What Is an Asset-Based Financing Line of Credit?
Businesses need a reliable source of working capital for continued success. Not every business can keep falling back on traditional loans, and it’s wise to avoid debt whenever possible. So how do businesses find a renewable source of working capital without going into debt, and with the added benefit of growth potential? The answer is asset-based financing lines of credit.
How Asset-Based Lines of Credit Work
Every business owns assets in one form or another. In the case of asset-based lines of credit, the focus is primarily on property, equipment, vehicles, inventory, and receivables. Those assets have an inherent value. Asset-based financing taps into the value of those things to create a revolving business line of credit. Much like other revolving lines of credit, an asset-based line of credit can be used for anything your business needs, and once the balance is repaid, the financing is replenished and ready to use again. Because an asset-based line of credit is structured around items that physically exist and are owned by the business, there is no debt involved and business owners get to preserve their credit ratings.
Financing with Growth Potential
Asset-based financing is also one of the only business funding solutions to promote growth. As your business acquires new or additional equipment, purchases larger facilities, expands inventory, or experiences increased sales, the amount of capital available through the asset-based line of credit will also increase. This gives businesses an edge without being burdened by debt from traditional loans.
Who Uses Asset-Based Financing?
As mentioned above, almost every type of business can access asset-based lines of credit, even if they are just using the value of their receivables. Asset-based financing is ideal for new businesses that need extra capital but may not be able to secure traditional loans. Growing businesses use asset-based lines of credit to cover expenses as they reach their next milestone, especially if more assets are being acquired through a merger or buyout. Larger businesses maintain asset-based lines of credit to keep up momentum without relying on loans or draining capital reserves for expenses.
CounselPro Lending specializes in asset-based financing lines of credit for businesses of all shapes and sizes. We will perform an in-depth analysis of your assets to unlock the hidden value that traditional lending channels frequently overlook. Contact CounselPro Lending today and get a secure, renewable, and reliable source of capital with our asset-based financing program.