Many small businesses require loans to strengthen cash flow during difficult times or while taking advantage of opportunities for growth. However, if your credit rating is low, you may have trouble obtaining a loan based on company credit. Under these circumstances, you may find it more desirable to get an asset-based loan rather than a loan based on your business’s credit score. Here are some tips on how to make the most of your relationship with an asset-based lender.

Choose a Lender that Understands Small Business Challenges

Your first priority is to select a lender that is sympathetic to your company’s situation. This lender will probably have ties to your area’s community of small businesses and remembers what it is like to start out as a small business. After getting to know you and your business, a lender like this is prone to consider your circumstances and be lenient concerning requirements for your loan.

Understand the Process

To work with an asset-based lender, you will have to provide relevant information and documentation. This may include financial records and details of current inventory levels, not just once but on an ongoing basis. This allows the lender to help you foresee and forestall any possible upcoming difficulties.

Consider the Future

As you begin to work with an asset-based lender, it is important to consider the future. Be honest about your business’s financial problems. When you are experiencing a downturn in profits or having difficulty making payments, do not attempt to make excuses or cover up these dilemmas. If the lender is sympathetic to the difficulties you face and meets the financial needs of your company, it may be to your benefit to establish a long-term relationship. This will make it easier if you find it necessary to request more financial assistance in the future.

For more advice on working with asset-based lenders, get in touch with Eagle Bend Capital Financing.