advance or short-term working capital solutions may be the answer. There is a premium for the rapid turnaround as well as the risk a lender takes on.

  • For companies that need fast capital but with little collateral to work with.

Let your CPA and banker focus on tax reduction and checking accounts. Business Capital is better equipped to help your business make sense of the funding solutions best suited for your situation with the best terms possible.

The Pros and Cons of Asset-Based Lending

Many businesses don’t realize the amount of value right under their noses — their unleveraged assets. Thanks to asset-based lending, you can squeeze more value out of your assets by using them as collateral for financing.

However, we understand why many businesses aren’t maximizing the potential of their assets. Few business owners have time to scrutinize their balance sheets.

As a result, they may take on financing sources that don’t suit their needs, leaving them in unnecessary debt. All the while, their assets go untapped.

At Business Capital Consultants, our goal is to get financing that fits your situation best — and that often means scanning your balance sheet to find assets you can leverage to get more funding. 

Of course, we also want you to be an informed borrower. To that end, we’ve defined the asset-based lending options at your disposal and explained their pros and cons below. Read on to learn more.

Types of Asset-Based Lending

  • Asset-Based Loans

Asset-based loans are loans borrowed against one of your assets. You can use inventory, accounts receivables, fixed assets, and many other asset types.

  • Asset-Based Credit Line

Asset-based credit lines offer flexible access to capital up to a specified limit. Collateral types can be the same as asset-based loans.

  • Purchase Order Financing

Purchase order financing is a short-term financing option that lets you borrow against purchase orders you receive from clients or customers. Once you deliver the product in the purchase order, your lender collects a portion of your earnings.

  • Invoice Financing

Invoice financing lets you leverage your accounts receivable for cash. You sell your accounts receivable to a lender, but you don’t receive the full value. The lender keeps some funds as “interest”.

  • Merchant Cash Advance

A merchant cash advance isn’t a loan. Rather, it’s an advance against future credit sales. Your provider hands you a fixed sum of money. In exchange, they take a small portion of your credit sales for a defined time.

The Pros of Asset-Based Lending

  • Lower Requirements

Collateral reduces lender risk, as it ensures they get something of value if you default. Consequently, your credit score need not be as high as unsecured debt. 

Startups and other young businesses will find asset-based lending to be a particularly accessible form of debt.

  • Types of Financing Available

Asset-based lending suits a wide range of businesses since you can leverage several types of assets. 

For example, one business could have an excessive amount of outstanding receivables that you can leverage for funds.

Another firm might leverage their large amount of inventory to get an asset-based line of credit.

  • Fast to Acquire

Most forms of asset-based lending don’t take long to acquire. With merchant cash advances in particular, you can receive your funding in as little as a day.

  • Financing Growth Potential

You can get credit increases on several forms of asset-based lending as your business grows. For example, if you have a line of credit on your accounts receivable and see sales growth, you can get approved for a credit increase with relative ease.

  • Flexibility

Asset-based financing tends to have fewer restrictions on usage than other forms of debt. 

The Cons of Asset-Based Lending

  • Risk of Losing Assets

If you fail to pay back an asset-based loan, the lender can seize the asset you use as collateral.

  • High Interest Rates

Many forms of asset-based lending have high interest or factor rates. Asset-based loans are the only form with relatively low rates.

  • Borrowing Limits

Your borrowing limit is generally equal to the value of the asset. Depending on your situation, you may not receive as much funding as you need.

Is Asset-Based Lending Right For You?

Chances are you’re leaving funding on the table. It never hurts to have an expert analyze your balance sheet and see if you can leverage any assets.

That’s what we can do for you at Business Capital Consultants. If we find any unleveraged assets, we’ll identify the best form of asset-based financing for your business, find an excellent asset-based lender for you, and handle the application process.

Schedule your free 30-minute consultation with Business Capital Consultants today.

Business Capital Consultants is here to help if you aren’t sure which short-term financing source is right for you. We’ll deal with the paperwork and phone calls for you so you can get the funding you need without wasting valuable time.

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