Asset-Based Loan is a loan secured by a blanket lien against all the assets of a company. The loan may be funded as one or both of two different types of loan: 1) a line of credit against eligible commercial accounts receivable, and 2) a term debt loan. Of the two, the line of credit against eligible commercial accounts receivable is the favorite of the ABL lender. This is the typical bank loan- the bank wants to control all the assets of the company in return for its advance. The bank will typically seek to maximize its collateral while minimizing its advance, so as to have a better outcome in the event of a borrower’s bankruptcy. Non-bank lenders often lend more on eligible accounts receivable than do banks, and for a longer period of time. Non-banks are often more flexible than are banks when it comes to the structuring of a company’s finances, welcoming other funders to finance other assets in which they are more expert than the ABL lender. This means that you can enjoy greater amounts of financing using non-bank financing than you could, using a bank. Non-banks are generally a far more stable lenders than are banks, less likely to call their loan, and more tolerant of a faster growth rate than is a bank.

Accounts Receivable Line is a revolving credit line against a company’s eligible commercial accounts receivable only. It’s also referred to as a working capital loan, the borrowed funds being used for short term uses such as payroll, paying vendors, the utility bills, building rent, and so on. The money is paid back as business customers pay for their invoices. Banks secure these loans with all the assets of the business (sometimes excepting the business real estate), even assets they are not also lending on. The non-bank lenders generally use the eligible commercial accounts receivable only as collateral, leaving the other assets of the company available as collateral for other borrowings. Thus, on accounts receivable lines of $2,000,000 and more, your non-bank funded eligible accounts receivable revolving credit line will likely provide more cash on the same eligible receivables, often with more favorable terms and conditions than a bank. This means you get more control of your business than you could with a bank loan. If your company is going through spirited growth, you would take the non-bank funded revolving in order to be more profitable than you could be with a bank loan.

Term Debt Loan is a single loan made to a company, which is paid back over a term longer than one year. Principal and interest payments are usually made monthly, and can be set up with either fixed or floating interest. Although the loan can be used for a variety of purposes, its function is to finance the growth of the business. A non-bank funded term debt loan may be for a greater number of dollars than one from a bank. More structures are available from non-bank lenders, including versions of subordinated or mezzanine debt for qualifying companies.

Equipment Sale-Leaseback provides you with a cash infusion by unlocking the equity a business has in its assets by converting equity such as in their machinery and equipment into cash. This arrangement allows you to raise capital while retaining the use of the assets. A sale-leaseback can offer the creation of significant sources of funds that can be used for varied purposes including paying off a specific lender, as working capital, to buy-back capital stock, buying out a partner, or upgrading assets. A sale-leaseback arrangement is accomplished by conveying the title of the company’s assets, at an agreed upon value, to a financial institution in exchange for a lump-sum payment. Benefits of a sale-leaseback can include improving liquidity, working capital ratios, return on capital and return on assets.

Factoring Facility will purchase the receivables rather than lending on a company’s eligible commercial accounts receivable. A factoring facility is far easier for a company to get than is an accounts receivable line. Once funded, the factoring facility is far easier (and sometimes is more economical) for a company to use and maintain than is a revolving credit line. Some factoring companies go beyond the basic purchasing of receivables, and will offer you a complete professional commercial credit department function to go along with it. Your qualifying company will be able to equal many of the largest enterprises in the area of commercial credit and accounts receivable effectiveness, by outsourcing this credit function to any of several factoring companies. Among other benefits, this can enable you to sell your products and services to business customers all across the US, (and, if you wish, Canada as well), without fear of bad-debts. Can your bank offer this?

Purchase Order Financing often happens when a small business has an order for a product or service that is too big for it to fulfill, because to do so would require more cash than the company can borrow from a bank. For those situations that qualify, a purchase order financer will advance the cash necessary to fulfill the purchase order, and a factoring company will receive the customer’s payment. This is a very risky loan, and would be inappropriate for a bank to even consider. Yet, thanks to non-bank funders, you will be able to use it regularly.

Bank Replacement Financing is not a criticism of banks, but is rather a commentary. The financing needs of growing businesses far exceed the capability of banks, given that banks are lending depositors’ dollars. Many non-bank financing products greatly exceed the capability of bank loans when financing many of today’s small businesses.

Working with Capital for Business, you will be able to replace bank financing with a selection of non-bank financing products, enabling companies to perform and grow as never before. In time, your income statement and balance sheet will show the difference.   

Turn Your Equipment Into Cash Quickly!

If you are interested in a small business loan, consider a business equipment loan.

Receive cash for the equipment you already own, without having to give it up.

• $25,000 - $250,000
• No appraisal costs or application fees.
• 640 minimum credit score required.
• Annual business revenue must be >$300,000.
• Must be in business for 2+ years.
• Limited documentation required.
• Uses equipment that is free and clear under the company.
• Loan-to-value 50% - 80% for most equipment.
• All types of equipment, excluding titled vehicles.

Want more details? Contact info@cfbfinancing.com