Asset Based Loans

Asset-based loans are usually from commercial finance companies (as opposed to banks) that are offered on a revolving basis and collateralized by a company's assets, specifically accounts receivable and inventory.   Asset based loan financing provides short term restructuring of a companies’ financial situation to facilitate maximum cash flow.  It provides a period of recovery time and a financial operating environment where a company can demonstrate how it could perform with a long term loan in place.  This allows a company to show it is worthy of long term financing. 

Companies that may be rapidly growing, highly leveraged, in the midst of a turnaround or undercapitalized. In addition, asset-based financing works only for companies with proven accounts receivable, and a demonstrated track record of turning over their inventory several times each year.  When business opportunities appear in the market, access to conventional financing may not be executed quick enough to take advantage of the situation.  There may also be the need to stretch resources to accomplish a company’s objectives and conventional resources will not handle it.  Start Quotes