Asset-backed finance allows a business flexibility to use its assets to secure loans or raise capital using assets such as accounts receivable, inventory, equipment, or real estate as collateral. This method of finance allows companies to quickly access capital with potentially lower interest rates than unsecured loans, improving cash flow and funding various business needs. The process involves making an application, an asset valuation, an approval with set term followed by the loan disbursement and regular loan repayments.
Short-Term Asset Backed Finance
This finance option is typically used for :
- Business Expansion
- Stock
- Business Refinancing
- Projects
Minimum Requirements
Financial Position
The company must have adequate collateral in the form of paid-up fixed assets (preferably property) to use as security.
Interest Serviceability
The company must be able to pay the lender interest every month on the loan.
Minimum Turnover
The company must have a minimum turnover above R1 000 000 per annum.
Transaction Duration
The company must be able to repay the loan within 2 – 12 months.