​​Nork Capital Trading


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.

Our loan consultants will help you get the cash you need for your business. Contact us today and tell us about your business

  • Receive an advance up to 85% on accounts receivable, up to 80% on inventory, up to 80% on machinery and equipment.
  • Stay on top of your finances with access to local decision-makers and one point of contact working alongside you.
  • Seize growth opportunities, prepare for season demands, finance turnaround situations and cover the cost of materials.

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.

  • Accounts receivable. – This is the most popular type of collateral among asset-based lenders, due partly to the liquidity aspect of these accounts. Also, this form of collateral has a pre-set value.
  • Inventory takes second place to accounts receivable on the list of collateral most favored by asset-based lenders. This is mainly because inventory lacks the stabilized value and liquidity of accounts receivable. It is necessary for inventory to be sold in exchange for cash to establish value. In addition, inventory aspects like LIFO and FIFO make value assessments difficult.
  • Although they are often acceptable collateral for asset-based lending approval, manufacturing machinery and business equipment are usually more helpful for obtaining a term loan. Their worth as collateral is longer lasting and equal to the duration of their useful operation. Currently, trademarks and customer lists also can be used as collateral for some ABLs. 

Since both accounts receivable and inventory are renewed throughout the year at periodic intervals, they are in the favored classification of eligible collateral.