Asset-Based Lending
The capital you need is already inside your business.
Stop waiting 60–90 days for customers to pay. Turn your receivables, inventory, and payables into immediate working capital without giving up equity or control.
Leverage what you already own
Asset-Based Lending (ABL) transforms your tangible assets including accounts receivable, inventory, and medical equipment, into immediate liquidity. Designed specifically for healthcare providers, this solution offers rapid access to capital for operational growth and stability, moving beyond the constraints of traditional credit history to focus on the actual value of your business.
Why Healthcare Providers Choose ABL
Unlock the hidden value in your assets to drive immediate growth.
Access to Capital
Quickly access the funds needed for expansion, equipment purchases, and other critical expenses by leveraging your existing assets.
Improved Cash Flow
By converting invoices into instant cash, healthcare providers can reduce financial stress and focus on delivering quality patient care.
Flexible Financing
Asset-based lending offers flexible terms and structures, tailored to the specific needs of your healthcare practice.
No Equity Dilution
Maintain full ownership and control of your practice without diluting equity, as ABL is secured against your assets.
The Asset-Based Lending Process
How Asset-Based Lending Works?
Understanding the process of asset-based lending can help you make the best financial decisions for your healthcare practice. Here’s a step-by-step overview:
Asset Evaluation
Identify and evaluate the assets that will be used as collateral, such as accounts receivable, inventory, and equipment.
Loan Approval
Based on the asset valuation, the lender approves a loan amount, typically a percentage of the asset's value.
Funds Disbursement
Receive the loan amount in a lump sum or as a revolving line of credit, depending on the agreement.
Repayment
Repay the loan over the agreed term, using your assets as collateral. Regular evaluations ensure compliance and adjust loan terms if necessary.
Understanding the Difference
Asset-Based Lending vs Traditional Financing
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ASSET-BASED LENDING
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TRADITIONNAL FINANCING
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COLLATERAL
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Uses assets like receivables, inventory, and equipment
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Generally requires real estate or significant collateral
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APPROVAL TIME
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Faster approval based on asset valuation
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Longer approval process
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Based on the value of assets
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Based on creditworthiness and financial history
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CONTROL
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Maintain control without equity dilution
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May require covenants impacting control
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FLEXIBILITY
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More flexible terms and structures
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Fixed terms and repayment scheduless
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Asset-Based Lending
Frequently Asked Questions
- Quick Access to Capital: ABL allows healthcare providers to obtain funds rapidly by using their assets as collateral, which is ideal for addressing urgent cash flow needs or seizing growth opportunities.
- Flexibility: Unlike traditional loans, ABL offers increased flexibility based on available assets. This allows healthcare practices to manage their financing according to their specific situation and liquidity needs.
- Less Reliance on Personal Credit: Since the loan is secured by the company’s assets, personal or business credit history is not the main evaluation criteria. This enables healthcare providers with less favorable credit to still obtain financing.
- Asset Optimization: Healthcare providers can leverage their existing assets (such as receivables and inventory) to obtain funding, optimizing the value of these assets rather than leaving them unused.
- Support for Growth and Expansion: ABL can provide the resources needed to finance expansion projects, purchase new equipment, or improve facilities, thereby contributing to business growth.
- Improved Cash Flow Management: By using assets to secure loans, healthcare providers can better manage their cash flow and maintain smooth daily operations.
Asset-based lending is suitable for healthcare providers of all sizes, including medical practices, clinics, hospitals, and other healthcare-related businesses. It is particularly beneficial for companies in sectors such as biotechnology, pharmaceuticals, medical devices, diagnostics, healthcare IT, and life sciences that have valuable assets to leverage.
The approval and disbursement process for asset-based lending is typically faster than traditional loans. Once the assets are evaluated and the loan is approved, funds can be available within a few days to a couple of weeks, depending on the complexity of the assets and the lender’s processes.
Common assets used as collateral in asset-based lending include accounts receivable, inventory, medical equipment, and other valuable property owned by the healthcare provider. The specific assets that can be used depend on the lender’s criteria and the value of the assets.
The loan amount is typically a percentage of the appraised value of the assets used as collateral. This percentage, known as the loan-to-value ratio, varies based on the type of assets and the lender’s policies. Generally, accounts receivable may secure a higher percentage compared to inventory or equipment.
As with any financing option, asset-based lending carries risks. If the borrower defaults on the loan, the lender can seize the assets used as collateral. Additionally, regular evaluations of the assets are required to maintain the loan, which can be an administrative burden.
Yes, asset-based lending can be combined with other financing options such as invoice factoring, traditional loans, or lines of credit. Combining financing solutions can provide a comprehensive approach to meeting your healthcare practice’s financial needs.
To get started with asset-based lending, contact Finmed Capital. Our team of experts will guide you through the process, assess your assets, and provide personalized financial solutions tailored to your healthcare practice.
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