Is Asset-Based Lending the Right Type of Financing for Your Business?

Asset-based lending has joined the mainstream as a source of financing for small and medium-sized businesses. Find out why it may be the most appropriate source of financing for you.

Despite the economic recovery, securing expansive financing still remains challenging for many smaller businesses. According to a report published by the National Small Business Association, nearly a third of small businesses are without the capital they need. This is preventing these companies from growing their business or expanding operations (33%), financing increased sales (17%), and increasing inventory to meet demand (12%).

Unlocking the Value of Your Assets

Many smaller businesses are unaware of the sheer extent to which they can leverage their business assets and cash flow to secure funding. There is a well-developed market for providing working capital for small businesses with assets, including accounts receivable, inventory, purchase orders, real estate, machinery and equipment, and even intellectual property. This type of financing is called asset-based lending, or ABL.

Pie ChartSome Benefits of Asset-Based Loans

When there are opportunities for growth, unlocking the inherent value of your assets, especially intangible assets, is attractive. Today, ABL is a fundamental financing solution serving a wide range of industries and offering many advantages:

  • ABL is affordable and offers flexible loan structures.
  • Asset-based lenders focus on collateral, rather than credit-worthiness, and therefore offer an alternative to traditional bank financing.
  • Asset-based loans are priced competitively with cash-flow loans.
  • Such loans come with fewer financial covenants than bank loans.
  • Asset-based loans close at least 30% faster than other financing methods

Getting the Financing You Need

US Capital Partners has a proven and well-developed capability for providing working capital and growth capital for small to lower middle market businesses. The firm can provide financing for almost any company with assets and understands the importance of closing quickly.

“We have continued to turn to US Capital Partners to assist us in financing our working capital needs because of their breadth of experience in asset-based lending,” said Colleen Gray, CEO at Consensus Orthopedics, a leading designer and manufacturer of high-quality reconstructive total joint implants. “US Capital Partners has successfully structured and financed credit facilities on our behalf that increase our capital availability while decreasing our cost of capital.”

Jeffrey Sweeney