Asset-Based Loans*

An asset-based loan is a loan, often for a short term, secured by a company's assets. Real estate, accounts receivable (A/R), inventory, and equipment  are typical assets used to back the loan. The loan may be backed by a single category of assets or some combination of assets, for instance, a combination of A/R and equipment.

Asset-based lending is a term more frequently used in conjunction with commercial real estate financing as opposed to simply hard money which is used for residential as well as commercial finance. Asset-based lending is not necessarily hard money or bridge financing. Hard money is for problem credit, and bridge for short term, hence the phrase "bridge". Instead, asset-based lending for commercial property sometimes actually includes more than real estate. It can include accounts receivable, equipment, patents and other business assets. Asset based lending is used with all size companies and can allow an asset-rich corporation to receive financing when they are experiencing a need for growth or have not met standard liquidity or credit requirements.

*Taken from Wikipedia.org. For more details, click HERE