Read blogs that covers asset-based lending is the business of lending money through an arrangement that is backed by collateral. An asset-based loan or line of credit can be backed by inventory, accounts receivable, facilities or other properties held by the creditor. The asset-based lending market represents companies, not customers.
Company owners have more than one option to get a loan a nd of the most conventional routes is to secure a loan based on the cash balance of the company. Banks appear to prefer these types of loans because they are dependent on the company's real sales production. Another alternative is to apply for an asset-based loan. Usually, these loans are based on other considerations other than cash flow and are not preferred by conventional banks. The main distinction between asset-based loans and conventional bank loan is: The conventional bank loan would first look at the cash balance and [...]