Entrepreneurs need to secure debts to operate their businesses for a variety of reasons successfully. However, they should always keep their options open. They need to explore the pros and cons of each of these alternatives. This ensures they make the right decision keeping their best interests in mind. Many industry experts suggest they should give asset-based lending a serious consideration. Under this mode of funding, the proprietors can borrow money they need against their business assets. These can include equipment, marketable securities, accounts receivable and inventory. Lenders hold them as collateral for 12 months during which period, the proprietors should clear their debts.
Steven Rindner – Why should entrepreneurs consider opting for asset-based lending?
Hardly any financial professional in America can boast of reaching the same level of success as Steven Rindner. This St. John’s University School of Law graduate has over 20 years of experience under his belt. He has been a catalyst in the success of many prominent startup businesses in the country. These organizations conduct their activities in fields as diverse as debt financing, digital media, marketing, and technology. Today, he occupies the position of Chief Strategy Officer in Scout Media, Inc.
According to this financial expert, entrepreneurs can enjoy the following 4 important advantages by opting for asset-based lending:
- Improves cash flow
Entrepreneurs owning businesses of various sizes strive to maintain a steady flow of cash. Liquidity is the primary concern of these proprietors over profitability. This enables them to conduct their market operations without facing any serious problems. Otherwise, the creditworthiness of these businessmen in the market may come into question. Opting to use asset-based lending to get the money these owners need helps them to achieve their objective. This is a fact which almost all of them cannot simply dismiss outright.
- No stringent requirement
Applying for a commercial loan or obtain a line of credit is a daunting task for most entrepreneurs. It becomes even more challenging for these owners when they don’t have an impeccable credit record. There is no guarantee they’ll get such funds. This is because the lenders who offer such modes of finances have very stringent guidelines. They expect potential borrowers to satisfy such conditions. These financiers insist such requirements are necessary to protect their own interests. However, this is not the case with asset-based lending.
- Low costs
Interest rates on unsecured loans are raising almost every day. This is a direct consequence of the fluctuations in the financial markets. However, entrepreneurs opting for such funds find it increases their costs. This makes it difficult for them to make ends meet. The expenses put immense pressure on cash flow position. In contrast, asset-based lending is a much cheaper option.
Financiers offering asset-based lending options to their clients have flexible repayment plans. Many entrepreneurs are opting for such loans against their inventory or accounts receivable. Almost all of these owners can repay such debts within a very short period. Moreover, they can do so without any hassle.
In the opinion of Steven Rindner, asset-based lending can work wonders for entrepreneurs. They can get the need money to fund their market operations without any hassle. They just need to go through the above 4 important advantages. It can clear any doubt they may have on this issue. It is a decision they won’t regret making in the long-run.