Asset Based Loans

Use your business assets for working capital!

Loan Amounts

$25,000 - $10,000,000

Terms

1 - 5 Years

Rates

7% - 12%

Speed

10 - 14 Days

What is an Asset Based Loan?

When cashflow alone isn’t enough for a business to qualify for a loan, a lender will look to the business assets to gain extra comfort and security. An Asset Based Loan can be structured as either a line of credit or a term loan, but the focal point will be the collateral that’s available to secure the loan.

The terms and conditions of an Asset Based Loan will also depend on the type of collateral that is available. Some of the collateral that a lender will consider for an Asset Based Loan is the following; accounts receivable, inventory, equipment, real estate, intellectual property, and marketable securities. It’s important to note that the most crucial collateral to a lender is going to be the accounts receivable and inventory. Other collateral, while in important, is not needed for an Asset Based Loan, but will be considered if there is a need for additional capital.

How does the Asset Based Loan process work?

The application process to apply for an Asset Based Loan is paperwork intensive and requires a business owner to have all of his/her financial information organized. Outside of the standard documentation an Asset Based Loan is going to require a detailed asset list so a lender can understand the collateral that’s available to them.

Apply Online

SMB Compass's simple and secure online loan application can be completed in a matter of minutes. Quick & Easy!

Get Approval

After we process your application we will contact you and provide you with the best loan offer. 

Get Back To Business

Once your loan is approved in 10 - 14 days. You will have capital deposited directly to your business bank account.

What are the best industries for Asset Based Loans?

Asset Based Loans are generally best for business to business (b2b) industries. The reason this is the case is because B2B industries tend to have significantly more collateral then business to consumer (b2c) industries. For example, a manufacturer will have equipment, accounts receivables, and inventory/materials, while a restaurant will only have furniture, fixtures, and equipment.

Business Services

Manufacturing

Transportation & Trucking

Staffing

Why would a business use an Asset Based Loan?

There are a variety of reasons why a business would use an Asset Based Loan. Some of those reason include;

  1. Refinancing existing debt to improve cashflow
  2. Raising capital to expand the business and purchase inventory
  3. Business cashflow alone won’t support a loan and the bank needs additional comfort
  4. Raising capital for business acquisitions
  5. Pledging collateral can replace the need for a personal guarantee

The 5 reasons above are just a few of the reasons why a business would use an Asset Based Loan. Overall, the purpose of an Asset Based Loan is to turn the assets on your balance sheet into cash to use in other areas of the business.


What is a real example of a company that used an Asset Based Loan?

A real example of a company that used an Asset Based Loan was a plastics manufacturer based in Detroit, Michigan. New sales were resulting in the need to accelerate plans to purchase additional materials and higher labor faster than the initial forecast. With multiple partners in the business, it was hard to get everyone to agree to personal guarantee the loan, so we used the assets to replace the personal guarantee requirement. We were able to leverage the accounts receivable, inventory, and the plant machinery as collateral to provide a $1.2 million Asset Based Line of Credit. The company had an immediate injection of $1.2 million, which was previously tied up on the balance sheet. Think about the assets you might have on your balance sheet to turn to cash.

What documents are required for an Asset Based Loan?

  • SMB Compass Online Application
  • 3 Years of Business Tax Returns
  • 3 Years of Business Financials (Profit & Loss and Balance Sheet)
  • Current Financials (Profit & Loss and Balance Sheet)
  • Detailed A/R and A/P Aging Reports
  • Detailed Inventory Report
  • Machinery and Equipment List
  • Current Debt Schedule

What Our Clients Are Saying

"We cannot express just how grateful we are that we found this company to work with. No matter what finance companies we reached out to for help we kept getting turned away and even at times, no call back. SMB Compass found us the best source of financing that would not just help in the short term, but gave us a solid plan to regain financial independence. We have been able to keep employees working and grow our business."
Tim C.

Massachusetts

"My family business has been around for over 25 years and we are grateful to have been introduced to the SMB Compass team. We’re now growing by 50% per year and without the help of SMB Compass, we wouldn’t have the capital to do so. We started off with a series of 5 year equipment loans and a 5 year working capital loan, and now the SMB Compass team has been able to secure a bank term loan and a $450,000 line of credit, with a bank that’s willing to grow with us!"
Greg P.

New Jersey

"I can’t begin to explain how helpful Matt Gillman and the SMB Compass team has been. I was able to put an operating line of credit in place along with a term facility that recapitalized my business. I constantly tell Matt and his team that they need to figure out a way to show people how different they are then others. I have recommended SMB Compass to family and friends and highly recommend them to any business owner looking for financing."
Fred S.

Indiana

Quick Approval for Your Small Business Loan

$160,000,000+ in financing provided to date. SMB Compass will provide your business with the best loan options available. Apply in minutes. Your results await. 

Friendly 5-10 Minute Introduction
Documentation and Underwriting
Approval and Funding

Frequently Asked Questions

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