What is asset based lending?
Asset-based lending also referred to as ABL is a financial service where the lender gives working capital or term loans to the client based on the value of the company’s assets.
These assets can be real estate, equipment, inventory, or anything else of value owned by the company. ABL is faster than traditional business loans, has flexible terms and can offer higher funding amounts than traditional lines of credit. For businesses struggling with liquidity, asset based loans are one of the best financial options on the market.
ABL is best for businesses who:
Need large amounts of funding
Have collateral to leverage
Have capped out traditional options
Need funding faster than a bank or a loan for a short-term
What industries use Asset Based Lending?
Asset based loans are a viable financial solution for almost any industry and work well for both small businesses and large. Asset based loans are most commonly used by business to business (b2b) industries, because these companies often have much more collateral than consumer serving industries. Here are some examples of industries we have done ABL deals with:
Oil and Gas
Distribution & logicistics
Real estate development
What are the benefits of Asset Based Loans?
There are tons of benefits of Asset Based Loans, but here are some that our clients consistently share.
Unlock capital tied up equity
Increase your cash flow
Access more capital than traditional financing can offer
Improve your balance sheet
What types of collateral can I use for an Asset Based Loan?
Asset bands loans can harness a number of types of collateral to provide cash flow. At Crédito Real USA Business Capital we primarily use the following types of collateral:
Commercial Real Estate
Commercial real estate, also called CRE, is the most common asset that we work with when providing an Asset Based Loan at Crédito Real USA Business Capital. Often property or land is used to provide additional liquidity onto of another loan. Sometimes these loans work as a bridge loan, but no matter how it is used, ABL customers are able to increase their cash flow when development stalls or more is needed.
Machinery and Equipment
Hard assets lending allows borrowers to convert capital tied up in machinery and equipment into cash. The type of equipment, age, and condition, and market demand for resale all play a role in how lenders value assets and these factors also play a role in determining the advance rate.
Business owners are often sitting on valuable inventory, without any capacity to collateralize the asset for cash flow. Asset based loans help small businesses harness this in the form of an Asset-based Loan. When applying, an Asset Based lender will assess the value of the inventory and in the case of a default sell it to recover the loan. Loans based on inventory have variable advance rates that depend on factoring like location and type of storage, how easy it is to resell, and the type of goods. Most companies will also be required to have an inventory system for managing inventory and keeping track of the assets at all times.
How does the Asset Based Loan process work?
The application process to apply for an Asset Based Loan is paperwork intensive and requires a business owner to have all of his/her financial information organized. Outside of the standard documentation an Asset Based Loan is going to require a detailed asset list so a lender can understand the collateral that’s available to them.
Fill out an application
Complete our asset based loan application which will provide us information about you and your business.
After your application has been approved, identify potential collateral like real estate, equipment, and inventory.
Credit Review & Structure
Crédito Real USA Business Capital will review the full and create a structure that meets your needs.
Once the loan is approved, and final paperwork is signed, funding will be transferred.
What documents are needed to apply for an Asset-Based Loan from Crédito Real USA?
At Credito Real we typically ask for the following when applying for an Asset Based Loan
A valid photo-ID
6 months of bank statements of all accounts used for your business activities.
Our Credit application
Most recent 3 years of tax returns for personal / business
3rd Party Appraisals (if available)
Business Financial Statements
What factors determine rate and approval?
Property value based on recent appraisal
The quality and size of your clients.
Previous payment history with your clients
The frequency at which your inventory churns
The profitability of your business
The age and quality of your machinery and equipment
Your business and personal credit score
Here's what some of our customers are saying.
Crédito Real provided me the cash flow and helped with payroll to grow my business. Now, big businesses are more willing to work with me because I have the capital and workforce to keep meeting their needs and projects.
I would recommend Crédito Real to other companies because it will give you the possibility to expand your business and run it in the proper way. They are very easy to work with because they understand the business.
Visit Us in San Antonio, Texas
Credito Real USA – Business Capital
103 Biltmore Street, Suite 210
San Antonio, TX 78213, United States
Mon: 9:00 AM – 5:00 PM
Tue: 9:00 AM – 5:00 PM
Wed: 9:00 AM – 5:00 PM
Thu: 9:00 AM – 5:00 PM
Fri: 9:00 AM – 5:00 PM
Crédito Real USA Business Capital’s San Antonio location can be found on the north west corner of the intersection between Loop 410 and Blanco Road. To access our location you need to be heading west on the access road of 410, past Blanco and will turn on Biltmore Road. You will see our building on the left and once you arrive, head inside and immediately upstairs to find our office. You will know if you are in the right area if you see Guajillo’s The Shortcut to Mexico and Kobe Steakhouse.