Your business might be on the hunt for business financing under asset finance and you are looking for a lender that will offer you this finance. One question you might be asking is does your business quality for asset finance? Credit financing is a very popular with many business owners as well as financial managers because they have begun to see with the economic clouds looming on the horizon that they need to be on the lookout for growth financing.

The type of operational facilities that you as a company might be looking for from some of the major banks is getting really tough to secure these days. The ability to secure asset based lending for both inventory as well as receivables has become the goal in asset finance. There is a difference between asset financing under an asset based lending facility and a bank line credit facility, which is sometimes called a revolver in business finance. How to show the difference would be to say that the bank’s focus will be on the cash flow whilst the asset based lender will focus on the assets.

Finding out if your business qualifies for asset finance:

You might be wondering if your company qualifies for asset based lending finance. Generally speaking, any company that has assets of receivables or equipment or inventory or real estate will qualify. The challenge arises in deterring overall quality of the assets and also the size of the facility. An asset based lending facility is usually available to any company that has well over a certain amount of assets that amount to a certain amount of receivables, inventory, and equipment. Sometimes tax credit receivables are able to be financed.

With asset finance, your company will be provided with the unique alternative over the traditional type financing for your business so that your company can obtain the necessary equipment for whatever operations you had in mind. Asset financing is done as either an operating lease or a capital lease, and each of these options has its own effect that will show on the company balance sheet. But both will give your business the extra option to finance those assets that you need to expand your business and also to generate revenues and to expand. The method of asset financing is usually a lot easier than the traditional loan financing through a bank.

Choosing the right financial institution:

As a business owner, you will have to focus on the choice of your financial institution for this kind of financing. For instance if your requirements amount to millions and you have excellent quality assets such as collectible receivables and inventory that turns, you will be able to access quite a bit more credit than you would under normal bank facilities and at rates that are commensurate with bank finance. For this type of facility, a small business will pay a premium but if you consider that you can access just about all business credit that you need under this type of line of credit plus you have the ability of growing your profits and revenues and take on extra orders, then it is surely worth that premium.

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