One of the best ways to increase your cash flow is through asset-based lending, which allows you to leverage your company’s assets in order to gain access to working capital. By using your inventory, real estate, equipment, or even Accounts Receivable as collateral, you can secure a loan which probably will have a duration of one year or more.
You can use that loan money for a wide variety of purposes in addition to increased cash flow, for instance to take advantage of a business opportunity which has arisen, or to expand your business, so you’re positioned for real growth. Alternative lenders are much more inclined to approve a loan for your business when it’s backed by hard assets like those mentioned above.
Why use asset-based lending?
Asset-based lending tends to be very well suited to those companies which have seasonal sales, and it’s also a very flexible kind of financing, which most businesses can take advantage of. It will provide you with faster access to the capital you need, because approvals can be obtained much more rapidly than through traditional lending institutions. When conventional banks can’t provide you with the operating capital you need quickly enough, for instance to improve your cash flow, asset-based lending might very well be the answer for you.
Qualifying for asset-based lending
Companies which are seeking to apply for asset-based lending should have a fairly strong credit score, and should have good financial reporting, with solid internal controls. Your company should have a strong credit history, and a good track record within your industry. It also helps a great deal to have accurate monthly financial statements, with aged summaries of your accounts receivable and accounts payable. Lastly, you should also have some valuable assets that would be negotiable on an open market, and which have value to others besides your own company.
Would your business benefit by better cash flow?
Most businesses strive for better cash flow, and if yours is included in that category, we may be able to help you. Contact us at Blackwater Capital Funding, so we can discuss some options which will ease the strain on your business budget, and keep your company operating smoothly all the time.