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The Alluring Nature Of Asset-based Lending

Written by Marques

Lending to businesses that are supported by assets or other forms of collateral is known as asset-based lending. Asset-based loans — sometimes referred to as lines of credit backed by assets like accounts receivable, inventories, equipment, or other assets included in the balance sheet, are also known as such loans. The terms asset-based financing and commercial finance are also used to describe asset-based lending.

Asset-based lenders make it potential for commercial mortgage brokers to accommodate the specific needs of real estate investors who are often difficult to qualify by placing more emphasis on a property’s value and potential for income generation than the borrower’s personal income and credit history.

Asset-based Lending and its Ideal Features

For residential mortgage brokers, asset-based lending opens up new possibilities.

To supplement their home finance business when interest rates begin to rise, a lot of residential mortgage brokers have noted that securing loans for investment and commercial real estate can significantly level up their earning potential. In reality, a huge number of Marques Direct broker clients have grown successful businesses by meeting the requirements of underserved, independent real estate investors who struggle to get financing for their business because they don`t qualify for a standard bank loan.

Asset-based Lending offers Manageable Transactions

Asset-based financing highlights two key advantages for serving real estate investors- flexibility and ease. Marques Direct holds and maintains servicing of asset-based loans as a direct portfolio lender. Thus, Marques Direct is free to establish the underwriting guidelines and secure more adaptable financing options. Asset-based lending is also simpler to fund since they are less complex. If the conventional lenders are compelled to say “no”, applying asset-based funding urges the brokers to say “yes”.

Cross-selling offers a new window of opportunities

Offering asset-based residential investment property mortgages to their existing clients is frequently less challenging and time-consuming than what the experienced residential mortgage anticipated. Brokers, for instance, frequently have the chance to view the real estate holdings of their customers while arranging a house mortgage loan. When house insurance is offered with an existing customer’s vehicle coverage, it presents a cross-selling opportunity. Having more items on your list enables brokers to deepen their connections with their clients and generates more profit.

Asset-based lending allows a win-win deal for both borrowers and lenders. Several advantages fall under each roof. Its attractive features attract more borrowers and affect potential profit among lenders.

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