Asset-based lending offers the following advantages to the borrower: Asset-based loans are easier and quicker to obtain than unsecured loans and lines of credit; Such loans generally include fewer covenants; and. Asset-based loans generally come with a lower interest rate compared to other funding options.

What is asset-based lending used for?

Asset-based lending involves loaning money using the borrower's assets as collateral. Liquid collateral is preferred as opposed to illiquid or physical assets such as equipment. Asset-based lending is often used by small to mid-sized businesses in order to cover short-term cash flow demands.

Is Asset-Based Lending a good company?

Small and midsize businesses that are in a growth, turnaround or acquisition mode can find great value with an asset-based loan. All companies with assets in their balance sheets that include accounts receivables, inventory or fixed assets should consider an asset-based loan as a viable financing option.