How Growing Businesses in Vancouver Can Benefit from Asset-Based Lending

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Businesses can borrow money by using collateral in the form of inventory, real estate, equipment, accounts receivable, or other business-based assets. This type of lending is typically beneficial for businesses that are not eligible for traditional bank loans.

For businesses growing quickly, asset-based financing is a lucrative option. This guide will discuss how.

Reasons to Consider Asset-Based Lending

Asset-based lending benefits businesses in multiple ways, especially those looking to expand. For instance, access to capital in this type of financing offers additional funding. Moreover, it offers more flexibility than traditional financing by tailoring terms according to your needs. This allows businesses to use their funds as they desire, whether it's for equipment purchases or working capital inventory.

If your business aims to improve its cash flow, asset-based financing will provide you with access to funds required to pay invoices and expenses. This will help prevent late payment charges while maintaining a good cash flow.

Benefits for Businesses

If your business borrows money through asset-based lending, you can quickly repay it with the help of the assets you own. Consequently, the need to borrow money from financiers will be reduced. These financiers are often interested in taking a risk with your money.

Moreover, through asset-based financing, businesses can borrow any amount of money as long as they can prove their ability to maintain and utilize the cash flow generated by their assets. This provides businesses with greater borrowing flexibility as well as the potential ability to withstand fluctuations when it comes to interest rates and commercial terms.

Types of Assets Used

With asset-based financing, businesses can replace debt financing in the market as the repayment plan it offers borrowers is more flexible. This also gives businesses increased exposure to the financial market.

Asset-based financing is categorized into non-revolving and revolving financing. A revolving loan requires regular payments based on agreed rates. On the other hand, non-revolving asset-based loans are paid monthly.

The risk associated with both types differentiates between them. A revolving loan comes with a higher level of risk because of its complexity, while a non-revolving loan offers a lower risk level. 

Loan application

 

Get Asset-Based Lending in Vancouver at Global Capital Partners Fund

Based in NYC, Global Capital Partners Fund is a reputable private commercial lender that offers hard money loans and an extensive range of financings such as asset-based lending, mezzanine financing, and bridge loans to investors.

The company has been operating in the commercial lending industry for over 30 years, offering suitable financing solutions at flexible terms. To find out more about their services, visit their website.

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