As we all know, running a business involves a lot of money. And when your business starts growing rapidly, the need for finance goes up as well. Now, some businesses do not have enough funds to support their growth and expansion plans. And if their credit score is not good, they struggle to obtain loans from traditional banks and lenders. If your business needs financing, we will advise you to go for asset based equipment financing.
It is a type of debt-based business financing where lenders provide loans to businesses using their assets. Businesses can leverage their inventory, machinery, or receivables to raise funds in a fast and efficient way. You can use your free and clear equipment as collateral to buy new, modern equipment. In this blog, we will tell you why a fast growing business may benefit from taking asset based financing. We’ve listed some points for this. Let’s take a look at them.
Asset based loans are also called secured loans. And in comparison to traditional loans, they are considered cheaper because they are not really based on the company’s financial history. Banks, when they offer loans after assessing the credit history of a company, charge a higher interest rate because they are assuming more risk. So, if you decide to go for asset based loans, you might get to enjoy lower costs.
We all know that getting a loan requires a lot of documentation. For instance, if you want a traditional business loan, you will have to present before the lender all your company’s financial history documents. However, in the case of asset based financing, the need for documentation would be less. So, it would be best for companies, especially newer companies, to secure the loan against the value of their inventory than to go for a traditional loan.
One of the biggest problems with getting conventional loans is, they put a lot of restrictions on you and ask a lot of questions. A bank may ask you why you want a loan and how you’re going to use it. If you do not want to be troubled with such inquiries and quickly get equipment financing, you should choose asset based financing. Asset based equipment financing will allow you to carry out your business plans quickly by putting fewer restrictions on you.
If interested, you can get in touch with Exponential Equipment Finance. We believe there’s more to your business than your credit score. We’re well aware that credit scores can take a few bumps and bruises in today’s tumultuous economy. We don’t want your credit score to impede you from getting the equipment your business so urgently needs. If you’re looking to get asset based equipment financing, look no further than Exponential Equipment Finance.