There are many options that you can consider while you apply for financing for your company. One option that can benefit both you and your organization is asset-based lending. This type of funding can protect your personal belongings and is simple to qualify for despite your credit rating. Here are a few reasons why you should consider utilizing your business collateral for your loan.

Keeps Your Personal Property Safe

When you apply for a loan for your business from your bank, they will require that you pledge your personal property or accounts to secure it. This can be stressful since you could lose your collateral if your company has a slow period. When you choose to apply for asset-based lending, you utilize the equipment that your organization owns instead of your own home or car. While it can slow your production if you were to turn that item over to the financing organization, it can be easier to replace when your revenue increases. Be sure to ask the representative that you are working with about this before you sign your paperwork.

You Can Qualify With Poor Credit

It can be a challenge to get a loan if you or your company has struggled with your finances in the past. One of the primary items that a bank will check during your application process is your credit rating. Asset-based lending will approve you for assistance despite what your score is. This is also a great option if you are just starting out in your industry and have yet to achieve the length of time in business or the cash flow that an institution requires.They take into account the amount of equipment and capital that you are willing to put down to qualify for the funding that they offer. 

Allows You To Use Your Revenue For Capital

You want to save your profits to put towards your daily expenses instead of major projects. However, incidents happen that will drain your cash flow quickly. Depending on how long you have been in operation or what your credit score is, you may struggle to get approved for a loan to cover this. Asset-based lending allows you to utilize what you already own as a business to secure the money that you need. The value of what you use as collateral will be the deciding factor for your application. It will make it easier for you to handle an emergency or expand your company.