5 Key Reasons to Pursue Asset-Based Lending
In the sea of small business loan options, it can seem daunting to find the perfect solution for your unique situation. Although small business loans and lines of credit sound promising, many of these financing options require you to have a high credit score and a strong financial statement. Whether your small business is too small to have a substantial credit score, or you’ve seen hard times and don’t have a high enough score to obtain the loan you need, consider these five reasons to pursue an asset-based loan.
No Credit, No Problem
There’s many reasons your credit score could be lower than you want. Many small businesses struggle in the initial few months to obtain a credit score at all. One unexpected financial hardship can cause your score to plummet. The vicious cycle of low credit and no loans can cause your small business to struggle even more. Asset-based lending uses your inventory, machinery, property or other item as collateral. You’ll typically receive funding without a credit check at all.
Keep Up the Cash Flow
Even if you have excellent credit, sometimes you need cash fast. When business is booming, it’s hard to keep up with rapid growth. Extra working capital can be exactly the boost you need to overcome any business growing pains. An asset-based loan is usually faster than a business loan and can give you the cash you need to stay on top of accelerated growth.
Leverage Your Assets
Whether your machinery and inventory is being used or not, asset-based lending can be a great way to leverage your assets for even more value. There’s a small chance that you’ll lose your assets if you can’t make payments, but consistent payments will keep your money and your machinery in your possession and working for you.
Less Risk, More Reward
Although you’re accepting the risk that you might lose your asset, this type of lending doesn’t risk any personal finances. Even if you don’t make your payments, you typically won’t have any risk to any other finances or assets.
Fast, Flexible Funds
With the absence of lengthy applications and credit checks, asset-based lending is the perfect solution for fast funding. It’s typically paid in cash, so you have the flexible funds you need to deal with a variety of investment opportunities or a cash flow crisis. Consider how you can make your assets work harder for you with a flexible, convenient asset-backed loan by a reputable provider.