We Deliver The FUNDS
We Deliver The FUNDS
Financing & Asset Based Lending
0.69% to 1.59%
.png)
We Attract Clients That Experience:
What is asset based lending?
Asset-based lending (ABL) is a type of financing that allows businesses to secure loans using their assets as collateral. These assets can include accounts receivable, inventory, equipment, or real estate. ABL provides companies with access to working capital based on the value of their assets, helping them manage cash flow, fund growth, or handle unexpected expenses. It’s an ideal solution for businesses with significant assets that need flexible financing options.
Accounts Receivable Financing is our Business
Fast Approval Process
.svg)
3 to 5 Day Initial Setup
Free Invoicing Software
Accounts Receivable Financing is our Business.
Fast Approval Process
3 to 5 Day Initial Setup
Free Invoicing Software
Are You Looking For Flexible Approvals on Asset Based Lending?
Have you exhausted your efforts at the bank?
1st Commercial Credit offers asset based lending for companies that need to maximize their borrowing capacity using accounts receivable financing and inventory as collateral. Receivable based financing combined with inventory finance has become a useful tool for many under capitalized businesses.
Asset Based Lending Verses Bank Financing
Unlike traditional bank debt that relies heavily on balance sheet ratios and cash flow projections as loan criteria, 1st Commercial Credit will evaluate a client's business assets as its primary focus to establish the borrowing base. The result is usually far greater borrowing power than can be achieved from a traditional cash flow banking approach due to our expertise in industry specialization.
The fact is banks prefer to lend on stationary tangible hard assets, and occasionally inventory and receivables are considered as part of the borrowing base but at a low advance rate. 1st Commercial Credit can offer higher advance rates due to our experience in receivable valuation.
In the event where the client already has a bank line of credit, an Inter-creditor agreement is made between the bank and 1st Commercial Credit where the receivables are assigned to 1st CC and therefore allows the client to borrow at higher advance rates.
Asset Based Finance Businesses Benefits
The majority of our prospective clients are under capitalized companies that have good performing receivables and are growing faster than their cash flow intake. Asset based financing works well with manufacturers, distributors and service companies with a leveraged balance sheet whose seasonal needs and industry cycles often disrupt their cash flow.
Asset Based Lending is Currently a Major Source of Funding for Many Companies
Asset Based Lines of Credit are main attractions in today's competitive business world with fast and steady funding provisions. Since they supply a continuous flow of cash by means of revolving lines of credit, they provide financial support and stability to the day-to-day operations of their commercial borrowers. Each borrowing company's credit line is determined by the combined worth of its assets. These assets may include accounts receivable and inventory, business equipment, manufacturing machinery, certain contracts with recurring revenue, or personal assets of business owners.
.jpg)
.jpg)
.jpg)
The Pre-Approval Process for Asset Based Financing
In order for a client to be approved for asset based financing, the business must have several conditions in order to apply.
Sales Revenue & Parameters
1st Commercial Credit has various funding programs for businesses averaging monthly sales revenue from $2.5 Million a month to $10,000,000 a month. The structure of an asset based financing facility will depend on the credit history of the owners, number of accounts, billing cycle, financial status of the applicant, type of industry, master sales agreements, and proof of delivery documentation.
Accounts Receivable Assets
Our funding program must have a core asset of accounts receivable. The business must maintain a recurring invoicing process with the same account debtors and bill under net 60 day terms.
Inventory Assets
We will consider inventory asset financing depending on the clients needs. The borrowing base must stay under 25% of the accounts receivable face value.
Fixed Equipment Asset Finance
1st Commercial Credit can provide the business with Asset Purchase of equipment and refinance the assets at a longer term. This is usually provided by an affiliate lender that specializes in the specific equipment to be financed.
We Attract Clients That Experience:
.jpg)
What Type of Collateral is Most Often Required for Asset-Based Lending?
Acceptable collateral for most asset-based loans (ABLs) includes accounts receivable, inventory, business equipment, and factory machinery. Appropriate inventory may be both finished goods and marketable raw products. In some instances, certain personal assets of business owners may be requested by lenders as collateral.
- Accounts receivable – This is the most popular type of collateral among asset-based lenders, due partly to the liquidity aspect of these accounts. Also, this form of collateral has a pre-set value.
- Inventory takes second place to accounts receivable on the list of collateral most favored by asset-based lenders. This is mainly because inventory lacks the stabilized value and liquidity of accounts receivable. It is necessary for inventory to be sold in exchange for cash to establish value. In addition, inventory aspects like LIFO and FIFO make value assessments difficult. Learn more about Inventory Financing
- Although they are often acceptable collateral for asset-based lending approval, manufacturing machinery and business equipment are usually more helpful for obtaining a term loan. Their worth as collateral is longer lasting and equal to the duration of their useful operation. Currently, trademarks and customer lists also can be used as collateral for some ABLs.
Since both accounts receivable and inventory are renewed throughout the year at periodic intervals, they are in the favored classification of eligible collateral.
.jpg)
Which Businesses Will Benefit From Our Asset Based Lending Program?
The majority of businesses can benefit from using asset-based loans to help with growth and consistent access to working capital. Businesses in the acquisition, expansion, or turnaround stages can find great value in working with asset-based lenders. All companies with assets that include accounts receivables, inventory, or fixed assets should consider an asset-based loan as an alternative form of financing. ABL does not require many years in business, an implacable credit record, and it does not add additional debt.
Asset-based lending is not the right solution for every business. One example is businesses that use a recurring revenue model have no assets due to the nature of their business. Those companies dealing primarily with cash transactions would also not be a good fit.
What are the best industries for asset-based lending?
We offer competitive services for financing and lending to manufacturing businesses every day. Sectors that have a capital-intensive nature tend to be the perfect fit for asset-based lending. If you're a manufacturer or distributor, you're most likely an ideal prospect for an asset-based lender like 1st Commercial Credit. The stronger your collateral reserve is, the more attractive a lender will find your company's situation.
Financing distributors is an easy process for us, and we can give your company immediate access to funds. A vast number of industrial businesses are also thriving with our asset-based loans. Companies in industries with seasonal sales also benefit from the fluidity of an asset-based loan. Long-standing sectors taking advantage of asset-based lending include apparel, retail, staffing, and business service companies that extend credit to their customers.
Asset Based Financing (Rates and Fees)
When exploring accounts receivable financing for your company, understanding the associated costs is essential. At 1st Commercial Credit, we offer competitive and transparent rates, typically ranging from 0.69% to 1.59%. These rates reflect the flexibility and speed of our financing solutions, enabling you to access the funds you need quickly and without hidden fees. Whether you're looking to improve cash flow, cover operational expenses, or seize new business opportunities, our financing options provide a cost-effective way to strengthen your company's financial stability.
FAQ About Asset Based Financing
Accounts receivable financing is a financial solution where businesses sell their outstanding invoices to a financing company at a discount. This allows companies to access immediate cash flow without waiting for customer payments.
This financing option is ideal for businesses across various industries, including manufacturing, transportation, staffing, professional services, and more. Any company facing cash flow challenges due to extended payment terms or growing sales can benefit from accounts receivable financing.
No, accounts receivable financing is not a loan. It is the sale of your invoices for immediate cash. Since it is not a loan, it does not add debt to your balance sheet and does not require collateral beyond the invoices themselves.
