Asset-based loans for small businesses utilize collateral as a security for the loan, with acceptable assets varying by lender. Common types of collateral include real estate, equipment, inventory, and personal investments. Finding asset-based financing can be facilitated through traditional banks or alternative lenders, with required documents varying based on the lender and loan type.

1. How Asset-Based Loans
Work for Small Businesses

2. Collateral is any asset accepted by the lender
to secure a loan. Asset-based lenders
typically prefer collateral that can be easily
liquidated into cash if the borrower defaults
on the loan agreement. Some examples of
collateral for a business ABL may include:
What Is Collateral?
• Commercial or residential real estate
• Equipment or inventory

3. • Accounts receivable
• Business or the business owner’s personal
investment accounts, like an IRA or 401K
• Personal savings accounts
• Investments, like stocks and bonds
Each lender will consider collateral differently, so
be sure to check the disclosures to see what the
bank will accept as an asset.

4. Most types of small business loans can be
set up as asset-based if you are working with
a bank, credit union, or online lender that
issues asset-based lending options. Some
types of business financing that are
commonly set up as ABLs include the
following.
Types of Asset-Based Loans

5. CRE loans and business mortgage loans are
considered asset-based lending because
when a borrower receives a loan to purchase
land, buildings, or office space for their
business, the loan is secured by the asset
that is being purchased. The lender has the
right to seize the newly purchased or
renovated property if the borrower defaults
by placing a lien on the property. Purchasers
will not be provided the title for the real
estate until the debt is repaid in full.
Commercial Real Estate Loan

6. Equipment financing is a small business loan
option used to make large purchases, like
machinery, business equipment, computer
hardware and software, and vehicles.
Equipment loans are popular because they
allow borrowers to finance 100% of the
equipment price. The purchased equipment
then becomes the collateral on the debt, so
the loan term is typically the same as the
estimated useful life of the asset.
Equipment Loans

7. Finding asset-based financing is easy and
taking the appropriate steps will ensure that
you connect with the right lender and the
correct type of business loan option. Before
applying for a secured loan, you may want to
explore other business financing options,
like SBA loans or revolving lines of credit,
with the lender you’ve chosen.
How To Find Asset-Based
Financing for Your Small
Business

8. Traditional financial institutions, like
commercial banks, offer secured loan
options. Alternative lenders also help their
customers secure asset-based loans, and
potentially give credit approval to those who
wouldn’t normally qualify.
Find the Right Lender

9. The documents you will need to apply for a
small business loan will vary depending on
the lender, the type of loan, the total loan
amount, and your creditworthiness.
Preparing the following standard loan
documents ahead of time will speed up the
loan application and approval process.
Gather Your Documents

10. • Business financial reports, like the
balance sheet, budget, and income
statement
• Business and personal credit reports
• Accounts receivable and accounts
payable ledgers
• Business banking information
• Deed or proof of ownership for
collateral

11. Why Choose Biz2Credit?
• Trusted partner for franchise
funding
• Biz2Credit was founded in
2007 and has provided more
than $10 billion in loans.
• Dedicated support team
• Tailored financing solutions

12. Thank
You