What Is Asset Based Financing?
Many businesses have assets that can be leveraged to improve cash flow. The assets are typically found in your company’s Balance Sheet and can be used as collateral to secure a loan or line of credit. These include:
Outstanding (unpaid) invoices - Accounts Receivable
Equipment
Purchase Orders
Real Estate
Contracts
One of the major advantages of this type of financing is that the loan or line of credit may be based entirely on the assets that you pledge as collateral and not on the creditworthiness of the business or the owner. The terms and conditions of the loan depend on the value and type of assets you put up as collateral. The loan amount is usually pegged to the market value of the collateral.
Generate a Positive Cash Flow with Asset Based Financing
Cash flow is essential to the health of any business. That is why your business will suffer if your cash flow hits a dam. We can help if your cash flow is associated with your accounts receivable, inventory, contracts etc. This is because your accounts receivable is a vital asset and the lifeblood of your business. We can provide any business with immediate cash based on their receivable. We even have special programs for healthcare service providers.
What is accounts receivable (A/R) financing?
Accounts receivable financing is like a traditional bank loan. However, a pledge of your accounts receivable to our Lending Partner serves as collateral. This type of financing lets you turn your outstanding invoices into readily available cash flow for your business.
What is factoring?
In factoring, you sell ownership of your outstanding invoices at a discounted rate to our factoring partner (Factor) for immediate cash. So, this financial tool can help you improve cash flow, improve collections and control exposure to bad debts. For example, if you have $20,000 worth of outstanding invoices, you can sell them for $19,000 through factoring. Your client subsequently pays the outstanding invoice directly to the Factor. Therefore, the credit rating of your client is the most important consideration in this type of transaction.
What is the difference between factoring and accounts receivable financing?
Factoring and A/R financing offer you an alternative to a traditional bank loan because they are secured by your accounts receivable. Traditional A/R financing uses your invoice as collateral. Hence, you still own your invoice, and it is your business’ credit rating that is considered in extending the loan. However, in factoring, you sell the invoices to the Factor and so no longer own them. Therefore, it is only the credit rating of your client that is considered in the transaction.
Enjoy the freedom of letting your customer’s credit finance your seasonal inventory or new growth opportunities when you sell your A/R to our Lending Partners.
What asset based financing options does LaGray Finance offer?
We offer a portfolio of innovative solutions for your working capital needs, based on your assets. Our programs for working capital financing are easy and efficient, with a fast application and approval process. The uses of funds are limitless and include payroll, operating expenses, equipment purchase, expansion and debt restructuring.
If you need cash now for your business, you should consider the following financing options that we offer:
Accounts Receivable Financing
Equipment Lease Buy Back
Factoring
Healthcare Accounts Receivable Financing
Mobilization Financing
Purchase Order Financing
Are you ready to explore asset based financing for your working capital needs?
Contact us by phone or email or fill out our application form and send to info@lagrayfinance.com. We will work with you to determine what type of financing is best for your business. We are here to answer your questions and give you a no-obligation opinion today.