More often than not, personal loans would require some sort of collateral such as a car or a home title. However, these days businesses may also put up some of the company assets as collateral in order to get financing. The great thing about this sort of loan, which is known as asset based lending ventura county, is that the process is really fast and the lender is kept safe in the event that the cannot pay or decides to run away.
From this point on, most people would now be asking which assets can be considered as collateral for this type of loan. Well, accounts receivables are actually quite sought out depending on the amount of the existing accounts receivables found in the book. Aside from that, there would also be inventory, machines, property, and other equipment that has a high value.
That said, the next question to tackle would be exactly how one values the collateral. For accounts receivable, it would usually be somewhere at eighty five percent of the total accounts receivables that will be used for the loan. For the businesses giving inventory or equipment, the loan value would be somewhere at fifty percent of the fair market value or total value if inventory is used.
The next thing to know would be how much the cost of this loan is. This would really depend on the lender that the borrower is talking to but the usual rate would be somewhere in between seven percent to seventeen percent annually. As mentioned, this would wholly depend on the agreement of the lender based on general risks that are involved.
The next thing to think about now would be the process of getting the loan. Take note that the lender usually does a full background check on the company of the borrower by looking at the overall financial status of said company through financial statements. Other than that, the lender would also evaluate the total value of the collateral that is presented to him or her.
When both parties already agree to the terms, then the money can be given out. If one would observe, there is no mention of credit score here unlike for banks and other financial institutes. This is because there is no need for that much background checks since there are valuable collaterals for the lender already.
As one can see, it is extremely easy to secure this type of loan, which is why it is popular. As long as the borrower complies with all the background check requests by the lender, then there should be no problem. The lender takes the collateral, and the borrower gets the funds.
Take note that the cost of this loan is quite high compared to conventional loans. However, it is going to be needed if a company has a lot of inventory or equipment but needs more working capital to keep afloat. The best part is that there are no debts involved as actual items are already going to be given up as collateral which makes it safe for lenders.
From this point on, most people would now be asking which assets can be considered as collateral for this type of loan. Well, accounts receivables are actually quite sought out depending on the amount of the existing accounts receivables found in the book. Aside from that, there would also be inventory, machines, property, and other equipment that has a high value.
That said, the next question to tackle would be exactly how one values the collateral. For accounts receivable, it would usually be somewhere at eighty five percent of the total accounts receivables that will be used for the loan. For the businesses giving inventory or equipment, the loan value would be somewhere at fifty percent of the fair market value or total value if inventory is used.
The next thing to know would be how much the cost of this loan is. This would really depend on the lender that the borrower is talking to but the usual rate would be somewhere in between seven percent to seventeen percent annually. As mentioned, this would wholly depend on the agreement of the lender based on general risks that are involved.
The next thing to think about now would be the process of getting the loan. Take note that the lender usually does a full background check on the company of the borrower by looking at the overall financial status of said company through financial statements. Other than that, the lender would also evaluate the total value of the collateral that is presented to him or her.
When both parties already agree to the terms, then the money can be given out. If one would observe, there is no mention of credit score here unlike for banks and other financial institutes. This is because there is no need for that much background checks since there are valuable collaterals for the lender already.
As one can see, it is extremely easy to secure this type of loan, which is why it is popular. As long as the borrower complies with all the background check requests by the lender, then there should be no problem. The lender takes the collateral, and the borrower gets the funds.
Take note that the cost of this loan is quite high compared to conventional loans. However, it is going to be needed if a company has a lot of inventory or equipment but needs more working capital to keep afloat. The best part is that there are no debts involved as actual items are already going to be given up as collateral which makes it safe for lenders.
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For a closer look at the benefits of asset based lending Ventura County customers should turn to our recommended homepage and read all the information at http://www.cornerstonecapitalfinancegroup.com/cashflow.
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