With the increased number of benefits that asset-based lending offers, it is no wonder this financing option has gained massive acclaim over the years. While it may have some similarities with products such as line of credit, asset-based financing has proven to be the better option. Below, we look at some benefits that you can get from asset-based loans.
Fast Approval Processes
Asset-based lending comes with a fast approval process, a factor that relies on minimal document approval processes. Based on qualifications such as a company’s profitability and financial controls, application and underwriting processes will often take only a number of weeks, ensuring you keep up with your growth without any setbacks.
Unlike other financing options, asset-based lending allows businesses to spend their funding as they like, with the only restriction being that its use falls within business operations. Since this loan is also linked to collateral and accounts receivable, financing also grows with every increase in business sales, allowing you to benefit from flexible funding.
Acts as an Intermediary to Other Financing Solutions
Qualifying for alternative lines of funding such as lines of credit will occasionally call for several requirements, an aspect that businesses in their intermediary stage of growth will often lack. However, using asset-based loans allows such companies to build their credibility, allowing lenders to open pathways for cheaper solutions.
Easy To Acquire
Getting asset-based loans only requires you to have a proven record of profitability, with collateral such as accounts receivable and invoices being enough to get funding. If you also have adequate financial controls and appropriate inventory, your guarantee for getting asset-based funding also increases, a factor that often eludes other financing options.
Asset-based lending also comes with the benefit of improved liquidity, providing you with the necessary cash flow required to run everyday business operations. It especially comes in handy during the rapid growth of your business, helping you achieve financial stability without any difficulties. In addition to this, businesses with seasonal revenues can also benefit from improved liquidity, not forgetting those that occasionally have tight cash flow needs.Whether you are in need of a cheaper solution or a flexible funding option, contact Park Cedar Commercial Lending today for asset-based loans.