Sertant Capital – Asset Based Funding Versus Invoice Finance Solutions

Asset-based lending is a loan scheme that entrepreneurs can avail to obtain funds for their businesses’ working capital requirements. Banks offering this financial solution provide the lump sum of money they require subject to conditions. Entrepreneurs have to agree to keep one of their business assets as collateral. These can be in the form of inventories, accounts receivable, equipment, or real estate. On the other hand, invoice financing is a form of borrowing for entrepreneurs who need a continuous flow of funds. Under this scheme, entrepreneurs can get the money they need against the outstanding dues their customers owe them. This enables them to maintain a steady cash flow for their businesses.

Sertant Capital is a renowned equipment finance company conducting its commercial activities from Newport Beach and Irvine, California. It specializes in offering businesses a wide range of customized leading schemes via its vendor programs. These include sale-leaseback, off-balance sheet financing, process payments, refinancing options, TRAC lease, and fixed-rate financing. The company’s customers come from diverse industrial sectors and have different credit profiles. Since its inception, the company has been able to generate transactions worth $ 5 billion.

The expert from this equipment financing company says most entrepreneurs might assume both asset-based lending and invoice financing are similar. Both of these financial solutions require them to keep one of the assets as security to obtain the funds they need. However, asset-based lending and invoice financing have the following differences:

1. Asset-based lending has more stringent eligibility requirements for entrepreneurs to fulfill than invoice financing,

2. The approval process in case of invoice financing is faster than asset-based lending;

3. Asset-based lending is more secure than a borrowing scheme from banks in comparison to invoice financing, and

4. Invoice financing is a flexible borrowing scheme for entrepreneurs than asset-based lending.

These specialists further state both asset-based lending and invoice financing can be beneficial for entrepreneurs. They need to choose a lending scheme that meets their specific working capital and cash flow needs. In doing so, they should keep in mind the following factors:

1. Entrepreneurs should calculate beforehand how money much they need to conduct their business activities,

2. They need to take into consideration the costs of obtaining the funds from these leading schemes,

3. Entrepreneurs should approach banks with adequate experience in offering the necessary funds, and

4. Entrepreneurs need to decide whether they want a lump sum of money or a continuous flow of funds.

Specialists associated with Sertant Capital sum up by saying entrepreneurs can get the funds they need for their businesses either through asset-based lending or invoice financing. In asset-based lending, they get a lump sum of money by keeping one of their assets as collateral.

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However, entrepreneurs have to fulfill stringent eligibility conditions for banks to lend them the money. On the other hand, invoice financing allows them to get a continuous flow of funds against the outstanding dues from their customers. It is a flexible borrowing scheme with a fast approval process for the company.