What is asset based lending? – It is the act of receiving online business loans by using your current business assets as collateral for the loan itself.
If businesses are using asset based lending as a financial solution, it could indicate that businesses in the U.S. are growing. The logic is that the business must have assets to use as collateral to receive the loan and if a business owns enough assets to receive loans, then they are inherently growing.
Jeremy Harrison, Senior VP & Regional Growth Head at Bank of America comment on the growing trend of asset based lending in Europe and its slow and steady rise in the U.S. at the Receivables Finance International convention in March.
Harrison said that he believes that it’s taking Americans longer to utilize this lending option because there is still not enough awareness of the option itself.
Even though some businesses are not taking advantage of asset based lending when considering online business loans, the fact that so many are in a position to receive these loans would be a great indicator that businesses in the U.S. are growing.
The next step is to ask whether or not your business can benefit from these loans. Manufacturing, distribution and service oriented companies benefit from asset based lending because they are in a position to take full advantage of the loan structure.
The most assets on hand the higher the loan and because these industries often experience seasonal cash flow, this type of lending can create a much needed bridge between high yielding seasons.