Asset based loans are loans that use receivables or inventory as collateral to secure financing. Asset based lenders will advance funds typically as a percentage of the collateralized asset’s value. This type of loan is ideal for a business that has a lot of inventory, accounts receivable, or equipment, but needs the funds to grow the business or get through a cash flow crisis.
Term: 5-15 years
Interest Rate: 6-12%
Interest Rate Mode: fixed
LTV: 25-85%
Prepayment Penalty: No
Fees: 0.2-1% monthly management fee plus 2-3% on credit line facility amount
Time to funding: 1 week to 2 months
Loan size: $250,000+
Approved uses: Open