Asset-Based Lending/Factoring/Lines of Credit
There are numerous reasons that a company would choose to utilize an asset-based lender or a factoring arrangement. There is an increased interest cost in utilizing these type lenders but with an extensive discussion of each program, sometimes its the most cost-effective and operationally appropriate financial decision to make.
In most cases, these type lenders will only offer lines of credit secured by accounts receivable and inventory. In some cases, they may offer an interest only bridge on companies fixed assets that may be more 'cash flow' friendly versus a credit appropriate alternative? In any case, the underwriting and covenant requirements will not be as restrictive that is required in traditional bank financing.
We work with family offices, individuals, private equity, hedge funds, mezzanine debt lenders, and other sources of private capital to fund projects that require a capital infusion outside of traditional sources. In many cases, a combination of capital sources will be required but one of these types of institutions will be involved.