Asset-Based Loans

Following are the most common required documents:
• Profit & Loss Statement
• Business Tax Returns
• Aging Report
• Balance Sheet
• Inventory Report
• Business Tax Returns
• Business Bank Statements

With this type of lending, an asset-based lender offers small business owners an advance of capital on the market value of their secured assets. The loan amount often depends on the type of asset you’re using as collateral. For example, you can usually secure a 50% loan amount of your equipment and inventory as these assets can’t be easily liquidated and their values often decrease over time. Meanwhile, there are chances of borrowing 80% to 90% of the value of your accounts receivables since their values won’t change with time.

Any fixed assets can be used to secure an asset-based loan. This collateral could be in the form of real estate, equipment, inventory, company vehicle or even accounts receivable.

Asset-based lending & factoring are sometimes confused as the same. The major difference is that you sell your assets to a lender in factoring while you borrow against them in asset-based lending. Factoring can only use account receivables as collateral while it extends to other assets like real estate, machinery, equipment, and raw materials in asset-based loans.

Asset-based might be a great financing solution for all the companies that are experiencing seasonal lulls, seeking additional funds, or have an inconsistent marginal cash flow. From government services to manufacturing companies, food & retail, real estate, technology, transportation & logistics, distribution, and many more, there is a plethora of companies that are good candidates for asset-based loans.

Asset-based loans can provide numerous cash flow and working capital solutions for small and medium-sized businesses. If you’ve been facing difficulty getting approved for a business loan from traditional lenders, an asset-based loan can be a lifesaver for you. It’s easy, quick, and provides funds for a variety of business purposes. Since these loans primarily use specific assets as collateral, they’ll typically pose fewer documentations and paperwork. Moreover, since asset-based loans are less concerned with your personal or business credit scores, revenue, or past cash flow – they might be a great financing option for aspiring entrepreneurs and small business owners with poor credit.

Applying for an asset-based loan with Smansha is a quick and easy process! Sign up at Smansha and apply for financing at our innovative lending platform in few minutes. Once approved, you will receive funds in 4-7 business days.