Financing Inventory and Accounts Receivable

Asset-Based Loans are, as the name would imply, loans that are based on the assets of your company. Traditionally, asset-based loans are those secured by your accounts (invoices) and by your on-site inventory. In some cases asset-based lenders will also use equipment as additional collateral.

Unlike factors who actually purchase your accounts weekly, asset-based lenders lend against your assets. Your business will therefore need a certain level of established credit history to qualify for asset-based lending, although typically much less than for a traditional financial statement loan as provided by most banks.

In its most basic form, asset-based lending transactions are formatted primarily on the value of collateral and not just on a client's credit history. Loans are most often structured as a "Revolving Line of Credit". As with factoring, the assets will usually be closely monitored, but through periodic audits rather than a factor's more hands-on participation in collection.

Asset-based lending is the natural transition from factoring for those manufacturers and distributors that grow to the point where they need inventory and equipment finance. Phoenix Financial Company works closely with some of the nation's largest providers of both factoring and asset-based lending and can provide your small business with the lines of capital necessary for growth and expansion.

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Want to find out more about factoring and further explore the services Phoenix Financial Company can provide for your small business? Then simply request our FREE booklet "When Banks Say NO!...The Small Business Guide to Factoring." It's FREE, from Phoenix Financial Company. Click below to order.