What is asset based lending?

With an asset based loan, the loan proceeds are secured by a company’s assets such as eligible accounts receivable, inventory or equipment. Asset based lending offers a viable alternative source of capital for business owners who are unable to obtain traditional bank financing for their companies.

How is asset based lending different from traditional bank financing?

Asset based lending focuses first on the quality and performance of the underlying collateral, and then on the borrower’s financial condition, ownership/management, and overall circumstances. Because asset based lending is not regulated in the same way as traditional bank lending, we can provide more creative and more flexible solutions in situations that might be viewed as too risky for a bank. Our objective with every client is to craft the right solution for its needs while encouraging the company’s growth and prosperity.

Who can benefit from asset based lending?

Manufacturers, wholesalers, distributors and service providers all turn to asset based lending for an equally diverse range of financing needs. Our clients include start-ups (one to three years in operation) seeking financing for business growth; companies whose borrowing needs are greater than what their banks can provide; and established companies that have encountered financial difficulties. Companies that want to expand their product lines, upgrade equipment and grow their revenues also turn to us for the financing they need.

What is the difference between accounts receivable financing and factoring?

Many business owners equate accounts receivable financing with factoring, however, there are some significant differences. Factoring is the discounted sale of accounts receivable. With factoring, the factor purchases one or more invoices that have been sent to the company’s customer. In contrast, asset based lending advances a percentage of each eligible account receivable, thus allowing business owners to maintain ownership and control of their accounts receivable and their customer relationships.

Why should I (or my client) choose Celtic Capital over other asset based lenders?

Having provided hundreds of companies with interim capital since 1982, we offer a number of significant advantages over other financing sources, including:

  • Our focus on developing relationships
  • Creative, flexible lending solutions
  • NO financial covenants
  • Access to senior management (the decision-makers) from day one
  • Typical funding is within thirty days of receipt of a complete financial package
  • Celtic-Link, our powerful on-line account management tool

Will I eventually be able to qualify for a traditional bank loan?

The vast majority of our clients have gone on to achieve financial stability and return to bank financing. In fact, this is our primary objective with each client that comes to us. When our clients eventually succeed in obtaining traditional bank financing, we consider this a success for Celtic Capital as well.

What can the capital be used for?

  • Expansion/acquisition/growth
  • Restructuring
  • Turnaround
  • Recapitalization
  • Supplier discounts
  • General cash flow

Celtic Capital is a direct lender; what does that mean?

Financing comes directly from Celtic Capital; there’s no intermediary, no other source of funds.

What are the fees?

As we tailor our proposals to meet the individualized needs of each business, there are no “standard” fees. All fees will be outlined in the Proposal so there will be no surprises later on.

Is it better to secure financing without financial covenants? Why does it matter?

It’s much better to secure financing without financial covenants. That way, business owners have the flexibility to manage their businesses to actual business needs instead of to a particular covenant.

Is it still possible to work with my banker if Celtic Capital provides my lending facility?

Celtic Capital doesn’t compete with banks on any level.  Your bank can maintain or establish your operating accounts and you can use any other bank products and services that are right for your business.  And when your bank is willing to lend to your business, you can transition back at any time with no penalty.