A CFO’s Guide to Asset-Based Lending

If your business isn’t financially strong, asset-based lending can help.

Usually, business owners think about the loan when a business needs cash. However, businesses can choose from several lending options. With the asset-based lending option, avoiding poor terms is possible, and you’ll be able to get a loan that aligns with your needs.

Asset-based lending allows you to borrow money based on your assets. But what’s an asset? Essentially, it’s anything of value that your business has ownership of. While lenders can use these assets as collateral, they won’t accept just anything.

Here’s our asset-based lender in Kansas City, MO, offering a CFO’s guide to asset-based lending:

Weighing costs vs. benefits

While lender reporting requirements may be more common and costs can be higher, alternative financing from a lender can help businesses during their transitional period. Therefore, weigh their costs and benefits is important.

Remember, industry expertise is one of the biggest benefits a specialty lender offers. This expertise can lead to additional liquidity for your business that can make a significant difference in investing, making investments in growth initiatives, purchasing supplies, and meeting payroll.

Another important consideration is timing. This is because businesses usually seek out this type of funding to meet a short-term challenge. Complex committee approvals may be less timely and flexible than those with easy access to senior decision-makers, and banking regulations lead to better turnaround times.

An asset-based lender in Chicago, IL

Non-traditional lenders are more flexible

When structuring loans, non-traditional lenders can provide more flexibility. Why? Because they’re regulated in a different way from conventional lenders. Typically, banks have stricter terms with respect to repayment schedules, liquidity, loan limits, as well as other special covenants. This means factors like atypical customer concentrations, high-risk industries, fluctuations, performance hiccups, etc., won’t grant you any leeway.

Global Capital Partners offer the most active and effective real hard money loans in Detroit, MI, Minneapolis, MN, and Des Moines IA

Global Capital Partners is a private global commercial lender in NYC, offering various financing options, including construction loans and acquisition financing, mezzanine financing, permanent financing, structured joint venture financing, commercial real estate financing, private lending, hard money loans, and bridge financing in Chicago, IL.

Get in touch with them directly for more information on their asset-based lending in Saint Louis, MO, and Chicago, IL.

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