Business

What are Asset Based Loans – Their Types and Benefits

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Capital investment is the first necessity for businesses of all sizes. This is particularly more important for small and mid-sized businesses because:

  • They are in need of immediate funds as and when the opportunity arises.
  • They have to keep their inventory full at all times.
  • They have to supply products to their customers in time and at best possible market rates.

These are a few factors that decide whether or not a business will be able to thrive in the market. That said, whilst there are many kinds of loans that can be applied for, the best ones are asset based loans by Accord Financial. And before we can take you through the types of Accord Financial asset based loans, it’s best to understand when these kinds of loans are most beneficial. They are practically very helpful when you are looking forward to:

  • Restructuring your business.
  • Rapid growth.
  • Acquisition or layout
  • Refinancing

That said, let’s now talk about the different kinds of asset based loans.

3 Types of Asset Based Loans for Small and Mid-sized Businesses

Equipment, inventory, and accounts receivable – all of these are assets. And asset based lending (ABL) is issued against these resources. The 3 types that are the most beneficial are listed below. Have a look!

  1. Lender Finance

As the name suggests, this ABL type is for alternative lenders.

You could be an individual or even a small firm, but as long as you qualify under the loan eligibility criteria at Accord Financial – an average and clean credit score, an establishment that is at least 2 years old, and an annual sale of at least $100,000 – you will be provided with the approved funds that you can further lease or loan to your customers.

  1. Retail Inventory Finance

This one is for:

  • Retailers
  • E-commerce shop owners
  • Marketers

Inventory is the source of income for such businesses. The cash flow exists between a closed circuit – the supplier you buy your goods in order to fill your inventory and the customers you sell those goods to. Clearly, inventory, here, is the actual king.

So, retail inventory financial loan by Accord Financial converts the inventory into working capital. As a result, the goods that customers want never go out of stock as you will always have funds to buy those goods from the suppliers.

  1. Debtor in Possession Financing (DIP)

This financial service is a great help for struggling businesses trying to restructure again. A simple financing solution isn’t enough in such cases of bankruptcy.

You don’t have to pay your creditors immediately when you’re trying to get operational under the bankruptcy law. However, you might be in the need of extra funds to, for example, purchase an equipment or a financial management solution. But, most banks won’t approve your loan in such cases. It’s therefore the best option to avail the DIP assistance provided by Accord Financial to cover the extra cost.

All in all, no matter what you need, firms like Accord Financial will always have options to help your business recover and expand.

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