West Palm Beach Office Moves to Boynton Beach

by Lisa 30. March 2012 10:20

Our West Palm Beach office is on the move Friday March 30 to larger office space to accomodate their growth, and to become more closely located to the South Florida business community. They have added to staff, and have increased their product offerings which include ledgered asset-based lending, revolving lines of credit managed with borrowing base certificates, and most recently equipment term loans ... and the recourse and non-recourse factoring they have provided for numerous years.

Those of us in Michigan are looking forward to visiting visiting them in their new offices... it's raining cats (and dogs!) here today!

Weathering The Storm: Getting Short Term Working Capital

by Crestmark 28. March 2012 04:15

Even the healthiest of businesses can sometimes experience lean times. When your business is seasonal or just starting, the need for short-term working capital can be even greater. Often banks will require at least three years of operating performance before giving a loan to a startup company or if they do they require the pledge of the personal assets of the principals. In the case of seasonal busineses, the caps placed by banks don’t allow these business to grow inventory as needed to meet demand. In many of these situations, traditional loan-based financing can fall short. It just doesn't offer the flexibility required, and may not be available as quickly, or in the volume you require. However, loans aren't the only option, and in many cases they aren't even the best option. There are many other ways to get working capital.

Asset-Based Lending

Asset-based lending is a strong option for working capital in invoice-based businesses. The idea is simple: you provide an invoice at the time services are rendered, but you may not receive payment on the invoice until a later point. You turn over the full amount of the invoice in exchange for money now, providing an effective bridge for current expenses. There are many uses for this kind of financing, ranging from taking advantage of current opportunities to buy in bulk to using the funds to make payroll. Seasonal businesses often employ asset-based  loans against inventory to build up inventory to meet seasonal demand.


Factoring has similarities to asset based lending, and can be an equally promising source of working capital. In factoring, a third party (known as a "factor") purchases the accounts receivable (or invoice) from the approved company that issued them. Essentially, you sell your unpaid invoices and receive a large percentage of the cash from that invoice immediately; shortly thereafter you will receive the remaining amount (less any managerial fees that were agreed upon in your contract). One of the most important elements of some forms of factoring is that the factor assumes responsibility for the potential of unpaid invoices, and often provides additional services such as credit and collection. This allows the client to focus on what they do best — selling. 

Both asset-based lending and factoring can be good solutions for working capital. Crestmark business development officers can help you understand the nuances that separate them and determine what is best for your business. Feel free to contact us for more information. 

What Is Asset-Based Lending?

by Crestmark 21. March 2012 09:51

Asset-based lending is a form of line of credit, and is sometimes called a revolving line of credit. In essence, asset based lending looks at your company's current assets, and then provides you funds up to a certain amount depending on the value of those assets. Because asset based lending is a line of credit, the the borrower and lender will have an ongoing relationship and  will be in fairly close contact. The borrower should be able to receive more funding as needed, up to the pre-agreed limit. In addition, it may be possible for the borrower to increase their credit limit if additional assets are acquired.

Defining An Asset

Technically, any asset could be considered for asset based lending. In that sense, mortgage loans are a form of asset based lending – but they are rarely referred to as such. In most cases, ABL involves receiving financing against the current assets such as  accounts receivable and inventory. The idea is to obtain financing based on expected money to be paid once invoices come due at a later time. The company receives funds from a lender now and turns over the funds from those invoices once they do become available. Asset based lending can sometimes involve other assets such as machinery and equipment, but accounts receivable is the most popular.

A Highly Reactive Line Of Credit

One of the common characteristics of asset based lending is its ability to increase or decrease as a company's invoices increase or decrease. Because the amount that can be borrowed is determined by the expected value of the asset, i.e. the amount expected from invoices, higher or lower invoices thus lead to higher or lower levels of funding. This is particularly useful to seasonal business, high growth businesses, or companies that have a opportunity to grow. Because asset-based lending is typically more focused on collateral and less on the financial performance of a borrower it also creates opportunity for highly leveraged borrowers or companies in turn around to arrange liquidity.

As with all types of funding, the details of asset-based lending can and do vary between different companies. To learn how Crestmark can help your company, we encourage you to contact us via phone or email for more information.


Acquisition Funding In A Rough Market

by Crestmark 14. March 2012 05:25

When economic times get tough, it's common to see the market panic. This is a natural response, expected by economists and demonstrated time and again in downturns throughout time. The average person – and in many cases the average business leader – holds tight to funds and hesitates on spending. This was clearly demonstrated in the most recent recession. However, shrewd investors may sometimes spy a worthwhile asset to grab at a steep discount during tough times. But how do you fund that kind of action in a tough market?

Look At Current Funding Options

In many cases, a good first step is to evaluate any lines of credit or other sources of funding that your business already has. In some cases, it may be possible to reorganize your current funds to free up additional capital for an acquisition or merger. In addition, taking a look at your current funds will further reinforce your decision to acquire or not. Businesses should never acquire without a thorough analysis of liquidity, especially in a time of financial difficulty.

Explore Additional Capital Sources

If your intended investment is a sound one and your company has additional resources that can be used to leverage further lines of credit safely, you should continue to search for additional lending options. Depending on your situation, Crestmark may be able to help you. To learn more, contact us and ask about our different acquisition funding options.

Remember, no matter how good you perceive an opportunity to be, ensure that your intended financial institution is reputable before you accept financing from them. Unfortunately, many finance companies failed in the last recession as capital markets became restricted. Don't risk your company simply because you believe that the merger is worth it. Research properly and only take loans from companies that have the proper backing, history, and security. 

Business Line Of Credit Basics

by Crestmark 7. March 2012 04:47

A business line of credit is one of the most flexible financing options that a company can obtain. A line of credit is defined as a form of financing that your company can tap into at its discretion. The typical line of credit has a fixed cap, but up to that cap the business is free to withdraw as much as is needed. One common example of a business line of credit is a credit card. The card itself has a limit, but up to that limit the user can charge as much as needed. While a good way to illustrate what a line of credit is, credit cards are merely one of many lines of credit. They may be advantageous for your business, but they're far from the only option. One of the best features of a business line of credit is that since you control the amount you borrow based on your needs, you are able to make borrowing decisions that minimize interest expense.

A Line Of Credit Is Good For Working Capital

Working capital is inherently fluid. The amount required can change from month to month, which means a flexible financing source is often an advantage. In a typical setup, Crestmark clients have daily and weekly access to their funding, which allows it to be utilized on an as-needed basis. The exact amount available will depend on a number of variables, including company revenue, assets, invoices sent to customers, company performance, and credit. The requirements and available funds are determined by the type of financing you obtain.

Asset-Based Lending

Crestmark offers a business line of credit through asset-based lending. Asset-based lending is unique because it can be offered in such a wide variety of situations. There are many different elements of a business that can be considered assets for this purpose, including accounts receivable, inventory, and machinery/equipment. Through asset-based lending, Crestmark can often offer a business line of credit to a business in situations where funding may have otherwise been difficult to obtain.

If your business needs flexible working capital to increase cash flow, a business line of credit might be a good option. Crestmark may be able to assist you with your credit needs. Contact us to learn more. 

Facebook LinkedIn

© 2009 Crestmark Bank ® All rights reserved.    | Community Reinvestment Notice | Privacy | Legal | Member FDIC