Expanding your small business is an exciting time, and asset-based lending will remove one of the primary obstacles preventing you from scaling your business—capital. What is asset-based lending, and how will a collateral loan help you grow?
Are Asset-Based Lending and Collateral Loans The Same?
Financial institutions generally categorize asset-based lending and collateral loans as separate, but most businesspeople see it as the same financing method. What is asset-based business lending? It allows companies to borrow money based on the liquidation value of their assets, and is a good tool to use when you need capital to grow but struggle to access traditional financing. Lenders are more likely to grant the loan for liquid assets.
Types Of Assets Used For Asset-Based Lending
What are the types of assets to use for asset-based lending? At Kore Capital Corporation, we accept your accounts receivable, and more. Learn more by watching this video on Asset-Based Lending.
How Can A Collateral Loan Help Your Small Business?
There are advantages and disadvantages to taking a collateral loan to expand your business. Do you urgently need to buy equipment for your manufacturing business because your new client has increased their order? The pro is your ability to grow the business at your pace. The con of taking a collateral loan is the risk of losing the asset when you cannot make the monthly payment. With a good balance sheet and a credit-worthy client base, you can afford the repayments.
What To Do Before Applying For Asset-Based Lending
How much capital do you need? Determining the loan amount is one of the first things to do before applying for a collateral loan. Asset-based lending grants you a percentage of the asset value. However, this might not be the whole amount you need. Gather all the business documentation you need to show your business is doing well and before signing the loan agreement. Make sure you understand the requirements.
Is your small business expanding, and do you need short-term working capital? Asset-based lending can make a difference. Contact us at Kore Capital today.