There are so many ways and methods of financing whether it be through loans or collateral. Now, one of the more common methods of financing that a lot of companies use would be the asset based lending Ventura county method wherein the company puts up its assets as collateral in order to get financing. This provides a safe option for lenders and a fast way for companies to get money that they need.
From this point on, most people would now be asking which assets can be considered as collateral for this type of loan. Well, accounts receivables are actually quite sought out depending on the amount of the existing accounts receivables found in the book. Aside from that, there would also be inventory, machines, property, and other equipment that has a high value.
Now, another question that has to be answered would be how the collaterals are usually valued. For the special case of the accounts receivables, the lender would usually give around eighty five percent of the total amount to be used. If ever the company will give inventory or equipment, the loan amount would be somewhere around fifty percent of the total value declared.
The next thing to know would be how much the cost of this loan is. This would really depend on the lender that the borrower is talking to but the usual rate would be somewhere in between seven percent to seventeen percent annually. As mentioned, this would wholly depend on the agreement of the lender based on general risks that are involved.
The next thing to think about now would be the process of getting the loan. Take note that the lender usually does a full background check on the company of the borrower by looking at the overall financial status of said company through financial statements. Other than that, the lender would also evaluate the total value of the collateral that is presented to him or her.
When both parties already agree to the terms, then the money can be given out. If one would observe, there is no mention of credit score here unlike for banks and other financial institutes. This is because there is no need for that much background checks since there are valuable collaterals for the lender already.
As one can see, it is extremely easy to secure this type of loan, which is why it is popular. As long as the borrower complies with all the background check requests by the lender, then there should be no problem. The lender takes the collateral, and the borrower gets the funds.
Take note that the cost of this loan is quite high compared to conventional loans. However, it is going to be needed if a company has a lot of inventory or equipment but needs more working capital to keep afloat. The best part is that there are no debts involved as actual items are already going to be given up as collateral which makes it safe for lenders.
From this point on, most people would now be asking which assets can be considered as collateral for this type of loan. Well, accounts receivables are actually quite sought out depending on the amount of the existing accounts receivables found in the book. Aside from that, there would also be inventory, machines, property, and other equipment that has a high value.
Now, another question that has to be answered would be how the collaterals are usually valued. For the special case of the accounts receivables, the lender would usually give around eighty five percent of the total amount to be used. If ever the company will give inventory or equipment, the loan amount would be somewhere around fifty percent of the total value declared.
The next thing to know would be how much the cost of this loan is. This would really depend on the lender that the borrower is talking to but the usual rate would be somewhere in between seven percent to seventeen percent annually. As mentioned, this would wholly depend on the agreement of the lender based on general risks that are involved.
The next thing to think about now would be the process of getting the loan. Take note that the lender usually does a full background check on the company of the borrower by looking at the overall financial status of said company through financial statements. Other than that, the lender would also evaluate the total value of the collateral that is presented to him or her.
When both parties already agree to the terms, then the money can be given out. If one would observe, there is no mention of credit score here unlike for banks and other financial institutes. This is because there is no need for that much background checks since there are valuable collaterals for the lender already.
As one can see, it is extremely easy to secure this type of loan, which is why it is popular. As long as the borrower complies with all the background check requests by the lender, then there should be no problem. The lender takes the collateral, and the borrower gets the funds.
Take note that the cost of this loan is quite high compared to conventional loans. However, it is going to be needed if a company has a lot of inventory or equipment but needs more working capital to keep afloat. The best part is that there are no debts involved as actual items are already going to be given up as collateral which makes it safe for lenders.
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For a closer look at the benefits of asset based lending Ventura County customers should turn to our recommended homepage and read all the information at http://www.cornerstonecapitalfinancegroup.com/cashflow.
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