5 Benefits Of An Equipment Asset Based Loan To Reduce Credit Liability

Equipment asset based loans are excellent tools for businesses to obtain working capital. As a business owner, consider an equipment asset based loan to reduce your business’s credit liability. Typical loans require contractual agreements and personal collateral. Equipment asset based loans secure your equipment as collateral. This reduces your personal risk and provides you access to flexible financing plans. Continue reading this post to learn the benefits of an equipment asset based loan to reduce business credit liability.

Offer High Borrowing Base

Equipment asset based lenders generally offer high borrowing bases. Typical cash flow loans base your borrowing limit off of your credit history. Asset based loans on the other hand, assess your borrowing limit from the value of your equipment. For many asset based loans secured by equipment, borrowing bases range from fifty-percent to seventy-five-percent. Lenders may offer lower rates by factoring various depreciation methods into the value of your equipment. As a business owner, this allows you to quickly to access a significant value of your equipment. Simultaneously, it allows you to access that money while still utilizing the equipment. Utilize an equipment asset based loan to reduce overall liability for your business.

Consolidates Liability

Equipment asset based loans consolidate liability for your business. Traditional loans often utilize personal effects as collateral. In addition, failure to pay these loans significantly harms the borrower’s credit history. Equipment asset based loans combine those liabilities into pieces of equipment. Failure to pay these loans results in the repossession of equipment. However, it does not reduce your credit score or borrowing power. These loans are able to cover a variety of  large and small investments in equipment. Utilize equipment asset based loans to consolidate liability and reduce risk for your business.

Provides Cash Upfront

In comparison with traditional loans, equipment asset based loans provide cash upfront. This grants your business quick access to funds. As a business owner, fast access to working capital it crucial. Through this, you guarantee you are able to accomplish a variety of tasks quickly. Utilize equipment asset based loans to provide you upfront funds and reduce your business liability.

Reduce Personal Risk

Using an equipment asset based loan reduces the personal risk involved with accepting a loan. Many cash flow loans require the borrower to sign a contractual agreement before receiving funds. However, equipment asset based loan lenders are only concerned with the value of your equipment. This allows you to accept equipment asset based loans without harming your own borrowing power. As a business owner, separating this business liability from your personal risk is crucial. Without adequate separation, you may be unable to rent a car or buy a house due to debts stemming from your business. Utilize an equipment asset based loan to reduce personal risk and business liability.

Develop Flexible Financing Plans

Equipment asset based loan lenders are additionally able to offer flexible financing options. Since these lenders do not represent the bank, they have more freedom to negotiate with you. They are not constrained by institutional restrictions and deadlines, as they are most commonly private lenders. Through this, these lenders are generally able to offer you lower interest rates and longer loan periods. This allows you longer time to repay loans. In addition, it allows you to accept longer loan periods without being encumbered by interest payments. Utilize equipment asset based loans to develop plans to reduce business liability.

Equipment asset based loans are key tools in helping businesses access money. As a business owner, these loans offer you a high borrowing base on the value of your equipment. Lenders create a borrowing base and interest rate based on depreciation algorithms and risk assessment tools. They consolidate your overall loan liability into pieces of equipment. These equipment asset based loans provide borrowers with cash upfront. By securing equipment as collateral, they reduce your overall personal risk. Moreover, lenders help businesses develop and conduct flexible financing plans. Refer to this post to understand the benefits of an equipment asset based loan to reduce business credit liability.