Asset based lending is one of the most misunderstood concepts in the financial world. This has led many to automatically dismiss it and sometimes even shy away completely from it. However, it is important to thoroughly study the practice, especially if you are looking to avail of an asset based loans. LiduiditySA would like to elaborate on these misconceptions: here are 3 myths about asset based lending.
1. Asset based loans cost more. The first myth is that you will have to spend more money paying back an asset based loan as opposed to a traditional loan. This is not true. Many asset based loans are also competitively priced and flexible just as traditional loans are. Keep in mind that any traditional loan when unsecured will undoubtedly cost you more.
2. Required reporting is difficult. Another myth about asset based lending is that it is extremely demanding in terms of reporting. Since it will use accounts deliverable and inventories as bases, you will have to regularly report changes on these. In truth, while that might be demanding, it is not actually difficult. Modern workplace technology has made this aspect extremely easier.
3. Asset based lenders only consider collateral. Lastly, another myth about asset lending is that lenders simply look at collateral, and nothing else. This is also not true. While collateral value forms an extremely important component in determining the value of the loan, it is by no means the only factor considered. Many lenders also consider other factors. For instance, you can find lenders that look more into financial performance.
LiquiditySA is a professional Asset based lending service based in Sandton. Contact Liquiditysa.com for more information on how you can attain a no credit check loan.