What Companies Can Benefit Most From Asset-Based Lending?

Asset-based lending is fast becoming a modern solution for cash flow issues in business. It’s more flexible and easier to apply for than traditional loans, and you get the money more quickly. This type of lending includes cash advances, long-term financing and alternative funding for business needs.

How can you tell if this option is right for your business? Learn more about the businesses that are currently benefitting the most from ABL funding.

Mid-Sized Businesses With Cash Flow Issues

One of the main reasons to turn to asset-based lending is because your business has cash flow issues. This doesn’t mean your company isn’t healthy. Even the best-run businesses can run into cash flow problems because of unexpected situations or clients that are taking too long to pay invoices.

There are several types of ABL funding that can help, including invoice factoring and merchant cash advances. With invoice factoring, you get a cash advance on invoices instead of waiting the normal 30, 60 or 90 days to get paid. This option is simple to understand and easy to use.

Businesses That Need Equipment

Another popular way to get ABL financing to work in your favor is with an equipment loan. Unlike other types of loans, equipment financing uses the equipment you want to get as collateral. So, this is technically using an asset, but you don’t actually need outside collateral.

You can qualify for the equipment you want with great interest rates, long repayment terms, and large funding amounts. The amount of money you need for a down payment varies according to your credit score, but you definitely don’t need perfect credit.

Companies Looking To Buy Real Estate

ABL lending can cover some pretty huge purchases, including real estate. With a stated-income loan, the property you want to purchase acts as collateral for the loan. This is like equipment financing, involving an asset but not outside collateral. This makes it easier for businesses to get comfortable terms, especially if they’ve been turned down for other options.

Companies With a High Volume of Invoices

Healthcare businesses, resellers, distributors and manufacturers often have hundreds or thousands of invoices every month. Why wait for all of your customers to pay to get ahold of the money you need for business growth? With asset-based lending, you can turn as many of those invoices as you want into immediate capital. This helps you take advantage of opportunities and adapt to business emergencies.