Flexible Financing: When Traditional Loans Are Too Restrictive

July 27, 2017 by CNH Finance, LP in category “Financing”

Some businesses do not want to enter into debt based financing agreements, such as bank loans. Other times, businesses need something more flexible than loans, or they simply do not want to deal with the red tape of traditional lenders. Fortunately, there is a flexible financing solution which gives business owners the advantages they want, without the hindrances of traditional loans.

Traditional Loans Do Not Offer Flexible Financing

Traditional loans are very rigid. Businesses apply for loans, the institution provides capital, and then they are locked into payment schedules and credit ratings suffer. If businesses end up using less than the amount provided by the loan, they cannot exactly return the difference and have the amount owed adjusted accordingly. And that is even if the loan application is successful. Traditional loans have high requirements for businesses, and the application process can take time, due to internal schedules and bureaucracy. Business owners need flexible financing that does not negatively impact credit ratings, and allows for access to a source of working capital as it is needed, when it is needed.

Creating Flexible Financing From Fixed Assets

Asset based lending is created from the value of things like receivables, vehicles, equipment, property, inventory, and more. The value of those items is used to create a revolving line of credit. Asset based lending provides a source of flexible financing which can be drawn upon as needed. Because asset based lending is a revolving line of credit, the amount of financing used is replenished through payments, giving businesses an unending source of capital.

Debt Free Financing

Not only does asset based lending provide flexible financing, it is not a debt based structure. Businesses that use asset based lending do not have to deal with debt on the balance sheets or negatively impacted credit ratings. The reason for this is that asset based lending is not structured around future profitability. There is not risk involved for the business or the financing provider. Everything is right there in the value of the assets already owned by the business. As the business grows, the amount of financing available also increases. Businesses use asset based lending to ensure long-term success.

Get The Flexible Financing You Want

At CNH Finance, we offer the most comprehensive asset based lending solutions nationwide. Whether you are trying to position your business for growth or simply want an extra source of capital without taking on debt, we can help. Contact us today to get started.

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