Although factoring is a large part of what we do here at The Commercial Finance Group in Atlanta, we also provide asset-based lending solutions for small and medium-sized businesses. When discussing commercial loans, asset-based lending has a slightly different meaning than when you’re simply looking for a private loan as an individual.
Whether you’re thinking about using The Commercial Finance Group to access a loan for your small business, or a traditional financial institution, it’s important to keep these tips in mind.
1. Keep Detailed Records
If you’re putting up your business assets in order to get a loan, you’re going to want to know what they’re actually worth. In some cases, banks have been known to drastically undercut asset value as it makes the financing more profitable for them.
2. Know Your Assets
Just because you consider something an asset doesn’t necessarily mean your financial institution of choice will agree. Basically, there are only two types of collateral: assets you own and assets you have a loan against. Remember, accounts receivable are considered to be a type of asset but they can’t always be used as collateral with a traditional bank loan. Of course, The Commercial Finance Group can in fact provide receivables financing.
3. Understand The Risks
As we detailed in a past blog, there are always risks when dealing with asset-based lending. Most importantly, you should know that there’s a chance that you will lose ownership of your assets. However, a quality lending institution will assess your situation thoroughly so you choose the right financing product.
Contact The Commercial Finance Group in Atlanta to learn more now!
