When your business is in trouble, you might be tempted to get a loan from a regular bank so that you have enough money to get yourself through a down period.
Asset-Based funding is available to all businesses in all sectors and industries. It is often used by new and start-up businesses as well as those looking to refinance existing loans. It is also often popular with companies who are looking to fund mergers, acquisitions, and management buyouts.
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Banks are likely to throw money at you and you would be tempted to take it, especially if you are desperate to stay in business.
If you want then you can also approach a bank for asset-based lending and request them to give you cash instead of your assets such as invoices. However, approaching a bank may prevent you from taking advantage of the cash that you expect to get.
Firstly, the bank is likely to scrutinize your financial history before it even decides to entertain your application. So, if you do not have a good financial history then you obviously cannot expect the bank to lend a helping hand.
Secondly, if your credit history is good even then you may face some other problems while trying to use the cash to take care of your expenses. The company will be more interested in finding out whether or not your customers are likely to pay in the future.