Asset based lending can be a valuable source of capital for growth

Trying to fulfil business growth plans can be a challenge. Of course, there will be businesses that have strong cash reserves and excellent revenue streams resulting in them having the ability to constantly fulfil all their growth initiatives. However, for most there will be a need to improve their working capital.

Arguably one of the most popular and effective solutions is asset-based lending. This finance facility will allow you to access funding against business items such as stock, machinery, facilities, property and invoices. The ability to boost a business’s cashflow through its assets can be very useful.

There are many advantages to asset-based lending:

• The application process is generally much simpler in comparison to other forms of lending.
• It is a flexible solution with very few restrictions on how you spend the funds.
• You remain in control of all assets that have been used as collateral to secure new funding.
• A fixed repayment agreement enables simple cashflow planning.
• Interest repayment rates are very competitive.
• A lender has the security of the business asset used as collateral for the loan.

Of course, it is not just fulfilling growth plans that can put pressure on a business. The constant changes and rises in costs also must be carefully considered and monitored. Typical examples include the cost of materials, import/export charges, productions costs, energy rate rises and requirement for new staff. On occasion, there are also unexpected costs such as machinery breakdown, property damage or equipment failure that can also have a negative impact on business capital.

Whether it is to fulfil business growth plans or to accommodate an unexpected business expense, asset-based lending offers an excellent alternative to the traditional bank loan. It is a very flexible solution that can be tailored to a business’s specific needs, it is also a diverse and scalable option that is perfect for all business types.

If you need any help or have any questions in relation asset-based lending then our team would be delighted to help. To find out more please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.