How Asset-Based Loans Can Help Your Business?
by Kevin Smith AuthorWhat Is an Asset-Based Loan?
When
you get an asset-based loan in Alpharetta, you get a loan that is secured by
assets. In this case, assets can be multiple things such as accounts
receivable, equipment, and inventory. Similarly, this type of loans can be
secured by other balance sheet assets. Any of these assets can be considered
collateral to help secure your loan. So, when your company is considering
taking out a loan to deal with cash flow, you might want to include your assets
to help pay for the loan. In the case that you can't cover the cost of a loan,
you might be able to use assets for assistance.
More on Assets
Any
asset-based loan is centered on the value of the assets which you pledge as
collateral. Your loan is literally dependent on these assets.
Moreover, the value of these assets is subjective to your lender. So, when you
look for a lender, try to find a lender who gives you the most for your assets.
And lenders often like highly liquid securities. So, if you have highly liquid
securities that can be exchanged for cash, you might have a good chance of
getting a loan. Lenders tend to prefer this in situations where you default on
paying the assets. Having highly liquid assets may also increase your
loan-to-value ratio, helping you get a bigger loan that you might need. You
want to get as much value as you can from your pledged assets.
Lower Interest
If
you're concerned about paying a big interest rate, you won't need to be. Often,
asset-based loans have lower interest rates than a line of credit or an
unsecured loan. The interest rate of asset-based loans normally ranges from
seven to seventeen percent. This rate is often decided depending on what size
loan you take out. Your interest rate may also be referred to an annual
percentage rate or APR. Moreover, your assets are there to help you pay off
your loans. If you decide to default, your lender can acquire your assets, sell
them, and cover their losses. Remember, your interest is secured by what assets
your pledge.
Why Asset-Based Lending?
If
you're having trouble issuing shares or bonds, getting an asset-based loan in
Alpharetta might be your answer. Companies often use
asset-based loans to help cover the cost. Moreover, if you need help paying for
time-sensitive projects, having a loan can help you. Mergers, acquisitions,
inventory purchases, and other time-sensitive projects are all good reasons for
taking out an asset-based loan. And don't worry about dealing with unsecured
financing. Asset-based loans are there to assist you. And if you just
experienced cash flow problems from rapid growth, your company can find an
asset-based loan to help stabilize things.
Sponsor Ads
Created on Feb 21st 2018 02:55. Viewed 463 times.