Asset-Based Finance

Asset-Based Finance

The practice of making a loan secured by an asset. While, in theory, many loans are asset-based mortgages, 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 used in the conduct of their businesses as collateral, such as inventory. As with all secured loans, asset-based loans have lower interest rates than unsecured loans. The practice is also called asset-based lending.
References in periodicals archive ?
Citibank, NA (NYSE: C) has said that it has hired a senior vice president for asset-based finance in Chicago.
In a UK-wide survey of 2,000 SMEs, including over 103 from across Wales, Lloyds TSB Commercial Finance questioned firms about their understanding and awareness of a range of sources of finance including overdrafts, Governmentbacked schemes like Funding for Lending and asset-based finance products such as factoring, invoice discounting and asset-based lending.
Advantages of asset-based finance The growing popularity of asset based finance products - invoice discounting, factoring and asset based lending - is largely due to the fact that these products can provide unique benefits and added support that traditional loan or overdraft structures do not offer.
A LEADING Tory campaigner is calling for regulation over asset-based finance firms after his company collapsed into administration.
ASSET-based finance could come into its own as the world financial crisis worsens, a Midland lawyer has predicted.
Fleet's Wholesale Banking division provides commercial lending, syndications, leasing, cash management, asset-based finance, foreign exchange and interest rate derivatives to corporate clients.
The firm had recently hired Jeff Royston as a senior vice president with the aim of expanding the bank's asset-based finance team in Los Angeles.
Steve went on to highlight a core advantage of asset-based finance at a time when some customers drag their heels when it comes to settling invoices.