Asset financing can be offered based on a client’s balance sheet assets, including short-term investments, inventory and accounts receivable, to borrow money or get a loan. The client would be expected to provide security based on these assets. This differs considerably from traditional financing, as the client must simply offer security over some of its assets to quickly get a loan.
Asset financing is most often used when a client needs a short-term funds or working capital. Often the borrower will pledge its accounts receivable; however, the use of inventory assets is also an option in the borrowing process and is becoming a more popular and common choice.
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