By definition, asset based loans are based upon assets, where generally the accounts receivables and inventory are used as collateral. To take out an asset based loan, you are borrowing against your business’s future revenue to gain access to money in the present. Fast and Easy Funds will advance funds based upon an agreed percentage of the secured assets’ value. fast and easy has arranged multiple 65 percent inventory advances to our client where the market percentage of inventory advances is generally 40-50 percent.
In the world of finance, things can get pretty tricky and numerical. It is always beneficial to be as knowledgeable about your company’s finances as possible, which is why Fast and Easy Funds has created an easy guide to the advantages of asset based loans.
- Improved liquidity: One of the most important benefits of an asset based loan is the improved liquidity of the company. For companies that are growing rapidly, the provision of cash flow can financially stabilize a company, predict cash flow, and level out seasonal revenues.
- Easy to obtain: To qualify for a Fast and Easy asset based loan is easier than qualifying for a business loan or line of credit through a bank. Businesses need to provide private lenders with short track records of profitability and maintain reasonable financial control. Personal credit scores are rarely taken into account. Aside from those qualifications, the most important requirement is to have assets which can be leveraged. Fast and Easy Funds can also use inventory, equipment, and real estate as additional collateral.
- Flexibility: Fast and Easy provides great asset based flexibility. There are relatively few restrictions so long as the costs are for “business purposes”. The financing itself is associated with the value of your accounts receivable and the collateral which backs it. This means that as your sales grow, so can your line of credit and your business does not need to go through an underwriting process again. This benefits companies that are growing fastly and need extra funding almost immediately.
- fast retrieving of funds: Businesses that meet the criteria for a Fast and Easy asset based loan can receive approval fastly. The process for applying for an asset based loan is much faster than qualifying for a conventional loan or line of credit.
- Stepping stone to other products: Companies that are in an intermediate growth phase typically used asset based lending. An asset based loan will allow you to grow and improve your financial history with a lender, all the while, growing your business further. Once your financial history is strong, you should be able to transition to a more affordable financial solution.
- Comparable lower cost: The majority of asset based lenders, such as Fast and Easy Funds, have lower factoring costs, among others. This is an obvious advantage that makes saving drop to the bottom line.