Small business owners struggle to find quick and accessible loans with high approval rates. One appealing option for them is asset-based lending. This type of alternative financing utilizes the hard assets of a company, such as invoices, equipment, and Properties, as collaterals for the Loan.
Business owners will borrow against the assets of their company and lenders will provide them a percentage of the estimated value of that asset. Lenders categorize asset-based loans according to the asset that secures the loan. There are three categories: Accounts receivable (invoice) financing, asset-based loan for equipment, and asset-based loan for properties.
Asset-based lending for properties is the practice of using commercial properties as collateral for a loan. The cash from this transaction can be used for any business project. In case the borrower fails to pay the loan, the lender will seize the property.
Who can apply for an asset-based loan?
More often than not, companies need additional capital to overcome a financial hurdle and move forward with its growth. Asset-based loans for properties can be the source of this capital.
Any company that has properties can apply for this loan. At WeCompete Lenders, we provide funding for all types of small businesses and startups. It does not matter whether you are a rapidly growing company or an undercapitalized business, if you want to use your commercial properties as collaterals, we can find the perfect rates and terms for you. We understand that you are borrowing against your assets to improve your revenues. That’s why we offer the lowest rates in the market.
What kind of property can be used as collateral?
Any commercial property can be used as collateral for asset-based lending. Personal assets such as family homes and personal lots, and even mortgaged assets can be used to secure the loan; however, a smaller percentage of the asset value will be awarded.
What are the advantages of asset-based loan for properties?
Alternative loans can be used to finance all sorts of business projects. Some types of alternative financing, such as equipment loans and construction loans, target specific business problems. Asset-based lending for properties is more versatile.
Here are some advantages of this loan:
Funding - WeCompete Lenders provides 90% of the appraised value of your commercial property. We accept applications even up to the 5th position because we like to bank on the potential of your business.
Financial flexibility - Asset-based loans for properties provide you with financial flexibility. This loan is ideal for startups that have yet to establish their business credit and for small business owners that have been rejected because of a bad credit score.
Maximizing the potential of your properties - Properties are assets, but they do not increase revenues unless you rent them out. With asset-based lending for properties, you can fund your projects, use your property, establish your business credit, and improve your credit score.
How do I apply for an asset-based loan?
A lot of companies offer asset-based financing, but it is not so easy to convince these lenders to provide capital for a newly established business. Here are a few tips that can help you prepare for an asset-based loan using your properties:
Know the current value of your property. Knowing your market value gives you an idea of how much a lender can offer you and also prevents you from getting cheated. The fastest way to figure this out is to look for similar properties in your area and compare their market value with yours. You can verify this by hiring a professional appraiser. Lenders have their appraisers.
Provide the lender with documents that support your ownership of the property. That includes tax payments for the past few years, land titles, deed of sale and appraisal forms. Having these on hand can get you the approval faster. Proof of ownership are documents that all lenders require.
It is easier to get approved for an asset-based loan if the principal amount is large. The fees for processing asset-based loans for properties is the same regardless of the amount of the loan. This means lenders are more likely to approve your loan if you avail of the max amount of your asset. If you need a small loan, you can try other financing options.
The easiest and quickest way to apply for an asset-based loan is by checking out our website and sending in an application here.
Maximize the potential of your assets! WeCompete Lenders has provided capital for hundreds of businesses that used their properties as collaterals. For questions about the loan and the application process, you may contact us at (844) 516-0633 or send us an email at [email protected].
