Asset Based Loans
6 - 36 Months
Asset based loans allows for businesses to access a pre-determined amount of working capital through a secured loan. This type of loans are backed by the asset or assets the business applying has. A lender uses the asset or assets as collateral until the loan has been repaid. Lenders tend to have competitive interest rates when issuing asset based loans, as they are considered less risky compared to other secured or unsecured loans.
Lenders determine a set market value for the asset or assets used as collateral. From there lenders offer a pre-determined loan amount, based upon the collateral total value. Lenders tend to focus the value of the business' assets, by using the accounts receivable. In that case lenders then move on to other business assets such as inventory, machinery, equipment, real estate, or other intellectual tangible property.
Asset Based Loan Topics:
ALL ABOUT ASSET BASED LOANS
What Is an Asset Based Loan?
Businesses benefit from this type of loan as it allows a business to leverage their cash flow. When businesses face a drop in sales, cash flow drops as well, meaning that it makes it harder for businesses to get loan approvals. With an asset based loan, lenders tend to view these loans as less risky, since it is backed by your business's assets. Asset based loans help during hard situations or environments where lenders could perceive the business to be below the guidelines, yet have a rich asset balance sheet.
Businesses can use asset based loans to cover any overhead expense, payroll, inventory, rent, or expansion. Businesses who commonly use these types of small business loans are as follows, but are not limited to:
THE STEER PROMISE
Helping Small Businesses Grow Across The U.S.
At Steer Financial, we understand that no two businesses are alike. We offer financing solutions as unique as the business owners we help. Together, we can help steer your business to its full potential. Step one is determining which type of financing is ideal for your business. We work hard to deliver honest, reliable, and transparent customer service so you can feel confidence choosing us to help you meet your business capital needs.
Serving All 50 States
By leveraging our network of 45+ partner lenders, we can offer tailored solutions to businesses across the U.S. regardless of their size or industry.
Secure + Safe Data
We strive to keep all of your information secure and private. We assign a funding specialist to guide you along the entire process.
10+ Years of Experience
Our expertise has enabled us to understand small businesses and offer the highest level of service to you and your business.
HOW IT WORKS
How Does an Asset Based Loan Work?
Every asset based loan may vary from industry to industry, and asset to asset. No business is the same, so lenders do tend to take different approaches in making sure that the value of assets are considered in order to present a business with a loan amount. Our partnered asset based lenders will asses and value the current assets owned by a small business to determine how much a business may borrow. Appraisers and site visit inspections may be conducted to create reports to show lenders the true market value.
Asset Based Loan Alternatives
Working Capital Loan
The major difference from an asset based loan amongst other types of business loans is that a business's cash flow is not necessarily the most important thing for lenders to approve the business for a loan. For instance a business with uneven cash flow with strong assets that may include equipment, accounts receivables, or proprietary tangible assets may still qualify for this type of loan.
These loans are easier to obtain than other types of loans, as lenders view the business assets as collateral. The collateral allows a business to lock in a secure loan for their business easier and faster than a business line of credit or invoice factoring. Interest rates are cheaper than other loan products as well. Keep in mind that not all business assets may be used as collateral. Also the collateral or business assets are owned by the lender until the loan is paid back in full under the predetermined time frame and amount.
What Are the Benefits of an Asset Based Loan?
The worth of a company's assets can be used to determine the amount of money that it can borrow through asset-based loans, which are a kind of financing. The following is a list of the four advantages of asset based loans:
Access to larger amounts of capital
Because they are based on the value of the firm's assets, asset-based loans can give businesses with access to higher sums of cash than standard loans do. This is because asset-based loans are valued according to the assets owned by the company. This may be especially helpful for companies that require a substantial amount of funds to support their expansion, acquisitions, or other projects.
Flexible repayment terms
Terms of repayment that are flexible Asset-based loans typically allow greater leeway in terms of repayment than do regular loans. For instance, they may provide lengthier payback intervals or the option to make interest-only payments for a set amount of time over the term of the loan. Businesses that have erratic cash flow or fluctuating revenue cycles due to the changing seasons may benefit from this.
Increase cash flow
Asset-based loans can assist businesses in increasing their cash flow by supplying them with the funds they need to acquire merchandise, pay suppliers, or cover other expenditures. This can help firms increase their cash flow. Because of this, firms may be able to improve the efficiency with which they manage their cash flow and minimize cash flow problems, which may otherwise result in monetary challenges.
Asset-based loans are a form of collateral-based financing, which simply implies that the borrower's assets are put up as security in order to receive the loan funds. Businesses who have trouble receiving traditional loans due to a lack of collateral or a bad credit history may find that asset-based loans are easier to obtain as a result of this change in the lending landscape.
WHO SHOULD APPLY
Who Should Get an Asset Based Loan?
Although asset based loans may be a helpful source of funding for a variety of different kinds of small businesses, they are particularly well-suited for businesses that have considerable assets but may have difficulties obtaining traditional financing.
For instance, small businesses that are just beginning their operations or that have a credit history that is less than stellar may have a difficult time being accepted for traditional loans. In situations like these, an asset-based loan may be a useful source of financing that can be put toward funding operating expenses, expansion, or making equipment purchases.
At Steer Financial, we work hand in hand with you and our financing partners to help your small business secure the financing you may need regardless of the industry you are in.
Loans and finance for construction
Invest in the necessary tools, materials, or hire additional employees.
Loans and finance options for medical practices
Rent a larger office space, invest and upgrade your equipment, or train staff.
Loans and finance for commercial transportation and logistics
Increase the size of your fleet or take care of maintenance upkeep.
Loans and funding for landscaping or snow plowing services
Keep your business capital during the slower seasons or hire employees when in-season.
What Can an Asset Based Loan Be Used For?
An asset based loan can be used for a variety of purposes. For small businesses, asset based loans can provide funding for short-term working capital needs such as payroll, rent, and supplies. They can also be used to purchase inventory or equipment, which can help increase production capacity and improve efficiency. Asset based loans are especially helpful for small businesses with a lot of assets but perhaps weak credit history or cash flow. When traditional bank loans are unavailable or have too many restrictions, these loans can assist in obtaining funding.
Asset based loans can also be used to fund growth opportunities such as acquisitions, mergers, or expansions. By using assets such as accounts receivable or inventory as collateral, businesses can secure the financing needed to pursue these opportunities.
In addition, asset-based loans can be used to refinance existing debt, providing businesses with more favorable repayment terms or freeing up cash flow. Overall, asset-based loans can provide businesses with the flexibility and funding needed to pursue their goals and grow.
How To Qualify and Get an Asset Based Loan
At Steer Financial, we will work closely with formulating a plan for your business. We will assess your business with our partnered lenders to evaluate the strengths and assets your business has to decide on the loan's size and conditions. Strong financial statements and a high credit score might also increase your chances of being approved. To make sure an asset based loan is a realistic choice for your business, our funding specialist will walk you through the entire process from start to finish. Below is a quick overview of the minimum requirements in order to get an approval:
Time In Business
At least 6 months in business.
At least $10,000 per month in deposits.
Minimum of 650+ personal credit score.
1 year free from any open bankruptcies
HOW TO APPLY
Three Easy Steps to Secure an Asset Based Loan
We have partnered with over 45+ lenders to ensure that we match your business with the best lender and the most competitive rates. We work quickly to provide an approval in as soon as a few hours.
By utilizing our streamlined fast funding approach, your business can access the necessary capital in as little as 24 hours from the moment you approve the terms, ensuring a timely and efficient process.