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Merchant-advance

Asset Based Lending / Factoring

An asset based loan can be a useful tool for any company with assets.  Accounts receivable, inventory, real estate, and machinery, equipment, and even intellectual property are examples of assets that can be used to secure a loan.  

Like asset based lending, factoring also leverages accounts receivable. Factoring not only advances funds, it also includes a service: collections. The factor/ lender in these scenarios buys the accounts receivable at a discount and then is responsible for collections.  This is very useful tool for any business that is paid 30, 60 or more days after goods or services have been delivered. Factoring can give an apparel or furniture company the funds to buy raw materials while waiting for a customer’s payment. It can give a staffing company the money to pay employees for services rendered while waiting for payments from customers. Another benefit of factoring is that the lender will examine the credit worthiness of the customers rather than the business itself.  If a business does not qualify for a traditional bank loan, this is an excellent alternative solution.