What is Asset Based Lending?

by Michelle 21. May 2009 04:40

This is a very common question, and one that I am asked on a daily basis. 

To a business owner an asset can be many things.  It can be; real estate, equipment, inventory, personal holdings, equity, or accounts receivable.  To further muddy the waters different lending institutions often take various parts of the above assets and classify the line as an “asset based line.”  This is because as a lender any of these aspects of a business can be considered valuable collateral for a line of credit depending upon what type of underwriting standards that lender employs.

Now, knowing what the collateral can be I’m sure your question becomes; what does Crestmark Capital consider an asset for an Asset Based Line of Credit?  It’s really very simple. 

When you call and speak with us about an Asset Based Line of Credit; or ABL as it is generally known; you and I are going to be discussing your business’ accounts receivable and inventory.  Our ABL lines can be secured by your accounts receivable and inventory. Or if your business is one that does not have any inventory, such as; a staffing company or any service related company, we can also structure an ABL line just on accounts receivable.  This is often seen as one of the positive points of an ABL line as it leaves other assets of your business unsecured.  So, if you need to get an equipment loan or refinance real estate you can.

There are many benefits to an ABL line.  If you would like to talk about how this might work for your business, visit our homepage www.crestmarkcapital; to e-mail or call us.

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