Need a loan for your business but don’t want to go to a bank? Today, many borrowers are looking to non-traditional funding for their cash flow needs. AllFi Solutions can help.

Business property can be anything from commercial real estate to other assets owned by the company. Obtaining the capital needed to expand, reinvent, or start a business from a bank requires good personal and business credit.

Banks require most companies to show long-term financial history, something many small businesses don’t have in their beginning or expansion phases. For banks, business property loans are all about your current financial condition.

Asset-based lenders provide growing companies with more unconventional business funding options. Instead of focusing on your financial history, these lenders provide property loans to businesses based on the current financial condition of the brand.

They place emphasis on the underlying collateral, looking closely at its current performance and sustainability. For these lenders, collateral can come in many unconventional forms, giving small-to-medium sized businesses more funding options.

Unlike traditional lending, asset-based loans are less complicated. Instead of waiting several months for approval, your capital is available within weeks.

Business Property Loans: Banks vs. Asset Based Lenders

There are many reasons small business owners seek loans to start or grow their brands. Some need commercial real estate loans to build, improve, or expand their physical locations. Others require funding to buy other types of property such as operational equipment, goods for sale, and equipment needed to complete contracts and projects.

It’s not unusual for companies to need access to cash for business-related reasons. But for many small businesses, getting a loan from a bank isn’t an option. Each owner’s situation is unique and banks don’t have the flexibility to deal with all of their specific needs. That means borrowers are faced with strict standard requirements that many businesses just can’t meet.

Banks require proof of any disposable funds you may have access to at the time of the application. Your cash flow is examined closely. If it doesn’t meet certain requirements, the bank will not approve you for the business property loan.

With asset-based lending, each situation is approached on an individual basis. That means, for example, that a growing restaurant’s application will be reviewed differently than the established real estate developer’s.

Even if you have no money in the bank, you can still qualify for a business loan to help you finance your company’s growth. Here are some common uses for business loans:

  • Retail, industrial, office property
  • Medical business equipment
  • Multi-unit real estate
  • Purchase business equipment
  • Debt refinancing
  • Buy business-related inventory
  • Hire contractors and staff
  • Reinvest in operational needs
  • Stabilize cash flow
  • Establish capital for upcoming opportunities

How Does Asset-Based Lending Work?

Unlike banks, asset-based lenders consider your accounts receivable sufficient capital for securing financing for small-to-medium sized businesses. No other collateral is required.

The accounts receivable loan is written up as a revolving line of credit for your business. That way, you can withdraw funds only when you need them. Further, these asset-based loans come with no prepayment penalties, so you can save money on interest fees by paying off the debt early.

There are some requirements for accounts receivable loans. You must make a pledge to conserve debt throughout the life of the loan. Businesses must submit monthly financial statements showing there are funds coming in to repay the line of credit.