Asset-based loans offer businesses access to the capital they need for growth and success. They are a powerful tool that makes financing available to companies in need of an agile, real-time solution.
What Are Asset-Based Loans?
Asset-based loans are precisely what they sound like – loans made to a business based on the value of a hard asset, such as equipment, real estate, and the like. In these situations, the asset is used as collateral to guarantee the lender a return even if the business cannot repay the loan.
How Are Asset-Based Loans Made?
An asset-based loan will be made after careful scrutinizing of the asset in question. The total worth of the asset (or assets, if more than one is being used as collateral) will need to be determined. Once this assessment has been made, the lender will advance a portion of the value to the business owner.
What Businesses Use These Loans?
While asset-based loans can be beneficial for almost any business, those that benefit most usually own many high-value assets, such as distributors, manufacturers, retailers, and wholesalers.
Are Asset-Based Loans the Same as Asset Factoring?
No, they are not the same. While they seem similar, that is only superficial. With asset factoring, the business must sell the asset to extract value. With asset-based loans, the asset remains the property of the business and is only relinquished if the business is unable to make repayment of the loan. This allows businesses to access the capital necessary for growth without sacrificing assets critical to that growth.
Are you ready to learn more about asset-based loans and how they can benefit your business? Contact us today at Gulf Atlantic Commercial Capital. We would be happy to discuss your needs, your assets, and come up with a lending solution that fosters growth and stability.