Asset-Based Lending

A New Revitalization of an Old Lending Practice

In the simplest meaning, asset-based lending is any kind of lending secured by an asset. This means if the loan is not repaid, the asset is taken. A home mortgage is an example of an asset-backed loan. More commonly however, the phrase is used to describe lending to business and large corporations using assets not normally used in other loans. Typically, these loans are tied to inventory, accounts receivable, machinery and equipment, but they can also include exotic things like the value of pharmacy script files, a trademark, or whole assets of intellectual property. For example, Midway Games took out a line of credit secured by its Mortal Kombat game. If it fails to repay, the bank then owns the  franchise and can sell the rights to it.

Payday Loan Consolidation

Guest Blogger Angela Sanders

Earlier this month we posted an article about Payday Loans, and the possible pitfalls connected to this institution. This post was evidently compelling enough for a reader to ask to be a guest writer and post her own story. The following is from Angela Sanders, who writes a Blog of her own called A Financial Journal. We are always excited in bringing you the very best in information and calls to action on this blog. Here is Miss Angela…

Is it possible to consolidate your debts?

“The consumers take out payday loan to manage their emergency expenses at the middle of the month. When you apply for payday loan you are not required credit check so the interest on this loan is comparatively higher than other loan programs. Make sure that you pay off the owed amount on scheduled date to avoid the accruing interest on the principal balance.”

Peer-To-Peer Lending

Recently I had a good friend call me for some financial advice about credit card debt.  I’m not going to try and claim that I’m a certified financial planner, but I’m not afraid to offer my financial opinion.  My friend has run into a situation that has become very common place among many Americans, mounting credit card bills.  He was specifically wondering if there was an easy way to lower his interest rate and begin paying down the balance after his bank didn’t have any solutions.  I suggested taking a friendly approach to financing and brought up peer-to-peer lending.

Alternative Lending Sources

What is the proper measure for creditworthiness in this day and age?

Apparently, it is no longer simply the credit report or the verdict of one’s local banking institution. There are so many individuals who fall short of traditional standards of creditworthiness that the marketplace has naturally made room for non-traditional lenders. Besides the controversial subprime mortgage lending industry that most people are by now familiar with, there is a increasung trend in person-to-person lending organizations. Websites like Prosper.com facilitate lending transactions between individuals and other single or small group benefactors. Using such a service empowers people who may not otherwise receive loan funding to finance their dreams and goals.

Approved or Denied: The Small Business Loan Underwriter’s Perspective

I had the pleasure of interviewing a loan underwriter several days ago.  He’s been underwriter biz loans and lines for almost 20 years.  His analogy was simple.  Yet, how many times do we overlook the most critical elements of applying for a loan.  Here it is:

Underwriter’s Point of View

In my years as a small business loan underwriter, I have worked with a variety of applicants and transactions across the country, ranging from start up enterprises, purchases of existing operations, franchises, partner buyouts, etc.  As such, I am able to compile a few tips to help you have a positive experience with your potential lender.

First of all, be HONEST, particularly to any information you disclose in writing. Fraud or misrepresentation is grounds for immediate denial of your application. In addition, most lenders will require that you be able to produce documentation to verify certain items on your application or have the means to verify the items themselves (i.e. credit reports, background checks, etc).