Asset based loans are a great alternative for rapidly growing companies, or those that are highly leveraged, undercapitalized, in turnaround or recovery cycles, or otherwise not bankable. Companies that have cash tied up in raw material and finished goods inventory or that experience seasonality or significant gaps in cash outlay and cash receipts are also good candidates for asset-based loans. For example, a manufacturing company that must purchase raw material prior to production but won’t receive payment until 30-90 days after production is completed will experience a negative cash flow for that project. An asset- based lender can finance the inventory, accounts receivable, unencumbered equipment and real estate to help the manufacturer improve cash flow and working capital.What types of companies use Asset Based Loans?
