Asset based lending is just as it sounds, there is some form of asset acting as collateral.
Revenue Based Loans. These loans are based upon the past revenue generated by the business based on the last 4 to 6 months depending on the lender. The amount loaned is normally one to two times the gross monthly revenue.
Merchant Cash Advance. Very much the same as revenue-based loans except the loans are based upon the monthly credit card receipts instead of gross revenue and payments are taken from each new credit card process.
401K Rollovers. These are not loans but rather a redirection of the clients 401K into a self-investment of their own company. This requires some detailed legal work to comply with all IRS regulations. It can be easy working capital if your client has at least $50,000 in their 401K.
Account Receivable Factoring. When your clients have open invoices with other businesses, not consumers, those invoices can be sold to a third party. The third-party factoring company will typically pay around 97% of the invoice value.
Purchase Order Financing. When your client has an open purchase order, for finished goods, that purchase order can be used as collateral for a loan of up to 90% of the value of the purchase order.
Inventory Loans. Flooring credit lines and loans are for those businesses that need to stock inventory. The inventory becomes part of the collateral.
Hard Asset Based Lending. If your client has other hard assets such as stock, bonds, real estate, gold, silver, gems, etc. there are lenders who will use those assets as collateral for loans.
Recurring Payment Loans. When clients have recurring structured payments from a settlement, judgment, annuity, winnings, seller carry back note, or real estate note, those recurring payments can be sold at a discount to stream payment buyers.
Contract Based Financing. If your client has a contract with a fortune one thousand type company or a government agency that contract can be used to secure completion financing much like a building construction loan.