WHAT IS AN ASSET BASED LOAN
ASSET-BASED LOAN
An asset-based loan is secured by a physical asset, making the value of the asset a key factor in loan qualification, rather than the borrower’s financial profile. At Ascend Partners Group, we lend up to 70% of an asset’s value. For example, if a property is valued at $1,000,000, we can potentially lend up to $700,000. This structure provides quick access to cash by allowing borrowers to leverage their real estate.
Key Characteristics of Asset-Based Loans
Asset-based lending is ideal for businesses with substantial tangible assets but limited credit history or cash flow, or when the simplicity and speed of a private money lender is preferable to traditional financing.
Collateral-Driven
The loan amount is directly based on the asset’s value. Higher-value assets allow for larger loan amounts.
Flexible Financing
Asset-based loans are beneficial for businesses needing to improve cash flow, particularly when conventional credit access is limited.
Interest Rates and Terms
Rates may vary based on the risk associated with the asset and borrower profile. These loans often carry higher rates compared to traditional loans due to the higher risk for the lender.
Usage
Asset-based loans can support operations, inventory purchases, acquisitions, or manage seasonal revenue fluctuations.
How Asset-Based Loans Work
Asset-based loans use the property’s value as collateral, enabling borrowers who may not qualify for traditional funding to access capital. These loans are especially suitable for real estate transactions where the property has significant value but the borrower may have limited cash flow or credit history. By leveraging the asset, such as a property, investors can unlock funds based on the asset’s current market value, with the loan held in first position.
When Asset-Based Private Money Lending Makes Sense
- Refinancing isn’t available, and an existing loan is due
- Conventional loan qualifications can’t be met
- A partner or spouse buyout is needed
- Cash is required for property improvements
- Quick funding is essential for a transaction
Contact Ascend Partners Group
Connect with us today to learn more about how an asset-based loan can provide the funding you need efficiently and effectively.