Services

Asset Based Lending

Several Types of of asset based loans are available

Accounts Financing - loan where the lender substantially controls the borrowers accounts as collateral

Floating Lien Financing - advances typically made on a monthly period. Also reconciled monthly

Off-Balance Sheet Financing - similar to factoring except accounts are referred to as purchased

Asset-based loans typically use product inventories and account receivables as primary loan collateral. They are very similar in many ways to account receivable factoring.

Asset based factoring arrangements are always structured similar to loans.

They differ from invoice factoring as they do not result in the sale of your accounts receivables.

Factoring Advantage has developed relationships with many of the nations largest asset-based lenders

We act primarily as consultants to assist your small or mid-sized business with its finance asset based lending needs.We are not involved in securities based lending.

Factoring Advantage can often provide your small or mid-sized business with temporary financing business loan.

This is utilized to bridge the gap when companies change lenders or experience periods of intensive capital needs.

Criteria to qualify for asset based finance or to acquire business lines of credit differ substantially from those needed for invoice factoring.

Our asset based lenders require
the following criteria to establish
asset based loans:

• Have established and developed credit with hardly any derogatory incidences.
• Require a minimum level of capital - $500,000
• Sufficient collateral coverage of at least a 2-1 ratio
• Demonstrated three year period of profitability
• Require audited financial statements.

Asset based lenders typically require blanket liens on all of the businesses collateral in addition to the personal guarantees of the principals. This can present difficulty in obtaining additional financing of buildings, real estate and equipment.

Factoring companies only require the accounts of the business as collateral allowing the business to finance plant, equipment and inventories separately from the invoices.

Requirements of personal guarantees are desired by factoring companies and are not critical to structuring the deal. Usually the factor performs due diligence on an invoice by invoice basis along with any required verifications.

Factoring companies are also more likely to work with tax liens, judgments and the IRS and often comfortably finance a company operating in bankruptcy.

Many small and mid-sized businesses secure asset based lending or a business commercial loan with the assistance of the SBA - United States Small Business Administration

It is recommended that the SBA be contacted either by phone or through their government website.