OMA Connections Partner, Bank of America Merrill Lynch, posts that asset-based lenders have generally found that, over time, the valuation of a borrower’s assets remains stable over a variety of business and economic cycles. This makes calculating a borrower’s credit capacity based on asset values a highly predictable way of providing capital. For these reasons, asset based loans are often viewed by lenders, for certain types of borrowers, as a more reliable form of lending than cash flow-based loans.
You can read the full FAQ about asset based loans here.
For more information, contact Mike D’Arienzo, Vice President, Sr. Business Relationship Manager, Bank of America Merrill Lynch, at (614) 918-7551. 1/9/2017