Alliance Finance Group is especially helpful to seasonal or cyclical businesses that feature asset-rich balance sheets and can be structured to align with a borrower’s business and operational needs.
Alliance Finance Group takes the form of revolving lines of credit, and term loans have been provided in conjunction with capital markets offering and various other long-term debt instruments.
We combine all inventory receivables and plant and equipment into one borrowing base, significantly increasing the borrower’s debt.
The borrower will calculate and report this borrowing best monthly so that Alliance Finance Group can monitor the exposure.
Basics about asset-based lending
The loan is secured by the assets of the borrower in asset-based lending. As the asset secures the loan, asset-based lending is considered less risky than unsecured lending, leading to lower interest rate charges.
In addition, the more liquid asset, the less risky the loan is likely to be considered, and the lower the interest rate would be demanded.
Asset-backed lending amount
Asset-based lending commonly refers to the loan to value ratio. The loan to value ratio for the asset-backed loan is around 80% of the marketable securities. Therefore, it states that the lender could only be willing to provide a loan of about 80% of the value of the marketable securities.
How does the asset-backed lending board with Alliance Finance Group?
The asset-backed lending is a part of a loan or a line of credit that is issued by the lender to a business. It can help with working capital debt refinancing, seasonal sales fluctuations, acquisitions, mergers, and restructuring.
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