What is asset-based lending?

The term asset-based lending refers to a multitude of lending disciplines, including real estate lending, equipment loans and leasing, commercial finance transactions (working capital loans tied to the levels of current assets of a business) and factoring of receivables.

What are the most common reasons companies secure an asset-based type transaction?

There are three primary reasons. The most common is to provide GROWTH capital for the business. Many business owners have opportunities to grow but find it difficult or impossible due to capital constraints. A second reason is to provide capital to RESTRUCTURE the existing debt of the company. A third reason is to provide the business owner with capital to ACQUIRE additional business, possibly by purchasing complimentary businesses.

What types of businesses are best suited for this type of transaction?

Manufacturers, Wholesalers, Distributors, and certain Service companies are prime candidates that benefit most from this type of financing.

Contact LRI today to discuss your options.