Asset loan is a specialized method of providing structured working capital and term loans that are secured by accounts receivable, inventory, machinery, equipment, and/or real estate. An asset loan involves using existing assets in a company to obtain a loan from a financial institution. A business does not give up ownership of the asset, but instead uses it as a type of collateral. Only when a business does not make payments on the loan does the financial institution have the right to seize that asset. It is very important to make all payments on time.
Why use an asset loan for funding?
- Unlock vast sums of cash that has been invested in the business infrastructure
- Take advantage of sales growth immediately
- Access a revolving credit line secured by inventory, including raw materials and finished goods
- Term loans are available against your commercial real estate and equipment without sacrificing ownership
- Maintain a greater level of flexibility than traditional bank financing
This type of funding is perfect for:
- Refinancing existing loans
- Turnaround finance
- Growth financing
- Acquisitions and mergers
- Management buy outs & buy ins