Asset Based Lending

Asset based lending is a financing philosophy where the amount of the loan is primarily based on the value of the borrower’s collateral as opposed to the overall strength of the balance sheet or the amount of cash flow.

Lighthouse provides asset based financing for a broad range of business purposes such as –

  • Growth Capital

  • Working Capital Needs

  • Mergers & Acquisitions

  • Leveraged Buyouts

  • Refinancing and/or Financial Restructuring

  • Business Turnarounds

  • Distressed Credit Situations

  • Debtor in Possession Financing

  • Chapter 11 Exit

Two men in business attire viewing warehouse inventory

New Loan Criteria

Lighthouse will provide asset based commercial loans to small and mid-sized manufacturers, wholesalers, distributors and service companies that fit within the following criteria:

  • Types of Loans Offered – Revolving lines of credit and term loans secured by accounts receivable, inventory and machinery and equipment assets.

  • Loan Size – Credit Facilities ranging from $1,000,000 to $5,000,000.

  • Advance Rates – Up to 90% of eligible accounts receivable, up to 60% of eligible inventory, and up to 80% of machinery and equipment values.

  • Term Loans – Term loans secured by machinery and equipment in conjunction with a line of credit amortized up to 5 years.

  • Contract Term – One to three year contracts for Credit Facilities.

  • Territory – Transactions considered throughout the Eastern and Central time zones of the United States.

  • Credit Criteria

    • High leverage resulting from rapid growth, mergers, acquisitions or buy-outs acceptable.

    • Negative net worth acceptable

    • Operating losses acceptable

    • Positive cash flow or evidence of a positive cash flow from a business turnaround in progress or in the near future required

    • Adequate performance of working capital assets required

  • Target Clients – Small to mid-size manufacturers. wholesalers, distributors and service companies.

  • Loans Avoided – Loans secured by real estate, consumer receivables, contract receivables and/or progress billings, foreign receivables not supported by a letter of credit or acceptable credit insurance, and medical receivables.

If you meet the foregoing new loan criteria, Contact Us by phone or email to discuss how we can tailor a loan to fit the unique needs of your business.

To learn more about our Loan Application Process Click Here

Advantages to Clients

Some of the reasons that clients select a Lighthouse asset based loan over other financing alternatives are –

  • Interim Financing – the borrower needs to bridge the gap prior to returning to traditional bank financing.

  • Evergreen Revolving Loan – a line of credit from Lighthouse does not require any sort of seasonal pay down or a term payout.

  • Ability to Fully Leverage Assets – clients can leverage their working capital assets along with traditional “lend-able assets” like real estate and machinery and equipment.

  • Loan Grows as Borrowing Base Grows – Lighthouse will increase the loan amount as accounts receivable and inventories grow along with revenue.

  • No Dilution of Equity Ownership – the ability to leverage the working capital assets means a client may avoid the need to raise more equity.

  • Non-Notification of Client Customers – Lighthouse does not require notification letters from a client’s customer base acknowledging liens.

  • Responsiveness to  Needs or Problems – based on our corporate structure, Lighthouse can turn approval decisions quickly, often within 48 hours.

  • Less Costly than Factoring or New Equity – asset based lending is typically less expense than factoring or new equity.