Asset Based Lines Of Credit For Newbies

Getting access to credit is essential for new and small businesses to thrive. However, going through traditional channels, such as banks, can often yield disappointing results. Most banks have high requirements for businesses requesting lines of credit, and those who cannot meet said requirements frequently stagnate while they slowly build up their credit ratings for introductory lines. Fortunately, there is a method of getting credit which does not rely solely on existing ratings. In fact, many entrepreneurs are starting to use asset based lines of credit to create an extra source of capital for their businesses.

How Asset Based Lines Of Credit Work

Asset based lines of credit are structured around property owned by a business. For this type of financing, assets are defined as equipment, real estate, inventory, receivables, and other items which belong to the business. It should be noted that leased equipment and rented property do not fall under the category of “assets.” The value of the owned property is used create a revolving line of credit, which can be drawn from as the business needs it, rather than having to take everything all at once (as with bank loans). Asset based lines of credit give businesses a great internal source of capital, which gives entrepreneurs the extra purchasing power they need to grow.

How Asset Based Lines Of Credit Differ From Bank Loans

Asset based lines of credit differ greatly from traditional bank loans in many ways. First, asset based credit is much more easily accessible than traditional bank loans, which require a long history of financial and very high credit ratings. Second, asset based credit does not place any debt on the balance sheets. Because this form of financing is a revolving line of credit, rather than a loan, businesses repay what they spend, rather than having to take on debt in one lump sum. Finally, asset based lines of credit grow with the company. As a business acquires new equipment and makes more sales, the new value of the assets can be reconfigured so that the spending limit on the line of credit is higher. As the business flourishes, so does the line of credit.

Get Started Now

If your business could use an extra source of capital, or you would like a revolving line of credit for your company, but traditional channels are not in the picture, call CousnelPro Lending at 1-888-292-3322. We will work with you to get your business the credit it deserves for continued success.


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