Asset-based financing


Also found in: Acronyms.

Asset-based financing

Methods of financing in which lenders and equity investors look principally to the cash flow from a particular asset or set of assets for a return on, and the return of, their financing.

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 ?
Asset-based financing is typically structured as a revolving line of credit and secured by a company's accounts receivable, inventory, equipment, and/or real estate.
He added that borrowers are also driven to asset-based financing structures because "they like the efficiency of the financing," and that there is little or no float at the end of each quarter.
Asset-based financing allows assets to be leveraged from within a target business, offering a highly flexible financing option that can provide the necessary capital required to complete the transaction.
From his perspective, he said he's seen a marked increase in the number of home furnishings companies turning to asset-based financing. HFN spoke to Lucas about the financial climate that is driving this trend.
Factoring--a method of asset-based financing in which receivables are purchased or used as collateral--can provide immediate cash.
In 1992, he joined Gordon Brothers and founded GBFC a specialty commercial finance company focused on asset-based financing to retailers.
White Oak Asset Finance, GP (WOAF) provides asset-based financing solutions including invoice discounting, supply chain finance and inventory finance to small- and middle-market companies throughout the United States.
Cattles Invoice Finance in Birmingham helped structure the deal as well as providing nearly pounds 1 million in asset-based financing.
In another case, a company obtained asset-based financing for the buyout of a $40-million distribution company and was able to reduce its loan by 40 percent within 10 months after the transaction by reducing inventory levels significantly below the historic precedent.
Bibby Financial Services (BFS) is supporting Houston-based United Plastics Group (UPG) with an asset-based financing facility, the company said.
'Bibby Financial Services is a leading finance company known for our superior customer service and ability to provide large factoring facilities and asset-based financing at competitive rates,' said Barry Kastner, Bibby Financial Services executive vice president.