Asset-based lenders provide creative business financing solutions for companies that don’t qualify for traditional bank loans and credit lines, whether this is due to their start-up nature, rapid growth, or financial ratios that don’t measure up to a bank’s requirements. These solutions typically include asset-based loans, accounts receivable financing and factoring.
In 2009, factors provided $140 billion in financing, up slightly from the year before, reports the Commercial Finance Association. And total outstanding asset-based loans increased 1.25 percent in the fourth quarter of 2009.
Today's lending environment poses many challenges especially to small business loans owner. Just a few short years ago, many small business owners were flush with cash and revenues seemed to be steadily increasing. As a result of good cash flows, many business owners neglected their banking relationships and selected to self finance capital acquisitions in lieu of debt.
