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Digital Currency - Cashless Society and Future of Money

By Ken
  What can replace cash? Due to lots of innovation in this 21st century, nothing seems impossible around the globe. Reality is in front of us, as money will strip off its tangibility and cryptocurrency will appear out as individual units for virtual exchange. This requirement can be fulfilled with the help of Internet, iPhone or any Android-Gadget. Cashless transactions are practiced globally. Various countries like India, Sweden, and Belgium etc... have taken a back step from paper currency. Sweden has an objective to become the first country in terms of cashless economy. Two years ago, demonetization took place in India and most of the population in Belgium does their payment through cards or mobile phone apps. Even, there is a creation of law to limit the cash transactions up to a certain amount. The capability of digital currency Exchange There is a great opportunity for everyone to invest in tokens. The waves related to Cryptocurrency may give an allowance to receive the tokens w
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All You Need To Know About Asset Based Lending Rates

By Ken
Get Asset Based Loans


Asset based lending rates are essential in taking out a loan because it will give borrowers an overview of the total amount to repay per month. When you say asset-based lending, it means that you are borrowing money with your assets as a collateral. So if you intend to expand your business and you need extra cash to undertake a small project, you can use your accounts receivables, machinery, inventory or any business asset as collateral. 

Asset-based loans have easier requirements than small business loans. All you have to do, to qualify for this loan, is to present a tangible collateral to reduce the risk involved in borrowing a large amount of money. Your asset will make up for the losses of the lending company in the event you failed to pay the money you owed. They recover from the loss by selling your asset. 

Asset-Based Lending: How It Works

There are two types of asset-based lending you need to familiarize yourself with:

● Business Lines of Credit: This type of asset-based lending lets you take on the credit line when you need it and pay the interest on the funds you have spent.  

● Business Term Loan: A term loan, on the other hand, requires you to repay the advance including the interest over the agreed repayment period. 

Though both of them may differ when it comes to payment terms, the amount of money they grant will be based on your secured assets' market value. Keep in mind that you cannot just deem any of your property as an asset. To qualify, your assets must be easily disposed in case of a default payment. Depending on the value of your asset, the lender will let you borrow anywhere between 75% to 85% of the assessed value. 

How Are Asset Based Lending Rates Calculated?

Asset based lending rates vary because you have to factor in the business qualification, financing products and lenders. The rates can be anywhere between 7% to 30%. Expect these rates to be higher than loans you take out from banks because asset-based lenders are considered alternative lenders. When compared to unsecured business loans, asset-loans are generally lower because of the tangible asset that mitigates the risk involved. 

How To Apply For Asset Based Lending 

The steps in applying for asset based loans are almost similar to traditional business loans, but the requirements you need to comply with differ. 

1. Evaluate your financial standing

While asset-based lenders are more interested in your business asset's value, it does not necessarily mean that you should allow your business financials to take a backseat. Whether or not some business documents are required, you need to prepare and review them. 

● Business Tax Returns

● Profit and Loss Statement

● Balance Sheet

● Sales Forecast, especially if you have just put up your business 

● Business Bank Statement

2. Identify Your Business Assets

Once your documents are ready, you have to know what your assets and their values are. You have to prove to lenders that you are capable of repaying the loan amount through your assets. These are the common business assets accepted by asset based lenders:

● Inventory List: Be sure that you have a list of inventory ready including its resale value and where the inventory is stored. Keep in mind that in the event of a default, your lender will use your inventory as a collateral by selling it. The resale value will be lower than its original retail value. 

● Accounts Receivables:Collect all accounts receivables aging statement. It should show past due invoices and outstanding invoices with due dates.  

● Equipment and Machinery List: Prepare a list of all the pieces of business machinery and equipment. Be as detailed as possible so the lender can clearly assess the value of each item. 

Once you have compiled this asset information, you can determine if they can be used as collateral for taking an asset-based loan. 

3. Make Sure Assets Are Not Used As Collateral For Other Loans

As part of assessing your application, you have to check if your assets are free and clear. This means that they are not used as collaterals on an existing loan. 

4. Complete Loan Application and Submit Documents

Supply the necessary information and submit the required documents. Some lenders may require you to have your business financials audited by another agency before they proceed with your application. You can clarify this with the lender before you continue with your application. 

5. Review Your Offer

Take the time to review the agreement before you sign any contract. Paying due diligence can save you from any future problems you may encounter. 

6. Conduct A Field Audit

An auditor will meet you in person to find out whether or not you have the capacity to pay. They will audit your assets including your accounts receivables and other physical assets. 

7. Wait For Approval

Once the lender is satisfied with the proof of asset you presented, they will approve your request for extra funding. 

Be sure to weigh your options and always take the asset based lending rates from different firms into consideration. Asset based loans are less risky because of the collateral you offer, but make sure to do your research. Not all lenders have reasonable offers so it is better to do your own homework before you commit to an asset based lender. 

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