How asset based loans work
Asset-based financing serves businesses, not consumers and is often used by small to medium sized businesses to cover short-term cash flow obligations.
If a business is looking for a loan but cannot show proof of enough cash flow or liquid assets to cover the loan, the lender may offer to approve the loan using its physical assets as collateral.
The terms and conditions of an asset-based loan often depends on the type and value of the assets offered as collateral. Lenders prefer highly liquid securities that can be converted to cash if the borrower defaults on the loan repayments.
Loans using physical assets are considered risky. The maximum loan amount will be less than the value of the assets.
Interest rates charged on asset-based loans are lower than rates on unsecured loans. Rates depend on the applicant's credit history, cash flow, and length of time doing business.
WHO USES ASSET-BASED FINANCING?
Small and mid-sized companies that are stable and that have physical assets of value.
Large corporations may also get an asset-based loan to cover short-term needs.
The cost and terms of issuing additional shares or bonds in the capital markets may be too high.
The cash demand may be extremely time-sensitive, such as in the case of a major acquisition or an unexpected equipment purchase.
DO WE OFFER ASSET-BASED LOANS?
We have a lender/Investor underwriting group sources that can provide funding up to 30% to 90% of the "proven value" of the asset offered as collateral for the loan.
Now you can get asset based loans for your business. Ready, willing, and able to fund viable businesses with assets to be used as collateral worldwide.
WE CAN ALSO HELP WITH:
- Business Based: Accounts receivable, aerospace leases, bankruptcy chapter 11, bankruptcy receivables, commercial contracts, commercial deficiency portfolios, commercial leases, construction receivables, equipment leases, equipment timeshares, international receivable, letter of credit, medical receivables, partnership agreements, purchase orders, sports contracts, trade acceptance drafts, vendor carry-back paper, and warehouse inventory lines.
- Contingency Based: commercial judgments, commissions, consumer judgments, corporate charitable contributions, franchise fees, license fees, royalty payments (including mineral rights fees), and sales revenue.
- Government Based: farm contracts and conservation reserve payments, lottery winnings, and tax refunds.
- Insurance Based: annuities, casino winnings, corporate retirement plans, funeral purchase assignments, life settlements, prizes and awards, and structured settlements and class action awards.
ASSET-BASED FINANCING TERMS
- Loan Amount: $3 million up to $100 million.
- Funding Time: 3 to 7 days after the receipt of the required items and documentation needed by underwriting, after loan approval, and depending on the lawyer's time to draw up the loan agreement/contract.
- Loan Term: 6 to 12 months or longer
- Loan to Value: 30% to 90%, depending on the asset/collateral.
- Terms: The funding parameters, specific terms, timing, and costs will be based on the business analysis, overall risk assessment, strength of the project, and the Principals. Since our sources are very competitive, the Principals' project will receive the rate and terms that it deserves.
WHAT TYPES OF ASSETS ARE WE ABLE TO FUND?
- Commercial real estate
- Assignable assets
- Sports contracts for players (football, soccer, basketball, baseball, hockey, etc.)
- Precious metals
- Accounts receivable
- Fine arts
- Precious metals (Gold, platinum, copper, silver, etc.)
- Energy (Oil, Gas, Coal, etc..)
- Producing and non-producing assets
- Minerals or metals located in a secure location or bonded warehouse, etc.
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