Asset based lending is the provision of commercial finance on the strength of a business’s balance sheet.

• Assets can include:
• land and buildings
• plant and machinery
• motor vehicles
• stock
• debtors

In some cases, intangible assets such as strong brands or goodwill may be taken into account.

A financier may provide a single structured funding package against all assets of a business. This approach can give the lender a greater level of security and allow them to the release a higher level of finance than would otherwise be the case.

Alternatively, it may be more appropriate for a business to seek finance on its main asset which is often its debtors, through a factoring or invoice discounting facility.

Asset based lending is available to all businesses in all market sectors. The level of finance that can be secured and the competitiveness of rates quoted will be dependent on the quality of the assets and the underlying strength of the business.

Packaging a funding request in a considered and knowledgeable manner is the key to maximising the available funding.