Asset Based Lending: The Other Side Of Financing Receivables

We people think of accounts receivable financing, things like invoice factoring come to mind. However, there is an aspect of accounts receivable financing which can be leveraged, not for payment on open invoices, but to create a line of credit. Asset based lending is a powerful tool for small business owners that has its roots in accounts receivable.

How Asset Based Lending Works

Asset based lending is a revolving line of credit which is structured around those things owned by a business. In this context, the value of real estate, machinery, equipment, inventory, and receivables are taken into account to determine the spending limits on this revolving line of credit. Asset based lending gives small business owners the purchasing power they need to grow and thrive in a competitive marketplace.

Loans Are Not Always The Answer

Traditional bank loans are not always an option for small businesses. Sometimes, the high requirements, such as impeccable business credit ratings and strong financial histories are prohibitive to accessing loans. Other times, small business owners simply do not want to deal with taking a large sum of money all at once and assuming a large amount of debt, while getting locked into stringent payment agreements. Asset based lending provides a source of working capital that can be drawn upon as needed, and it is not designated for anything in particular. Businesses can use asset based lending for hiring employees, marketing, upgrading equipment, developing new products, or anything else to move the business to the next milestone and beyond.

Asset Based Lending Grows With Your Business

Asset based lending is one of the few financing options that actually grows along with your business. As the company gets new equipment, acquires more property, and generates more sales, the line of credit will also get reconfigured with a higher spending limit. Unlike traditional loans, asset based lending promotes business growth, rather than hindering it with debt. Asset based lines of credit are almost self-perpetuating. The credit allows businesses to grow, and as businesses grow, the lines of credit get greater, and so on.

Get The Line Of Credit Your Business Needs

Biz Com Loans provides asset based lending solutions to small businesses, as well as other credit solutions. Contact our offices today for a no-obligation consultation. Put our team to work for you, so you can grow your business successfully and take you operation to the next stage of development.


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