If you own a small business and are short on cash, you can do many things to put some money in your pocket. One of these things is getting an asset based loan. Below is information about what this type of loan is, as well as other information so you can decide if you would like to get this type of loan.
Asset Based Loan
An asset based loan is a loan that you get from a lender and put up collateral to cover the amount of money you borrow. Companies ask for collateral in case you do not pay your loan back. This is because they will take the collateral from you to pay for the loan. This type of loan works great for someone that has bad credit or has no credit at all.
Types of Collateral
There are different types of collateral you can use to get an asset based loan, including:
Accounts Receivable
You can use your accounts receivable as collateral. This is the amount of money your customers owe your company. If you choose this, you have to give the lender offering you the money a list of your customers and how much they owe you. The lender will go over the list and then offer you a certain percentage of what they owe you as your loan amount. You will then set up a separate account for the money your customers pay you. The lender will take the monthly payment directly from the account.
Inventory
You can also use the inventory that you own as a collateral. You have to hire a professional to have the inventory valued. The lending company may also hire their own professional to value your inventory also to see if they come up with the same amount. Once the amount is approved, the lending company will offer you a percentage of this amount.
Equipment
If you own a lot of equipment this would be a good way to get your loan. Equipment is generally worth much more than inventory. For example, if you own a warehouse and have a lot of tow motors and dock equipment, you can use these. If you have an office, you can put your computer equipment up for collateral, such as your network servers, routers, computers, laptops, etc. As with inventory, you will hire a professional to value your equipment for you.
Contact an asset based lending company to learn much more about these loans and what they can offer you.
Hello, my name is Sigmond Jenner. Welcome. I am here to talk to you all about acquiring personal loans for emergency expenses. Although everyone should have an emergency fund in a savings account, there are many barriers to achieving that goal. In the meantime, you can look into acquiring a loan to cover emergency expenses that may come up. You should be prepared ahead of time, so you can act fast when unexpected financial expenses arise. I will provide information you can use to prepare yourself for this process. Please come back again anytime to learn more about acquiring loans as needed.