We’ve published previous blogs about asset-based lending and its benefit for small to medium-sized businesses. We believe strongly in these benefits, which is why we’re so proud of the asset-based loans we provide here at The Commercial Finance Group in Atlanta.
However, we are professionals dedicated to leading our industry through best practices. For that reason, we won’t pretend that asset-based lending is always the right choice for every business. While they’re applicable for very few businesses, there are some disadvantages to asset-based lending that you should know.
Limited Assets That Qualify
One thing that makes asset-based lending inaccessible to some businesses is that they simply don’t have enough assets that qualify. Just because something is an asset to you and your business doesn’t necessarily mean lenders will see it that way.
Chance Of Losing Assets
Any time you put assets up as collateral for a loan, there is a risk that you could lose them. This typically only happens in the case of lenders who accept collateral from a company with a rocky financial history or obvious signs that they’ll probably default on the loan. These are considered predatory practices and they have been far and few between since tightened regulations.
The good news is that The Commercial Finance Group offers multiple lending solutions for small businesses. We’ll never recommend that you pursue asset-based lending if it’s not 100 percent right for your current financial situation.
Contact us to learn more about your options for commercial loans today. We’d be happy to evaluate your current finances and assets to help determine the best small business lending solution for your needs.
