Use an asset-based loan to finance a business in transition, e.g., one currently undergoing management buyout, or implementing a new product line or rapid expansion.
This commercial lending approach relies on the conversion of assets (usually accounts receivable and inventory) as primary repayment for the loan, and is a good solution when traditional credit reliance on historical cash flow is not a viable approach. Loan types include working capital revolving credits, equipment term loans, and real estate term loans with working capital loans outstanding in excess of $2MM.
- An excellent way to finance in business situations not supported by traditional bank underwriting structures
- Provides higher-than-typical borrowing availability against asset values, and thus requires more frequent monitoring of collateral values than required under a typical bank commercial loan structure