Need some extra funding for your business? You’re certainly not alone. Looking for asset-based funding to keep your business going until the economy rebounds is a smart move. Asset-based loans are a great option if your business has limited revenue and wouldn’t be eligible for traditional bank loans.
Other alternative lending options may charge exorbitant interest rates. Asset-based loans are different. With asset-based loans, you get the benefits of your asset investments and the financing your business needs now. Asset-based loans are among the best kinds of secured business loans available today.
The Benefits of Asset-Based Financing
Unlike other kinds of loans, an asset-based loan is one that you qualify for and secure with owned collateral. The owned collateral consists of assets, such as equipment, real estate, accounts receivable, and other property types. If the borrower defaults with repayment, the lender may take the assets that were used as collateral.
There are several reasons why your business would do better with asset-based loans instead of more traditional options. Asset-based financing has several benefits, including:
You don’t have to worry about times being tough when applying for asset-based financing. As long as you have assets to use as collateral, you can get the financing you need. There are several kinds of assets you can use, including real estate, equipment, accounts receivable, and others. The asset or assets you use as security for your loan will be evaluated on their market value.
Better Chance of Success
There are situations where businesses not eligible for traditional loans can get asset-based loans. The best asset-based loan providers don’t have a minimum FICO score cut-off for their most popular options. When times are tough and your business has limited cash flow, you can use assets you already have to keep you going.
You’re likely to be eligible for larger funding amounts when you go with an asset-based loan. ROK Financial tells you about the best options for the maximum funding for your business. In times like these when your business’s revenue is on the lower end, asset-based financing lets you benefit from the assets you’ve accumulated.
ROK’s Fintech Speed means that underwriting is done at lightning speed. Ever heard of underwriting done in a few hours? It’s possible to get same-day funds with an asset-based loan. No need to wait for days wondering whether you’ll have to look for other options.
Competitive Interest Rates
If your business isn’t eligible for a traditional bank loan, an asset-based loan is your best bet to keep down the interest rate. Other kinds of alternative loans, especially ones with unsecured financing, often have sky-high interest rates. Secured business loan rates are lower because your assets create lower risk for the lender.
The Different Types of Business Financing Options
There are several business financing options and commercial loan types available. Let’s take a look at some of them below.
Business Lines of Credit
When you get a line of credit for your business, you have access to money whenever you need it. If you’re approved for a business line of credit, find out how much you’re eligible to borrow. You don’t have to borrow it all.
The term loan is what most of us think of when talking about business loans. With a term loan, you get a specific amount of money and have to pay it back by a specific time. Term loans may be designated business loans or personal loans. Sometimes new business owners will take out personal loans that they devote to their businesses.
Commercial Real Estate Financing
Businesses wanting to buy new commercial real estate may look for a commercial real estate loan. The requirements for this kind of loan will depend on the lender and how much you need to borrow.
As Costs Increase and the Economy Rebounds, Collateral Gets Better Terms
If you get an asset-based loan during this current downturn, you’ll be in an even better position when the economy rebounds. Your asset-based loan will give you the necessary funding to keep your business going during these tough times. When the economy recovers, your business will be in a position to take advantage of the opportunities.
Backing Your Business Line of Credit with Equipment & Commercial Properties
If your business has limited revenue and you’ve found it challenging to get bank loans, you can leverage your equipment and commercial properties to get asset-based financing. There are two types of asset-based financing: secured business lines of credit and loans. Asset-based lending banks offer both.
With an asset-based line of credit, you don’t have to use all the funds that are offered to you. You have the benefit of knowing that they’re available if you need them, but you will only be charged interest on the money that you use.
Applying for Asset-Based Financing
Once you’ve decided to apply for asset-based financing with ROK, the process is simple and easy. With ROK asset-based funding, you get same-day funding. Loans range from $10,000 to $5 million. They’re a useful form of secured business financing.
There are just two requirements for getting asset-based financing with ROK. You’ll need to have been in business for a minimum of three months. You’ll also need monthly gross sales of at least $15,000. This comes to annual gross sales of $180,000. As mentioned earlier, you don’t have to worry about FICO scores when applying to ROK asset-based financing.
ROK’s application only takes 15 seconds to complete. If you’re approved, you could get your funding in a matter of hours. There are many kinds of businesses that benefit from asset-based financing. Just one example is commercial trucking. ROK offers special commercial truck loans that perfectly fit your needs.
When you apply for asset-based financing with ROK, a Business Financing Advisor will work with you to explore the financing options that best fit your business’s needs. ROK makes sure you get the best in terms of interest rates, terms, and funding.
About the Author, Madison Taylor
Madison Taylor is the Brand Ambassador at ROK Financial. She is responsible for raising brand awareness and business relationships with business owners across the country. Madison loves that she plays a small role in getting Business Back To Business Through Simple Business Financing and looks forward to hearing what you think about the blogs she creates! Madison has been working in the financial space for six years, and loves it! When she is not at work, you will find her at home learning a new recipe to test out on her family or going on new adventures with her friends.