Asset-based loan (ABL) is the business financing option, constructed with lines of credit, allows companies to borrow the capital against their assets such as real estate, inventory, account receivable, equipment or machinery, to pay their business expenditures and capital expenditures.
In general, not all assets can be qualified for collateral, most lenders consider assets with high value and low depreciation rate, and those can be converted into cash. Thus, company can borrow capital up to 85% against their AR (Account Receivable) and 50% for their equipment or machinery. The annual interest rate for ABL is ranging from 7%-17% that based on the loan amount, collateral types, and the risks.
- Loan Amount: $500,000 – $7,500,000
- Annual Interest Rates: 12% – 18%
- Terms: 6 – 24 Months
- Payments: Monthly
- Loan Structure: Term or Lines Of Credit
- Maximum Funding 2 weeks
- Not Using FICO
- Funding Against Inventory, Machine, or Equipment
Cash flow loan is another type of business financing arrangement, allows companies to borrow capital from the lender to cover their working capital, which generates future cash flow for the company, and counted as company’s collateral for the loan. In this arrangement, the lender uses EBITDA (Earning Before Interest, Tax, Depreciation, Amortization) as a snapshot to measure company business performance and to control the company cash flow. The high EBITDA margin indicates the company business earnings are stable, while the low EBITDA margin means that a company business has issues with cash flow and profitability problem.
Lines of Credit
The asset-based loan is a type of working capital, growth, and supply chain financing, the loans secured your account receivable, inventory, machinery, and equipment, and no personal credit score is required. The funding timeline is within 14 days with the term loan from 6-24 months. This loan is a great option for the consumer products manufacturers, industrial valve manufacturer, and biodegradable product distributor, who want to improve cash flow, have inventory, account receivable, seek an interest-only monthly payment, and have issue about suppliers and customers’ payment terms don’t mach.
Loan Terms & Structure
- Loan Type: Initial Advance, Lines of Credit
- Loan Amount: $500,000-$7,500,000
- Term Loan: 6-24 months
- Interest on Monthly Payments: 12%-18% (other companies charge 18%-30%)
- Funding Time: Within 14 days
- No Control of Cash
- Don’t use FICO
- Required: Companies have revenues from $5 M-$50 M
Unsecured Lines of Credit Financing
We collaborate with a wide range of businesses to offer secured and unsecured lines of credit. The lenders fund your loans on their own line of credit. The options are flexible and available for all sizes of business. Business owners have been using this type of program to pay bills, purchase additional inventory, buy out a business partner, purchase commercial equipment and use for working capital.
Unsecured loans can provides up to $150,000 for small business financing. Most financial companies required collateral, such as property, a car, boat, etc, but our lenders aren’t required collateral from business owners. The funding processes are fast, most transactions closed within 4 weeks, making unsecured loans a great funding option for business owners who really need funding quickly to pay their operating expenditures. In order to qualify for this loan, business owners need a minimum credit score 690 or higher.
Why Unsecured? Simplicity!
- No personal collateral
- No Tax Return
- No Business Plan
- Credit utilization rate 50% or lower
- Minimal credit inquiries
- Credit score 690+
- 2 Years in Business
- No Bankruptcy
- Business Cannot Have late Pays, Collections, and Liens
- Funding time 3-4 weeks
- Funding $10,000-$150,000
- Pre-approved loan within 24 Hours
This funding option is the traditional loan, allowing the company to borrow funds against their assets such as, account receivable, equipment, machinery, stock portfolio, warehouse. Most lenders take into account the assets value of the company instead of looking at credit score. Thus, if the secured loan is not repaid, lenders seize the assets that was pledged against the loan. Generally, most secured loans have a low interest rate.
Investment Portfolio Loans
Start-up and business owners can use stocks, bonds, mutual funds or other type of securities accounts as collateral to apply for business loans, while maintaining the value of the portfolio, no liquidating portfolio, no upfront cost, low interest rate (3%-4%). The loans interest aren’t incurred until the use of funds occurred.
- Funding amount: minimum $85,000 in brokerage account
- Funding up to 80% of portfolio balance
- No out-of-pocket cost
- Low interest rate
- Funding time up 2-3 weeks
- Stock loans close within 10 days