Asset Based Lending
Asset based financing focuses on the collateral, management, future outlook and other resources available to the company. It provides immediate access to cash that has been previously tied up in non-liquid assets. This type of financing can provide an overall credit facility or a single line of credit.
Asset based loans are typically secured by the following types of collateral:
- Accounts Receivable
- Inventories
- Machinery and Equipment
- Real Estate
Companies that may benefit from asset based financing typically face the following challenges:
- Rapid Growth
- Turnaround
- High Leverage
- Short Operating History
- Buyouts of Shareholders
