Asset-based lending or ABL is one of the most effective ways for any company to market their growth. This helps the company to get either financial growth or big contracts from clients. Assets such as inventory, invoices, equipment, machinery and other commercial properties are considered assets of any company and can be considered as security for a business loan.
Is ABL the solution?
To sustain a business through difficult times or just to get a huge amount of steady cash flow to fuel the growth of the company, asset-based loans are essential. They also help struggling businesses accelerate their day-to-day cash flows.
When is it needed?
There are times when a company needs working capital for either a large contract or to keep day-to-day cash flow or even to recruit and invest. Some of the main reasons for asset-based lending are-
- Expansion: Either you are looking for national or international expansion of your company, both of them requires a huge amount of capital. Thus by getting an asset-based loan, you can easily expand your business.
- Large Contracts: If your business needs a huge amount of capital to fund a large contract, it is a good time to consider asset-based lending.
- Mergers and acquisitions: If your business is in need of M&A, then consider taking an asset-based loan for the huge amount of capital that you would need.
- Rapid growth: If your company is facing a stagnant growth scale over the months, then to expand it, acquiring an asset-based loan can be an essential way out.
- Turnarounds: Asset-based lending can also help in the turnarounds of your company when a huge amount of cash flow is needed.
Types of assets that a business has.
Every business has mainly two types of assets to get the loan on their behalf. These assets are-
- Tangible assets: This includes inventory, buildings, vehicles, land, and accounts receivable; which are the most common.
- Intangible assets: This category includes investment funding and securities, payment rights, purchase orders, copyrights and trademarks.
Asset-based lending is typically priced according to the amount of loan you are taking, the assets you are willing to give, and their risk factors. Accord Financial Asset-Based Lending is a trusted market leading ABL company that helps you by providing the required loan on behalf of your assets so that you can concentrate on the growth and expansion of your business without any issues.
