What is the difference between asset-based lending, revolving credit facilities, and commercial finance?
Asset-based lending refers to loans secured by a wide variety of assets. Businesses can borrow money using the liquid, current assets of the company (such as accounts receivable and/or inventory) or the fixed assets of a business (such as plant, property, and equipment) as collateral. Asset-based lenders rely on the value of the underlying collateral to minimize the loan’s credit risk. Asset-based loans also can include equipment loans and real estate mortgages. Commercial finance is the term most commonly affiliated with the industry group of lenders that provides all types of asset-based loans to business and commercial borrowers. Asset-based lenders are sometimes referred to as secured lenders.
Related Questions
- Credit is not my real business; I only offer finance facilities to remain competitive. Doesn the responsibility lie with the company actually lending the money?
- What is the difference between asset-based lending, revolving credit facilities, and commercial finance?
- What is the difference between Prime Lending and Special Finance or Sub-prime auto loan?
