Though running a business can be rewarding in many ways, it can also be just as taxing. You never know when a sudden surprise will cause major setbacks. Thankfully, you can always formulate a plan for just such a situation. Thinking ahead and looking at your financing options, for example, is a great way to beat any potential cash flow troubles that come along. Though traditional loans might be your first thought, there are actually times when alternatives are more beneficial. Review this information to see how asset-based lending might help you.
The Trouble With Traditional Loans
Before diving into the details of the service, you may be curious why traditional bank loans aren’t always the best choice for your business. For one, many loans from larger lenders are based on the credit rating of the borrower. If you can’t guarantee a great score, then you could be denied on the loan application. Additionally, the terms and interest rates attached with these services may not be the best. This is where alternatives like ABL come into play.
How ABL Works
Essentially, asset-based lending is a financing service that includes any type of loan or line of credit based around collateral. Instead of reviewing factors like credit to determine eligibility, the lender will look at the perceived value of an asset. This makes it easier for business owners to gain access to the funds that they need. Additionally, this type of funding can be used for very specific purposes. There are a handful of key advantages that come along with using ABL services to keep your business in good financial standing.
Get What You Need
Some investments you will need to make as a business owner are going to be expensive. When a piece of your equipment breaks and you need to replace it, the costs of getting a new model might be more than you can afford. However, ABL services like equipment financing allow you the chance to use the value of the machinery to cover the costs of the loan. You get the equipment you need and don’t have to take unnecessary debt to reach your goals.
The beauty of using asset-based lending services is that you will be able to gain access to the money you need without having to go through a ton of red tape. To learn more about asset-based lending, contact the team at WHW Capital today.