Leveraging Assets for Capital without Divestment

March 28, 2019 by CNH Finance, LP in category “Financing”

The need for working capital can often place businesses in an awkward position, especially if loans are not a desired or feasible option. Funding operation out of pocket can quickly deplete cash reserves. Cash advances can easily create more financial problems than they pretend to solve. Options can seem limited. More and more, businesses are leveraging assets they own to capital without having to divest.

The Limitations of Loans

Traditional loans can be limiting for a number of reasons. First, debt and lowered credit ratings can force businesses to scale back operations and growth projects. Second, the amount of financing available through traditional lending channels is getting lower over time, while interest on those loans is rising. Third, the high requirements set by lenders to access loans places adequate financing out of reach for many business owners across all industries.

Cash Advances Don’t Help

Cash advances are promoted as the alternative to loans, offering a debt-free experience with flexible payments and fast access to funds. What business owners realize after the agreement has been signed, however, are the high interest rates, hidden fees, and other charges. Cash advances are nearly impossible to repay ahead of schedule, and businesses are left with large balloon payments and compounded fees. There has to be a better way.

Leveraging Assets

To sidestep the drawbacks of both loans and cash advances, and still get access to working capital, businesses use asset based financing. Asset based financing allows businesses to leverage equipment, property, receivables, inventory and more, without having to divest. Asset based financing simply creates a re-usable line of credit based on the value of those items. This gives businesses a source of working capital with growth potential, without placing debt on the books or looming large balloon payments. As businesses acquire more assets and grow their operations, the amount of financing available will increase proportionally.

CNH Finance specializes in asset based financing solutions for businesses across all industries. We unlock the value of assets most lenders do not even consider. To get a secure and reliable source of capital that grows with your business, contact CNH Finance today.

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