While the end of confinement rhymes with the end of government aid linked to the COVID-19, entrepreneurs must at the same time face the increase in supply costs, the rise in salaries to keep their talents in this context of labor shortage in addition to the issues of succession or business succession. All these situations put pressure on the company’s finances.
There is a financial solution that allows you to optimize cash flow and thus avoid using the line of credit or line of credit granted by the bank to its fullest. Asset Based Lending (ABL) loans (such as receivables, inventory, equipment, real estate) offer maximum flexibility to the company, whether it is to accommodate rapid growth, refinancing or a turnaround. Asset-based loans are also an option of choice for succession planning or during a merger or acquisition.
It is a strategic alternative that allows the company to take advantage of its assets to access additional working capital and thus retain all the latitude necessary to advance towards the achievement of its objectives. As the name implies, this type of financing is based primarily on the value of the assets offered as collateral.
Unlike a bank loan, which is based primarily on the company’s performance, an asset-based loan is not limited by a number of financial ratios or covenants related to the company’s credit rating.
If you think that an asset-based loan is a solution for your business, don’t hesitate to contact one of our experts at EC2 in order to be properly guided in your approach.
