Is Asset-Based Funding Right for Your Business?
The popularity of asset-based lending is currently on the rise. Over the last ten years, this type of financing has become a valued source of capital for small businesses. It is a particularly useful option for companies that are asset rich, but cash poor, and looking to fund expansion ventures or support early development.
The advantages of asset-based funding can be numerous, but what makes this type of funding so appealing to SME’s is their ease of access. They offer many of the same perks and terms as standard loans, but the application process is simpler and approval is almost guaranteed.
In fact, the only real requirements are that a business be operating healthily, have robust forecasts for the future, and not have already used its assets as collateral on another loan. This handy guide to the advantages of asset based financing and asset based loans will help you get to grips with the basics.
The single most important advantage of using asset based financing is enhanced liquidity. If used in the right way, this type of lending can offer your business more financial solidity and increasingly reliable cash flows. This will allow you to retain control of any rapidly developing aspects of the company, without compromising profit margins.
Approval is Simple for Asset Based Loans
It is actually easier for most businesses to get approval for asset-based loans than it is any other type of credit. In most cases, the minimum requirement is a suitably extensive record of profitability and efficient financial management. If your business has assets that can be used as collateral on a loan, you are likely to be approved.
Flexible and Adaptable
The vast majority of asset-based loans have a significant degree of flexibility built into their terms. This means that there are usually only a handful of rules governing how a business can spend or invest the cash. As long as the money is used to stabilize, grow, or enhance the company, the spending decisions are yours to make.
Fast Application Process
If your business meets the eligibility criteria for asset-based financing, the application process should progress quickly. In fact, the application, approval, and underwriting processes for an asset based lending are much speedier than they are for more standard credit options. For most companies, with straightforward requests and no complications, asset based loans are approved in 2-3 weeks.
May Be a Starter Loan
There is a good reason why asset based funding is so popular with SME’s. It gives smaller businesses a chance to push forward with growth and expansion, at a time when they might not have the money to protect themselves against the inherent risks. Yet, in order to grow organically, you need investment. The good thing about asset-based loans is that they can also be used to establish suitability for future lines of credit.
Secure Lending with CFS
If your business is considering asset based financing and would like further advice, get in touch with the team at Capital Funding Solutions. We offer secure and reliable asset-based loans to businesses in Florida, Texas, New York, Georgia, Michigan, Virginia, and more.
Asset Based Financing & Asset Based Loans in Florida, Texas, New York, Georgia, Michigan, Virginia…