Asset-based lending is any type of lending where the loan is secured by an asset. The asset is used as the collateral to guarantee the lender that loan is repaid in the case of a default. This type of loan is more typical of a mature business that can pledge real estate, inventory or equipment that could be easily liquidated. Loan sizes range from 1 to 20 million dollars.
Advantages of Asset Based Lending
- Very competitive terms
- Fixed monthly repayments and longer repayment times