Asset-Based Lending (redirected from Asset Based Lending)

Asset-Based Lending

The practice of making a loan secured by an asset. While, in theory, many loans are asset-based mortgages are a prime example the term most commonly applies to loans secured by something unusual, such as accounts receivable or intellectual property. Businesses take out most asset-based loans and pledge something that is used to conduct their businesses, such as inventory, as collateral. As with all secured loans, asset-based loans have lower interest rates than unsecured loans. The practice is also called asset-based finance.