Asset Based Lending, Factoring and Equipment Financing

Southern Capital Funding Network provides business owners with multiple financing options to use the assets of their business (rather than cash flow) as collateral. 

Established businesses can use Purchase Orders, Receivables, Service Contracts, Financial Contracts, Inventory (in tandem with AR line) and business equipment to acquire working capital.

Asset-based lending (ABL) is a business loan secured by collateral, also known as assets.  ABL finance is typically structured as a revolving line of credit, which allows a company to borrow against assets on a continuing basis to cover investments or expenses as required.

Asset-based loans

An asset-based business line of credit is usually designed for the same purpose as a normal business line of credit - to allow the company to bridge itself between the timing of cashflows of payments it receives and expenses. The primary timing issue involves what are known as accounts receivables - the delay between selling something to a customer and receiving payment for it.   

A non-asset-based line of credit will have a credit limit set on account opening by the accounts receivables size, to ensure that it is used for the correct purpose. An asset-based line of credit however, will generally have a revolving credit limit that fluctuates based on the actual accounts receivables balances that the company has on an ongoing basis. This requires the lender to monitor and audit the company to evaluate the accounts receivables size, but also allows for larger limit lines of credits, and can allow companies to borrow that normally would not be able to.