801-718-5312 info@kenbry.com

A business can run into financial difficulties for a variety of reasons. Whether you are dealing with a period of slow sales or simply are not seeing the access to working capital that you need, you may find it useful to take a look at alternative financing solutions when you need assistance. Since there are countless paths you can wander when it comes to financing a business, focusing on a specific category of finance will make your search much easier. Asset-based lending solutions are a great example of services with a lot to offer. 

What Is ABL?

Understanding how to borrow based on your assets is your first step toward success. Basically, this type of financing allows business owners the opportunity to secure necessary funds for their companies by putting forth collateral of a particular value. Examples of assets often used in such arrangements can include real estate, account receivables, and equipment. In order to see the best results from your efforts, it is important that you take time to find a solution that is geared toward the exact problem you are currently facing. 

Invoices as Assets

As mentioned, account receivables can be used as an asset when you are securing specific asset-based lending options. When customers are not paying in a timely manner for goods and services you have provided, it can lead to major setbacks for your company. Instead of waiting around for the clients to make payments, you can sell the qualifying invoices to a lender. A portion of the value is given to you as an advance, then you receive the difference after you pay a fee and the lender is able to collect the full debt from your customer.

Understanding the Fine Print

Though alternative financing services can prove advantageous for many reasons, you need to think through the details before you make any assumptions. For example, you must consider the fees attached to the services. With invoice factoring, lenders often take a significant chunk of change from the value of the receivables as payment. If you do not factor this expense into the equation, you might be surprised to learn that you will not be seeing anywhere near the amount that you had initially anticipated. Be thorough when researching services and it can make a world of difference in your budget. 

There are many angles to consider when it comes to asset-based lending arrangements. As long as you give yourself time to understand the services available to you and what is expected of borrowers, you will have no trouble discovering a fit that works for your company.

Kenbry Capital LLC offers ABL solutions to businesses across every industry. Contact our offices today to get the financing you need.