There are a lot of myths surrounding Asset Based lending, and because of this, many people are left confused and feel reluctant to use it as a source of financing. LiquiditySA wish to dispel these myths in order to give people a better understanding and possibly even consider the service as a solution. Before accepting these myths as truths, take some time to get to know some of the common myths about asset-based lending and decide whether or not you believe them for yourself.
1. First, it is said that asset based loans are costlier than traditional loans. In fact, asset based loans are very competitively priced and offer a lot of flexibility and versatility. Further arguments say the asset based loans are only concerned with collateral value. Collateral is no doubt a very important component as the very foundations of the loan are the assets pledged as collateral. However, those companies/individuals that have a solid base and are interested in maximising operations, there are many asset-based lending solutions that also strongly rely on financial performance.
2. Second, there are those who claim that asset-based lending is more expensive than traditional lending. Now this one is also not true, because getting unsecured loans actually cost you more.
3. Third, some assert that asset-based lending is only done by financially-unstable companies. Whereas the truth is that many financially-growing companies are looking toward this type of loan as financing. LiquiditySA is proof of this.
4. Next, asset-based loans are rumoured to be for borrowers with bad credit or for the ones that are utterly desperate. As mentioned above, unsecured loans are costlier than you can imagine, this is why wise burrowers don’t opt for unsecured loans that depend on their credit worth. Many borrowers understand this; even if they have good credit worth and are not beyond desperate, they choose asset-based loans simply because those are the best choice.
And so these are some of the myths that plague the asset-based lending industry. Share the truth to those who still have misconceptions about this form of financing.
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