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The post Mr. Brannon Fisher with Simon Quick Advisors talks about ESG Investing appeared first on Industrial Talk.

BACKGROUND – What is Asset Based Lending or ABL?

An asset based loan (ABL) is a type of business financing that is secured by company assets. Most asset based loans are structured to work as revolving lines of credit. This structuring allows a company to borrow from assets on an ongoing basis to cover expenses or investments as needed.

Asset-based lending (ABL) is a great solution for businesses that have needs that are outside of what traditional banks can offer. Whether it’s greater leverage, softer covenants, or more flexibility, asset based structures can be customized to meet the needs of each individual company. Asset-based lending provides a line of credit based on your company’s eligible:

• Accounts receivable
• Inventory
• Machinery and equipment

Asset-based lending offers more flexibility than other methods of financing, and is a fast and cost-effective way to obtain working capital. Unlike certain types of structured financial products, with an asset-based lending relationship, you do not have to give up equity in your company. ABL gives your company the flexibility it needs to grow, recapitalize, take advantage of supplier discounts, buyout shareholders, or even to fund payroll. It can increase or decrease based on your current business size and needs, and you’ll have daily and weekly access to your line of credit when you request it.

How Asset Based Lending Works:

Businesses need to take out loans or obtain lines of credit to meet routine cash flow demands. For example, a business might obtain a line of credit to make sure it can cover its payroll expenses even if there's a brief delay in payments it expects to receive.

If the company seeking the loan cannot show enough cash flow or cash assets to cover a loan, the lender may offer to approve the loan with its physical assets as collateral. For example, a new restaurant might be able to obtain a loan only by using its equipment as collateral.

The terms and conditions of an asset-based loan depend on the type and value of the assets offered as security. Lenders prefer highly liquid collateral such as securities that can readily be converted to cash if the borrower defaults on the payments. Loans using physical assets are considered riskier, so the maximum loan will be considerably less than the book value of the assets.

For example, if a company seeks a $200,000 loan to expand its operations. If the company pledges the highly liquid marketable securities on its balance sheet as collateral, the lender may grant a loan equaling 85% of the face value of the securities. If the firm’s securities are valued at $200,000, the lender will be willing to loan $170,000. If the company chooses to pledge less liquid assets, such as real estate or equipment, it may only be offered 50% of its required financing, or $100,000.

In both cases, the discount represents the costs of converting the collateral to cash and its potential loss in market value.

Typically, Interest rates on asset-based loans are lower than rates on unsecured loans or lines of credit since the lender can recoup most or all of its losses in the event that the borrower defaults. However, the interest rates charged depend on the applicant's credit history, cash flow, and length of time doing business.

Key Takeaways:

• Asset-based lending is loaning of money using the borrower's assets as collateral.
• Asset-based lenders prefer highly liquid collateral such as securities to physical assets such as equipment.
• Asset-based lenders primarily serve small and mid-sized businesses that need to routinely cover short-term cash flow demands.

Business owners seeking immediate capital, leasing solutions to grow their respective businesses and either have no credit issues or have issues we have discussed today need to contact me immediately at keith@midas-financial.com or call me at 303-520-2493.

OTHER INDUSTRIAL RESOURCES:

Safeopedia: https://www.safeopedia.com/

Industrial Marketing:  https://industrialtalk.com/industrial-marketing/

Industrial Academy: https://industrialtalk.com/industrial-academy/

Industrial Dojo: https://industrialtalk.com/industrial_dojo/

YOUR INDUSTRIAL DIGITAL TOOLBOX:

Bliss Drive: https://www.blissdrive.com/

Active Campaign: Active Campaign Link

BombBomb: BombBomb Link

Social Jukebox: https://www.socialjukebox.com/

OTHER RELEVANT PODCASTS:

Industrial Leasing Strategies and Benefits with Keith McAslan

Industrial Sales: Looking for Something Easy.

The post Secured or Asset Based Lending With Keith McAslan appeared first on The Industrial Talk Podcast with Scott MacKenzie.

The post Secured or Asset Based Lending With Keith McAslan appeared first on Industrial Talk.

Keith McAslan leverages his experience in building and selling businesses and offers his to Industrial business owners on this weeks Industrial Talk Podcast. In this podcast, Keith lays out the tangible steps for improving and maintaining your credit rating. This is the first step, in a 4 part series, to gaining access to capital for expansion and growing your industrial business.

Issue – Industrial business owners must rely on their own credit rating and personal guarantees to access capital from lenders

Problem – Many times the small business owner who has an immediate need for capital due to their circumstances does not have access to traditional money sources. The business owner either has negative credit or their Credit Utilization Ration (CUR) is too high.

What is CUR? – CUR consists of all revolving credit reported on an individual’s credit file. As an example if a credit card has $1000 limit and you have used $400, the CUR is 40% Many time lenders want to see CUR of 20% or less and unsecured lenders will require each individual credit card CUR is below 40%

Three Step Process to Capital we call the Midas Financial Continuum:

• Step 1 – Merchant Cash Advance (MCA) or Modified Merchant Cash Advance – These are simple interest loans with no pre-payment penalties where the small business owner only pays for what they use and time they have it. These loans typically are easy to obtain and can be in amounts up to $100,000
• Step 2 – If the small business owner has a CUR issue as discussed above they can use the funds provided in step 1 from the Merchant Cash Advance to pay down the various revolving credit facilities below the 40% benchmark level. However, if the owners issue is not CUR but negative credit, most lenders will not even look at a damaged credit file depending how many derogatory items there are. The timeframe typically is the past 1-2 years, as after 2 years the relevance is less important. Midas Financial can work with you and credit agencies to remove items typically in 40 banking days or less. Midas has perfected a process over many years in credit repair so their work takes about ten banking days, then the remainder of the time is a waiting game for the credit agencies to record and notify the business owner that the item(s) have been removed.
• Final Step is refinancing – The business owner now has credit restored and needs to refinance the higher priced loans from the MCA and obtain competitively priced growth capital. As we work with the small business owner through this process, Midas will have been working with several lenders and have collected all the necessary documents to provide the growth capital the business owner needs to grow.

Business owners seeking immediate capital to grow their respective businesses and either have no credit issues or have issues we have discussed today need to contact me immediately at keith@midas-financial.com or call me at 303-520-2493.

OTHER INDUSTRIAL RESOURCES:

Safeopedia: https://www.safeopedia.com/

Industrial Marketing:  https://industrialtalk.com/industrial-marketing/

Industrial Academy: https://industrialtalk.com/industrial-academy/

Industrial Dojo: https://industrialtalk.com/industrial_dojo/

YOUR INDUSTRIAL DIGITAL TOOLBOX:

Bliss Drive: https://www.blissdrive.com/

Active Campaign: Active Campaign Link

BombBomb: BombBomb Link

Social Jukebox: https://www.socialjukebox.com/

Other Relevant Podcasts:

EP 040: Interview with Mr. Keith McAslan

Industrial Strategy: That One Thing

The post Industrial Credit Repair for Securing Capital With Keith McAslan appeared first on The Industrial Talk Podcast with Scott MacKenzie.

The post Industrial Credit Repair for Securing Capital With Keith McAslan appeared first on Industrial Talk.