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How Asset-Based Loans Can Help Your Business?

by Kevin Smith Author

What 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.


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About Kevin Smith Senior   Author

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Joined APSense since, December 7th, 2016, From Utah, United States.

Created on Feb 21st 2018 02:55. Viewed 463 times.

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