Contrary to the acceptance that bankers actually attending for reasons to turn down prospective clients in charge of a loan, they are in the bag to lend almighty dollar. This means that every age a banker is sitting in front of a abeyant client, they are hoping to accomplish the deal assignment aloof as much, if not added than the client wants it to assignment.
A banks primary role in the baby bag lending area is funding advance. An archetype of this would be to finance the expansion of baby bag with a proven track document. Most banks can action a wide array of loan packages designed to finance expansion of an already existing baby bag.
Below are a few examples bank loan packages :
1. Asset Based Financing. Asset Based Financing is a general chat describing a transaction whereby a lender accepts collateral and assets of a company in exchange for a loan. Most asset based loans are collateral against other accounts receivable, inventory, or equipment. Accounts receivable is the most favored of the three as it can be converted into cash quickly. Banks will alone advance funds on a percentage of receivable or inventory, typically being around 75% of the receivable and 50% inventory.
2. Line of Credit. A line of credit involves the banks setting aside designated funds for the bag to haul against for the cash it needs. As the line of credit is used, the credit line is reduced and when payments are fabricated the line is replenished. One above advantage of a line of credit is that no absorption is accrued unless the funds are actually used.
3. Floor Planning. Floor Planning is another anatomy of asset based lending in which the borrowers inventory is used as collateral for the loan. Car dealerships are a prime archetype of a bag that generally uses floor planning as their primary financial tool.
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Originall posted February 26, 2012