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Asset Based Finance

To acquire the operating liquidity you need, turn to asset based finance. This type of financing is not debt financing like many borrowers need to turn to. Small businesses can acquire asset based finances loans but it common for medium sized businesses to turn to them. To acquire asset based finance, you need to take a look at the following prerequisites:

- Your corporate credit rating. Lenders must know that you have a strong credit rating as this shows you can repay your loans in a timely manner. Vendors report your payment history to Duns & Bradstreet. They will create a list of your debt and payment history to provide you with a corporate credit rating that lenders use to qualify you for a loan.

- What is the size of your facility? In order to acquire the money you need the lender will take a look at the size of your facility including your staff, your cash flow projections, and business finances. They need to see a list of things you need to purchase with the money you acquire from the loan.

- Perceived industry risk. Lenders need to take a look at the risk associated with your industry. What are you doing to reduce your risk in the industry?

With asset based finance, you need to front some type of asset that will provide you with plenty of money for your business. Your business assets include your real estate, equipment, machinery, credit card sales, and invoices. Using these assets you can easily acquire the money you need to purchase raw goods and turn them into products for your business.

Lending companies place a large emphasis on your assets and performance as it will sustain the loan in the event that you have some temporary operating losses and other problems. There is no telling what will happen for your business in the future and lenders need to see that you have quality assets to sustain your business. Business Finance to hard to come by but certainly

When you use this type of financing, you are able to acquire up to 90% of your invoice value or 40-80% of your inventory. This provides you with plenty of money to pay for other needs for the business and to prevent cash flow problems.

In order to undergo business restructuring, you need to plan, communicate, and map out a good plan. Take a look at your business plan and understand your goals.

About Author Andy Kyle :

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Article Added on Sunday, August 29, 2010
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