Business loans have long been the mainstay for entrepreneurs, however, a new school of thinking has taken over. More business owners across all industries are thinking outside of the box…
Every business uses equipment of one form or another to perform daily operational tasks or to complete customer requests. What many entrepreneurs do not realize is that the business equipment they use can be tapped as a renewable source of working capital without having to rely on bank loans.
Owning Business Equipment
In order to unlock the working capital hidden in your business equipment, it must first be owned. Leased equipment cannot be leveraged to for this special financing program. When business equipment is owned, it becomes a hard asset. This becomes apparent every year during tax season, when business owners claim the value of the equipment as a deduction.
Asset Based Credit
Asset based credit is a revolving line of business credit structured around the various things owned by a business. Not all businesses own the facilities in which they operate. However, companies do own the receivables generated by customer orders, and many own the business equipment used to fill those requests. By having all owned equipment evaluated, a revolving line of credit is created, giving businesses access to extra working capital and purchasing power.
Asset Based Credit Is Not A Loan
Asset based credit does not put any debt on the balance sheets. As a whole, asset based financing is treated like any other business line of credit. There is no debt involved, and credit ratings are not compromised. If anything, asset based lines of credit allow businesses to build their financial standing so they can access larger funding programs.
This Is Not A Sale Leaseback Program
Sale leaseback programs are short-term loan programs where equipment is used as collateral, and businesses end up “leasing” the equipment back to repay the funds borrowed. Asset based lines of credit do not operate that way. With asset based lines of credit, companies still retain full ownership of their business equipment. Asset based financing simply creates a revolving line of credit based on the value of the equipment, without having to sell it to the lender.
Unlock The Potential Of Your Business Equipment
At CNH Finance, we offer the most comprehensive asset based lines of credit. We will perform an in-depth analysis of your business equipment to provide the largest asset based line of credit possible. As your business acquires better equipment, we will re-evaluate the changes to increase the spending limit on your line of credit, to help your business grow. Contact CNH Finance today to learn how your business equipment can give you an extra source of working capital for long-term success.