While every business model is different, most businesses require financing at some point or the other. The need for financing could arise due to cash gaps, seasonal sales, expansion projects, or when businesses are struggling to stay afloat. There are various financing options provided by traditional lenders and private lenders. Asset-based loans are the preferred choice, particularly among growing businesses that require working capital.
What are the benefits of choosing asset-based lending?
Easier and quicker to secure than unsecured loans or lines of credit
Traditional banks take months to give a verdict on loan applications, which is less than ideal when it comes to making time-sensitive payments. They also rarely provide the entire loan amount required. Luckily, private lenders like GCP Fund approve asset-based loan requests quicker. The loan application is also rather straightforward, with fewer documents required.
ABL offers lower interest rates
Asset-based loans are collateralized. Often accounts receivables, inventory, machinery, or equipment are used to secure the loan. In the event of non-payment, the title of the collateral transfers to the lender. Since these loans are backed by a guarantee in the form of assets, its interest rate is significantly lower than unsecured loans.
Asset-based lending allows a business to predict future cash flows more accurately, promoting financial stability. Organizations are able to plan projects better to achieve their strategic goals and, ultimately, financial stability. This aspect is beneficial for companies in their growth stage operating with tight cash flows.
Improves the credit worthiness of a business
The credit score of a business impacts its ability to secure financing in the future. A commercial client can improve their credit worthiness by paying lenders and vendors on time. Asset-based loans give your organization the opportunity to service repayments according to schedule and improve your payment history. Payment history is a major component of your credit score; therefore this improves your credit score significantly.
Global Capital Partners Fund is a leading private lender based in NYC with over 3 decades of experience in the industry. The company provides a variety of commercial financing solutions that range from hard money loans in Dallas, TX, to asset-based lending in Denver, CO, and even bridge financing. Their asset-based lending provides financing for working capital, seasonal revenue gaps, mergers & acquisitions, recapitalization, shareholder buyouts, and much more. The assets used as collateral in ABL range from current assets like accounts receivable and inventory to machinery and equipment. Get in touch with their representatives at +1-800-514-7350 or email@example.com.