Tips for Borrowing Against Assets Other Than Accounts Receivable

Successful businesses understand that when their customers are looking for their service or product, they will generally go with the business that stands out or offers what most others don’t. When you are looking for working capital or line-of-credit financing for your growing business, you should do the same.

Allied Financial Corporation sets itself apart from traditional accounts receivable lenders by letting you add asset-based financing to your accounts receivable loan to get the funds you need when you need them.

You’ll begin with an accounts receivable line of credit which is secured by your company’s accounts receivables. This may be all you need. However, if you need additional funds, you can increase your line of credit by adding financing that is based on your assets; machinery, equipment, inventory, and property.

The following tips will help you prepare to use your assets for funds:

Identify Your Assets

Your business assets are anything that your business uses to trade and operate. Assets can be tangible (equipment), intangible (reputation), or intellectual (patents.) However, for an Allied Financial loan; we will look at your tangible assets when considering your financial needs.

Tangible assets can include:

Machinery

Equipment

Vehicles

Stock/Inventory

Keep Detail Records of your Asset’s Worth

Maintain meticulous records of your assets. For equipment, machinery, or vehicles, keep up-to-date records for age, make, model, serial numbers, registrations, service records, insurance listings, cash value, etc. We use this information to help determine a fair value to loan against.

For stock and inventory, maintain current inventory records and show proven inventory turn-over rates during both peak and slump periods. This shows us that you are successful in what you sell or service. You’ll also want to keep regular reports on inventory values to show that your product or service can be sold at a price sufficient for loan repayment.

Protect Your Assets

Keep your equipment, machinery, and vehicles well maintained. Be able to provide documented service records for routine scheduled maintenance.

Insure your assets. Verify that your current business insurance adequately covers all assets you plan to borrow against. If any of your company equipment or property is damaged or destroyed, you must not only factor in the cost of replacing the items, but also the business income you will lose because of the equipment not being available.

While it may cost a little more, get replacement-cost coverage. Ask your insurer for a business insurance consultation to ensure both your business and your assets are properly insured.