AccessMyLibrary provides FREE access to over 30 million articles from top publications available through your library.
Create a link to this page
Copy and paste this link tag into your Web page or blog:
Asset-based lending: A creative financing alternative for many cash-strapped businesses. (Selected Topic).
The economic slowdown of the past couple of years has affected different companies in different ways, but one effect that's currently hitting many small businesses right between the eyes is the bank credit crunch.
Non-performing loans at U.S. banks and thrifts were up nearly 17 percent by the end of last September to almost $70 billion, the highest level since 1992, following the savings and loan crisis. As a result, banks in general are tightening the screws on many small business borrowers, often refusing to grant credit to new borrowers or to extend the credit lines of existing customers.
In this type of environment, it's often fast-growth companies that find themselves smack in the middle of the credit crunch. Companies showing annual growth rates of 15-20 percent or more can make a bank nervous, because fast growth can knock the company's ratios out of whack and result in temporary periods of unprofitability.
The good news is that there is a financing alternative designed especially to help companies in this type of situation. Asset-based lending is an ideal source of financing for companies that can't qualify for traditional bank financing due to fast growth or other extenuating (and often temporary) financial circumstances. These may include new and startup firms, firms with heavy seasonal inventory needs, or any business that's financially challenged but has a strong foundation and business plan in place.
Asset-Based Lending Success Stories
A Cartersville, GA-based manufacturer of radius trim, custom windows and doors for new homes found itself in just such a situation last year. President Christy Murray and her husband Robbie bought the business in 1999 and have enjoyed 40 percent growth each year since--but that growth proved to be a double-edged sword.
"Here in the Atlanta area, the housing industry is still booming, and to fuel our growth, we had to max out our bank credit line," says Christy Murray. "But our balance sheet was showing some short-term losses due to our fast growth, so our bank wouldn't expand the line. We knew we'd have to find some way to get more operating capital or else we'd have to shut our doors. Asset-based lending sounded like it might work for us, so we decided to look into it."
- Regional bank impact on asset-based lending
- Magazine article from: The Secured Lender Carmichael, Richard S July 1, 1996 700+ words
...this article will look at asset-based lending trends and their implications from...covered in interviews with asset-based lending management among a cross-section...banks included: (1) how asset-based lending units are best positioned within banks...
- Charter One leads charge of asset-based lending growth.(Charter One Bank)(Brief...
- Magazine article from: Crain's Cleveland Business Cornell, Ryan September 10, 2001 700+ words
Business is booming at the asset-based lending divisions of Northeast Ohio banks as...particularly quick at Charter One's asset-based lending division, which was launched 18 months...the boost in Charter One's asset-based lending activity is because many companies...
- Asset-based lending presents major opportunities for profit. (Column)
- Magazine article from: American Banker Wendel, Charles B. March 16, 1993 700+ words
An effective asset-based lending group can provide a dramatic payback...loans. Unfortunately, asset-based lending departments are viewed by many...unsecured lending areas. Many asset-based lending groups generate consistently higher...
- The PrivateBank Adds Asset-Based Lending Team to Illinois Commercial Banking.
- Press release article from: PR Newswire August 24, 2009 700+ words
...announced the creation of an asset-based lending team within The PrivateBank to meet...developing, growing and servicing asset-based lending relationships," said Larry D. Richman...capabilities in the area of asset-based lending provides another important option to...
- Risk-based lending programs that work.
- Magazine article from: Credit Union Executive Whittington, Dennis November 1, 1996 700+ words
...1% of all members, offered risk-based lending, according to CUNA & Affiliates...face two primary tests: * A risk-based lending program should boost loan portfolios...groups. Most credit unions with risk-based lending programs have written policies explaining...
- BMO Capital Markets Appoints Head of U.S. Asset Based Lending Group.
- Press release article from: PR Newswire November 15, 2007 700+ words
...Head of the firm's U.S. Asset Based Lending Group. Mr. Scolaro is based in Chicago...who want to take advantage of asset-based lending as a flexible form of finance. "With...experience and 20 years focused on asset based lending, Mike will be a tremendous asset to...
- Webster Agrees to Acquire Asset-Based Lending Business.
- Press release article from: Business Wire May 20, 2002 700+ words
...definitive agreement to acquire the asset-based lending division of IBJ Whitehall Business...of Japan Trust Company. The asset-based lending operations will operate as Whitehall...Our acquisition of this asset-based lending business is consistent with our plans...
- Newcomers seen hurting asset-based lending.
- Magazine article from: American Banker NATHAN, SARA November 24, 1997 700+ words
...other companies piling into asset-based lending, industry veterans are sounding the...us don't like to be on." Asset-based lending, typically aimed at small and midsize...Financial, which has been in the asset-based lending business for 50 years, is regarded...