ABL Credit: What The Banks Do Not Tell Entrepreneurs

October 12, 2017 by CNH Finance, LP in category “Financing”

Business owners seek lines of credit in order to have an extra source of working capital on hand which can be used for a wide range of purchases and projects. Many times, business owners find themselves inundated with offers from banks and traditional credit providers with a lot of caveats hidden in the fine print. However, many business owners are turning to ABL credit (or Asset Based Lending Credit) as a much more affordable and flexible alternative to traditional lines of credit.

Special Introductory Rates

Special introductory rates are nothing new to business credit offers. Many entrepreneurs have been caught in agreements for lines of credit starting with low – and sometimes no – interest rates, only to have them skyrocket after a few months or a certain amount is used. ABL credit does not have interest rate hikes. In fact, ABL credit is the most consistent business line of credit entrepreneurs can have, with interest rates explained to prevent the problems which occur with traditional credit providers.

Credit Limits

For new and small businesses, traditional lines of credit typically offer very low spending limits. The reason for this is that traditional credit providers base the amount of credit on financial history and existing debt. Since new and small businesses usually do not have the established financial history to have stellar credit, and often are paying off loans taken out to help launch operations, the amount of credit extended is very low. Sometimes, the lines of credit are equal to or lower than most people have on personal lines of credit. ABL credit is structured differently. ABL credit is based on the value of receivables, equipment, vehicles, inventory, and other fixed assets.

ABL Credit Grows With Your Business

Business owners know that they usually have to negotiate with credit providers to get an increased spending limit. Asset Based Lending credit is the only revolving business lines of credit that grows organically and proportionally with your business. As sales increase, new equipment is acquired, consumer demand calls for expanded inventory, and as businesses move into larger facilities, the value of their fixed assets grows. The spending limit on ABL credit is regularly reviewed and compared with business growth to help entrepreneurs maintain their momentum and continued success.

If you need an extra source of working capital which is affordable, flexible, and which promotes growth, ABL credit is a viable alternative to traditional credit providers. Contact the experts at CNH Finance to learn more.

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