Are Asset Based Loans For Your Company?

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When having your own business, it is a known rule that you have to spend money to make money.  Well, what are you suppose to do if you don’t quite have the money to pay for certain things like purchase orders or research and development to help your company continue to grow?  Well, one great option that you and your company could use is going to be an asset based loan.

An asset based loan is a loan provided by a financial company rather than a bank like in the case with most loans.  These loans are going to be backed by a company’s account receivables and the company’s assets.  These loans are great for businesses that are growing and need extra capital to invest into themselves.  There is a vast range of loans available from $200,000 to even $15 million and more.  These loans are great for major finance companies that have a lot of extra capital and are looking to capitalize on their money.  One great thing about these loans is that you only pay interest on the money you have taken from the company so if you take less, there will be less interest.

The loan works by basing the amount of money a company would be eligible for off of a percentage of the company’s assets value.  If a company does not have much money in their inventory and in their assets, they are less likely to get a maximum value loan. 

Typically, companies that are the top selections for asset based loans are business to business companies that usually operate in the manufacturing industry and have sales from $10 million to $250 million and have a good track record of paying back their debts. 

Asset based loans can be used for anything the company wants to use them for and are a great way for companies to continue to grow even when they do not have a tremendous amount of capital.