Asset Based Loans

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Asset Based Loans are a common type of financing tool that use a business’s assets as collateral to secure them funding. A business does not need a high credit score and stellar financials to qualify, they just need adequate assets that can be used as collateral.

Leveraging a business’s assets allows them to maintain the liquidity that is required for growth. For struggling businesses, an Asset Based Loan can facilitate a much needed cash infusion.

What Are Asset Based Loans?

An Asset Based Loan, as it sounds, is a loan that is backed by a borrower’s assets. Many kinds of collateral can be used, and certain asset classes will hold more value than others:

Real estate
Equipment
Accounts Receivable
Inventory
IP (Intellectual Property)
Marketable Securities

Use of collateral makes Asset Based Loans less risky for lenders than unsecured loans, and therefore lower interest rates are offered. Assets that are more liquid, like accounts receivable, will afford better terms than non-liquid assets like industrial equipment.

Rates: Starting at 7%
Funding Amount: $10K - $5M
Funding Term: 3 Months - 3 Years
Speed: 3 - 6 Weeks

How Do Asset Based Loans Work?

The funding amount of your Asset Based Loan depends on the value of your business’s collateral, this is called the ‘loan-to-value-ratio.' For assets that are illiquid, like inventory and equipment, the loan to value ratio can be as low as 50%. Assets that are more readily liquidated, like accounts receivables, will command a higher loan to value ratio of between 70% - 90%. This is how the loan to value ratio is calculated:

Loan-to-Value Ratio = Loan Amount / Asset Value

Where:

Loan Amount = The maximum amount we are willing to loan your business.
Asset Value = The market value of the assets designated as collateral for this loan.

What Are The Benefits Of Asset Based Loans?

If your business is asset-rich, you can access larger borrowing amounts with an asset based loan than you could with other types of unsecured loans like Business Term Loans or Business Lines Of Credit.

Asset Based Loans have lower requirements for a business’s credit score and past financials than many other options have. Receiving approval for an Asset Based Loan is also fast, taking just 1 – 3 business days.

What Are The Downsides To Asset Based Loans?

Favorable terms for Asset Based Loans are contingent on your business’s assets being of high enough quality for use as collateral. Some assets will not qualify if we are not confident in their current or future value.

The main downside to Asset Based Loans is that your assets may be liquidated in the event you are unable to make a payment.

Who Qualifies for Asset Based Loans?

Approved businesses generally met the following criteria:

Annual Revenue: $120+
Credit Score: 525+
Time In business: 1 Year+

How To Apply

Our application process is fast and easy, taking just a few minutes to complete, and funds can appear in your bank account in as few as 1-2 business days from approval. Here is how to apply:

Step 1: Contemplate Your Needs

Before you apply, make sure that the funding program is the right solution for your business's needs. Consider whether you will be able to use the funds for your desired purpose, and if the repayment structure is conducive to your cash flow. Take your time to determine the amount of funding your business will most benefit from.

Step 2: Collect Your Documents

Here is what you will need to submit with your application:

A valid driver’s license
1 voided business check
Past 4 months of bank statements
Past 4 months of credit card processing statements

Step 3: Fill Out Our Online Application

To start the application process, give us a call or fill out our short online application. We will ask you to provide some basic information, along with your desired funding amount.

Step 4: Speak to a Representative

Once you apply, a representative will reach out to you, so make sure you have all your documents ready from 'Step 2'. The representative will explain the repayment structure, rates, and terms you qualify for. This will ensure that there are no surprises or hidden fees during repayment. Once you decide, you will be given a final application to submit along with your documents.

Step 5: Receive Approval

If you’ve been approved, you’ll hear back from us within 24 hours. Funds should then appear in your bank account in 1-2 business days.

What If I’m Declined?

Your application may be declined if your business’s cash flow is insufficient at the time of your application. This product places an emphasis on monthly revenue, so applicants with strong sales in the previous 4 months are more likely to receive approval than those without. You may also be asked to provide statements going back farther, even from a previous year.

In some cases, we may conclude that taking on more debt would do more harm than good for your business. In this case, we might recommend a different, more affordable business financing tool. At Signet Capital Group, we can help you explore your options and point you in the direction of the most sensible choices.

Complete the application

Fill out some basic information about your business for a quick decision

Approval in less than 2 hours

We match you with a funding solution that best fits your needs

Same-day funding

Be approved and get the funds transferred to you in as little as 2 hours