American businesses have long depended on asset-based lending to grow their companies or help them restructure and reemerge as rejuvenated commercial participants.
Indeed, asset-based lending (often termed asset-based financing, as well) can offer many distinct advantages to businesses over more traditional forms of lending arrangements. Many companies secure loans based on their perceived ability to make timely payments from ongoing cash flows. That funding source is not always readily available, though, which can make asset-based lending a viable option.
Indeed, the terms relevant to such financing are often comparatively enviable, given a lender’s ready access to assets pledged as collateral. Company principals can often negotiate a repayment schedule and other outcomes relevant to revolving lines of credit and other schemes that provide for maximum flexibility.
One recent article underscores the strong utility that asset-based lending commands for principals in the retail industry. Many of those businesses are brick-and-mortar entities increasingly challenged by e-commerce (read online) competitors. They might not have huge amounts of cash on hand, but they do have considerable inventory and other assets at their disposal. Those can serve to attract new capital to update, restructure and take other measures geared toward enhanced productivity.
Attorneys at the established New York City commercial law firm of R3M Law, LLP, routinely help diverse business clients understand and take advantage of asset-based lending opportunities. We invite contacts to the firm from business principals seeking to know more about how asset-financing financing can benefit their enterprises.