IS AN ASSET BASED-LOAN RIGHT FOR YOUR BUSINESS
WHAT YOU NEED TO KNOW ABOUT ASSET-BASED LENDING
Any business owner knows that the pursuit of profitable growth depends on the availability of a reliable source of working capital, maybe your business is too big for it’s checking account or it is time for a loan for more financing.
If you are experiencing rapid sales growth and you need additional liquidity to fund that growth, then asset-based loans can be an optimal source of financing and it might be time for a business checking checkup! Here is what you need to know about asset-based lending.
WHAT IS ASSET-BASED LENDING?
Asset-based lending uses your commercial account receivables and inventory as collateral for a borrowing base. It’s a widely accepted business finance tool used by commercial businesses of all sizes. Once the bank confirms your asset, you can secure a loan for your business. The security of an asset affirms to the bank that you are a reliable business person who is not a lending risk.
Asset-based loans differ from traditional cash flow-based loans in that the quality of the underlying collateral takes precedence over the historical profitability of the business. If you don’t have assets to base your loan on, you might choose to instead apply for a more traditional type of loan.
GETTING STARTED WITH RENASANT BANK
To get started, your bank will need some basic details about your business, as well as financial and collateral information. However, no two asset-based loans are structured alike, so the experts at Renasant Bank strive to understand your business model to put together a working capital financing package that fits your business.