Asset-based Lending can be especially helpful to small businesses
What are the benefits of Asset Based Lending?
Asset-Based Lending' A business loan secured by collateral (assets). The loan, or line of credit, is secured by inventory, accounts receivable and/or other balance-sheet assets. Also known as "commercial finance" or "asset-based financing".
Asset Based Loans are based on the value of your accounts receivable, inventory and equipment. This flexible type of financing is typically in the form of a revolving line of credit. With Asset Based Financing you can take on growth opportunities, purchase new equipment and fund acquisitions.
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This type of funding can be the deciding factor in whether or not they will overcome any existing financial difficulties and attain success. For prompt loan approval, company owners and officers must be prepared to provide detailed financial statements and accounts receivable and accounts payable records. The lender may also require personal financial records from the business owner or owners. Other items required by the lender may be copies of invoices to be purchased and individual customer purchase orders, as well as accurate business equipment listings. In some cases, the company applying for funding must provide the lender with a copy of their articles of incorporation and by-laws.
Nork Capital Trading works with great lenders that offer asset based lending for companies that need to maximize their borrowing capacity using accounts receivable and inventory as collateral. Receivable based financing combined with inventory finance has become a useful tool for many undercapitalized businesses. Unlike traditional bank debt that relies heavily on balance sheet ratios and cash flow projections as loan criteria, Nork Capital Trading will evaluate a client's business assets as its primary focus to establish the borrowing base. The result is usually far greater borrowing power than can be achieved from a traditional cash flow banking approach due to our expertise in industry specialization.
What Type of Collateral is Most Often Required for Asset-Based Lending?
Acceptable collateral for most asset-based loans (ABLs) includes accounts receivable, inventory, business equipment, and factory machinery. Appropriate inventory may be both finished goods and marketable raw products. In some instances, certain personal assets of business owners may be requested by lenders as collateral.
Since both accounts receivable and inventory are renewed throughout the year at periodic intervals, they are in the favored classification of eligible collateral.
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Nork Capital Trading Llc
2550 NW 72nd ave STE 113
Miami, Florida 33122
FAX: (305) 434-8329
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