Asset based financing, or asset based lending, often receives disparaging comments from traditional lending institutions. A lot of the information available is misleading or written by…
Consumer confidence has reached new heights, the likes of which haven’t been seen in almost two decades. With high consumer confidence, businesses are experiencing many opportunities for growth and expansion. However, despite soaring consumer confidence and growth opportunities, businesses are still hesitant about taking out loans.
What Consumer Confidence Means
Consumer confidence is more than a warm fuzzy feeling. Consumer confidence means people are buying more in both quantity and quality. Instead of settling on a product, consumers are purchasing what they truly want and need. This confidence also means businesses are producing more, purchasing materials and supplies, hiring more people, upgrading equipment, and more. If businesses want to position themselves for growth, now is the time to act.
The Strange Backlash to a Strong Economy
Even though the economy is strong for everyone involved, there is something strange happening with traditional lending channels. Interest rates on debt-based loans are rising, and are projected to rise well into the next year. With a strong economy and businesses positioning themselves for growth, higher interest on debt is flat out counterproductive. In a strong economy, debt hinders success and momentum for business owners. Should the economy take a turn south, then that lingering debt will make it very difficult for businesses to remain competitive.
Growing without Debt
Instead of using debt-based financing, businesses are taking advantage of asset based solutions. Asset based solutions create a revolving line of credit around the value of equipment, receivables and more owned by a business. The working capital provided by asset based solutions is debt-free and can be used for everything from minor purchases all the way up to large-scale growth projects. As a business grows, so will the amount of financing available. Asset based solutions allow businesses to sidestep the trap of traditional loans while achieving their true potential in a strong economy. Even as economic cycles change, asset based solutions provide a reliable source of capital. In a sense, asset based lines of credit provide recession-resistant solutions.
CNH Finance specializes in debt-free asset based lines of credit for businesses spanning all industries. To kick your business into gear and take advantage of growth opportunities without rising interest rates on loans, contact our offices today.