It is undeniable that asset-based loans are more flexible compared to most other financing options. So next time you need working capital for your business, this option should be open to consider. If you don’t have fixed assets as collateral, this option is a quick and easy way to make money. Likewise, you can always treat your inventory as collateral if stocks are already high. Finally, this option is likely to come in handy if your growth has put pressure on your resources.
However, with asset-based loans, you have two different options. First, you can use your bills as collateral and include them in a down payment. It’s worth noting that if you can find one of the best factoring companies, you can potentially get up to 85% of the amount upfront. Second, your inventory can serve that purpose and help you obtain an asset-based loan. However, the second option may not always work in your favor, especially if you have outdated inventory or are still being worked on.
Of course, there are several financing solutions that you can choose from to alleviate your financing problems. For example, you could think about how to apply for a loan or borrow money from a lender. However, if you have recently entered the industry, your application may not be approved. In fact, your credit rating can also affect the destination of your application. In such a situation, you can still wait for approval or play it safe by attaching your invoices before it’s too late.
Invoice factoring is one of the most popular financing solutions that you can use to easily increase your cash flow. First, you may not have to worry about your credit rating at all, especially if the factoring company has no interest in knowing your score. Second, when you apply for a loan, you can expect a payout in a matter of weeks. Rather, factoring can help you get the results you want in a day or two. Last but not least, a bank is unlikely to give a startup a loan. But even if you are just starting out, you can always rely on factoring.
In many cases, it is also possible to guarantee ABLs which represent up to 50% of the value of the finished products and guarantee 30% financing in each raw material. There is also the option of obtaining cash flow financing loans to further expand financing; make the total increase from tens of thousands to millions of pounds.
Are Asset Based Loans Right For You?
In general, companies are ideal for ABL who sell their products or offer their services to other companies through loan agreements that can limit cash flow. Asset-based loans can guarantee such facilities for organizations that have high inventory levels and need to purchase raw materials.
It is also possible to urgently find the salary and supplier honor facilities necessary to maintain market position and industry exposure. It is always best to choose a broker who offers a free consultation to discuss available options and secure bespoke structures.
The best step to grow; the best step for sustainability
This asset financing enables companies to optimize their assets, be it through growth and acquisition plans or through refinancing and restructuring. In contrast to loans or other forms of financing, control lies with the individual company and its management so that the right decisions can be made at the right time and by the right people.
By working with a professional broker, companies can benefit from the experience they have gained in the asset-based loan industry. These teams are experts in ensuring invoice factoring and reimbursement services and can also provide professional, personal and knowledgeable service to provide business finance solutions tailored to individual business needs.