Even well-established businesses sometimes run into temporary cash-flow issues. A short-term loan is a common way to bridge the gap before the next cash injection.
Bank loans can be difficult and time-consuming for businesses to secure. BizFunding offers a fast, convenient alternative: using one or more specific business assets to get funding for your business.
Instead of stressing about costs or missing out on an opportunity to grow your business, you can use an asset-based loan against a vehicle or commercial property to get the funds you need.
What is asset-based lending?
Asset-based lending is when you use an asset, such as a paid-off vehicle, as collateral on a loan. The loan amount is based on the value of the asset.
The lender takes temporary possession of the asset until the loan is repaid. Once the loan is settled, the asset is returned. The loan doesn’t affect your ownership of the asset.
Asset-based loans offer the following benefits compared to traditional bank loans:
- pay out within 24 hours
- no credit checks
- limited paperwork
- new businesses can get approved
- very large loan amounts.
Assets that are usually used to secure an asset-based loan include luxury watches, gold, jewellery, vehicles and fine art.
Businesses can also get asset-based loans using a business asset, such as company vehicles or commercial property.
Loans against vehicles
Getting a short-term loan backed by a vehicle is a fast, straightforward way to access funds for your business. The vehicle can be either personally owned or business-owned.
Small and medium businesses often use this type of funding to cover small to medium costs, such as ordering materials for a new job or covering wages.
This type of loan is recommended when your business has temporary cash-flow issues but you’re confident you’ll be able to repay the loan in the short term.
The lender takes temporary possession of the vehicle for the duration of the loan. Remember, you won’t be able to drive the vehicle during the loan term.
Loans against commercial property
Businesses can also use commercial property as collateral on a loan. These are ideal for larger loans when you’d like to expand your business by venturing into new markets, buy new equipment or hire more staff.
If your business owns a commercial property in Gauteng, you may qualify for an asset-based loan against a commercial property. This type of loan is capped at R3 million and only applies to properties valued at more than R500,000.
You will need to submit the following documentation with your application:
- the original title deed and ERF number
- the latest municipal account
- three to six months’ bank statements
- company registration documents
- ID and proof of address for the business director(s)
- a business plan of how the funds will be paid back.
At BizFunding, we partner with businesses to offer necessary funding and help them grow through new opportunities. This means your business can get funding for an upcoming project even if you’re having temporary cash-flow issues. Apply online for funding or call 012 001 0095 for more info.