Is my business eligible for Asset Based Lending?
What is asset based lending?
In everyday business the factoring of credit invoices, is a form of asset-based lending and is often used by businesses of all sizes.
Asset-based lending is any kind of lending secured by an asset. This means, if the asset based lending is not repaid, the asset is taken. In the UK asset based lending is used to describe lending to business using assets not normally used in other loans. Typically, these loans are tied to inventory, accounts receivable, machinery and equipment.
How do you know if your business is eligible for asset based lending?
If your business needs to raise funds then it may be eligible for asset based lending. For example does your business have funds tied up or value in any of the following:
- Inventory
- Stock
- Unpaid invoices.
- Accounts receivable
- Machinery
- Equipment
- Trademark
- Assets of intellectual property.
The questions that need to be answered before a business can eligible for asset based lending?
- Does your company sell on credit terms to other companies?
- Do you have a preference regarding the location of your invoice finance provider?
- What type of facility are you interested in?
- What industry are you in?
- What is your forecast annual turnover this financial year?
- Estimated funding requirement?
- Is your business subject to seasonal trade?
- Are you seeking to finance all or part of your ledger?
- Are you seeking a facility for a single debtor only?
- Are you subject to CIS certificates? (Construction industry only)
- What percentage of your ledger is subject to sale or return items?
- What percentage of your ledger is subject to staged payments?
- What percentage of your ledger is of a contractual nature?
- What percentage of your ledger is government debt?
- What are your standard terms?
- What is the amount of outstanding invoices?
- What is the percentage of income generated by the biggest customer?
- What is the average number of invoices issued each month?
- What is the average period of credit used by your customers?
To find out if your business is eligible for asset based lending please call 0800 597 4757.
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The UK Factoring & Invoice Discounting Helpline is a leading finance brokerage specialising in factoring and invoice discounting. We offer free, independent and impartial advice on business finance options. We have been helping businesses of all sizes and commercial sectors solve cashflow problems for more that 10 years. We have found factoring and invoice discounting facilities for many thousands of businesses and remain in contact with all our clients.