financing based on the value of a pledged asset
all assets are stored in a secure vault with 24/7 surveillance cameras
Trying to get a suitable loan to finance your business can be time-consuming and above all complex. More importantly, credit history, cash flow, and business profitability play an important role in determining if you’ll get the loan or not. Not to worry, with loan options like asset-based lending, you can get access to enough cash to start and run your business. Now the million dollar question is what is asset-based lending and how can you qualify for this loan? Read on, and you’ll find out.
Asset-based lending is a type of financing option that allows businesses to borrow money based on the value of the asset pledged as collateral. The terms and conditions that come with this kind of loan entirely depend on the type and value of asset offered as security to the lender. For many lenders in this industry, they prefer highly liquid securities they can easily convert to cash without any hassle especially when borrowers fail to keep with their own end of the bargain. To put things clearly, the more liquid the asset pledged, the higher the loan to value ratio. Also, for people intending to take on this kind of loan, it’s important you know that loans granted under this type of loan option are never the full value of properties pledged.
Collateral Loans with No Credit Check
Borrow any amount – from $1,000 to $1,000,000. No credit check or financials needed. We lend money fast by using the value of your asset to create the loan. We do not look at your credit score or your income.
Why Choose an Asset Based Loan
The cool thing about this type of financing option is the interest rate charged. Unlike other loan options, the interest charged on asset-based lending is less than the interest charged on an unsecured loan or line of credit.
With this type of loan, if the borrower fails to meet his/her obligations, all the lender has to do is seize the property and sell it to recoup the money given out as loan. While the asset of the borrower secures the lender’s interest, the size of the asset also determines how much the borrower can take as loan. Interest charged on asset-based lending is determined by the size of the loan and ranges from 7% to 17%.
There are many reasons why companies and businesses may prefer asset-based lending as opposed to other financing options. First, the cost of issuing bonds or shares may be too high. Again, through asset-based lending, a company may be able to raise capital through the security markets especially if it is in need of immediate funding for serious projects like mergers, acquisitions and inventory purchases. Also, when getting an unsecured loan is proving challenging, businesses may opt for asset-based lending. Without a doubt, businesses that decide to go with this kind of loan option usually have cash flow problems that are a result of massive growth. Both small and medium-sized companies that are stable but have the assets to be financed are people who would do well to take on this kind of financing option.