For new and growing businesses, having access to working capital is essential for continued success. However, many entrepreneurs have a tough time accessing the prohibitively high requirements for traditional bank loans. Similarly, many business owners would rather avoid placing debt on the balance sheets, if possible. Instead of taking out loans, many businesses are leveraging their assets for the working capital they need to grow and thrive.
Asset Based Lending
Asset based lending is a revolving line of credit structured around those things owned by a business. Machinery, equipment, inventory, and receivables are evaluated to create a source of working capital which can be drawn upon as needed. The key is that asset based lending provides working capital from owned items. Leased equipment, land, or facilities cannot be used for asset based financing programs. Instead of having to take a lump sum of money, and all of the debt associated with traditional loans, asset based lending provides a flexible solution which is treated like most other lines of credit.
Financing That Grows With Your Business
Traditional loans offer one-shot financing which leaves business owners paying off debt on a very rigid schedule. Asset based financing, on the other hand, grows along with a business. As equipment is upgraded, real estate is acquired, and receivables increase, the spending limit on the line of credit also grows. In a sense, asset based lending rewards success with access to more working capital, instead of hindering growth with additional debt. Additionally, asset based lending does not compromise business credit ratings. Because this is a line of credit, businesses can actually boost their credit ratings by using this source of working capital.
Who Uses Asset Based Lending?
Asset based lending provides working capital for businesses of all sizes, across all industries. Healthcare providers, manufacturers, construction companies, lean IT start-ups, energy production businesses and everyone in between can take advantage of the benefits of asset based financing. When taking on debt is something business owners prefer to sidestep, asset based lending is the viable option.
Get The Working Capital Your Business Needs
At CNH Finance, we specialize in asset based lending to give businesses the purchasing power and access to the working capital they need for long-term success. Contact our offices today for a no-obligation consultation. Our team of experts will work with you to provide the financing you need to reach our next big milestone.
