Greenwich private lenders offer a wide range of financing programs to small businesses, as a means of sidestepping the need for traditional loans. However, not all lenders are the same,…
For healthcare providers, the financing arena can often be confusing, especially if your organization is seeking a solution outside of traditional banks. At CNH Finance, our team has created a list of questions and answers to help healthcare providers understand asset based lending, or ABL. This should remove any confusion about what it is, how it works, and how ABL financing differs from both bank loans and other lending products.
Does asset based lending place debt on the balance sheet?
No. One of the big things that sets asset based lending apart from bank loans and other financing solutions is that no debt goes on the books and healthcare providers get to preserve their credit ratings.
Is asset based lending reusable?
Yes. Unlike single-use loans, ABL works just like a revolving business line of credit. Capital is accessed as needed, and repaying the balance replenishes the amount of financing available.
How are financing amounts determined with asset based lending?
Healthcare providers ranging from private practices to large hospitals all have owned assets. Equipment, property, vehicles, receivables, and more are considered assets, each with their own inherent value. After an in-depth analysis, the value of those owned assets will be used to create a revolving line of credit, which can be accessed as needed.
Does ABL financing have any designated or specific use?
Asset based lending provides discretionary funding. Healthcare providers can use the capital from ABL for anything their organization needs, including making payroll, smoothing out revenue cycles, purchasing supplies, or paying down existing liabilities. Asset based lending also makes acquisitions and mergers much easier, as the combined assets provide additional capital.
What if I acquire more assets later on?
The great thing about asset based lending is that it is the only financing solution pre-configured for growth. As healthcare providers acquire more equipment, expand into new facilities, or see a rise in receivables, a new analysis will be performed to increase the amount of funding available.
What if I have other questions about how asset based lending can work for my organization?
If you have more questions, don’t hesitate to contact the team at CNH Finance. We are a national leader specializing in asset based solutions for the healthcare industry. Our team is happy to answer any questions you might have, and to provide a manageable alternative to bank loans and cash advances.