What is Asset Based Lending?

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Asset BasedLending generally refers to a business putting up assets as collateral for a "nocredit check business loan."  The actualwords can be used in several different categories, but the most popularcategory is “accounts receivable funding” “invoice lines of credit” “ar funding”and factoring.

These areall words which explains a transaction, where a Lender provides a company immediateworking capital in exchange for their current invoices, making the transaction an “assetbased loan”
In Europethis type of transaction is extremely popular and in America the popularity ofFactoring is growing each day because of the benefits which AccountsReceivable Funding provides.
The firstbenefit includes no financial or credit check on the companywho is seeking immediate working capital. The credit worthiness of the company’s client is what is important tothe Lender.
The secondbenefit is, the Lender charges a fee based on the credit worthiness of theclient, the amount of the Invoices, and the type of industry the company isin.  This fee is usually between 1.5%, to3.5% of the total Invoice amount, and is 100% tax deductible as a businessexpense.
The thirdbenefit is the time it takes to fund.  Someof the larger companies can fund within 48 hours and less if you establish aFactoring relationship with the Lender “before” you actually need the workingcapital.  Lenders who fund GovernmentInvoices can take up to 4 weeks to fund. The US Government does allow and encourages factoring for Governmentvendors, however to establish the transaction, sometimes it takes a littlelonger.
Staffingagencies, manufacturing companies, suppliers, distributors, medical invoices,commercial construction and a great number of other types of business canbenefit from Factoring and asset based lending transactions.
The fourthmajor benefit concerns the added task some Factoring companies perform fortheir clients.  Collections and accountsreceivable task, as well as running credit checks on your clients, prior to yourinvolvement.  Consultation on how towrite up the agreement with your client and details on how to protect yourbusiness is all a part of the service when you choose the right Lender.
The cheapestAccounts Receivable Lender may not be the best Lender.  And the largest Lenders often times is notthe best Lender for certain industries. 

Whatwe do is funding placement, based on location, amount of invoices (up to $10Million) and type of business you are in. Visit us at Factoring/Accounts Receivable Funding Placement,  andcomplete a six (6) question application.  Wecan find you a Lender within 24 hours.