Asset Based Lending for Real Estate Investors

Updated: Jun 3

Maximize Your Borrowing Capacity With Asset Based Lending


Asset based lending is the process by which a real estate investor can acquire financing for an investment property. This type of lending is based on the liquid assets of the borrower, their credit score, but not the salary they earn or employment history.


The process of getting an asset based loan–a specific type of bridge loan (12-24 months) used only for investment and commercial properties–is generally quicker than dealing with institutional banks, requires less paperwork, and means that you will have cash in hand faster to purchase more property and grow as a real estate entrepreneur.


Asset based financing is helpful if you have had bad credit or a foreclosure, and are having trouble getting a loan from traditional banks. It is also helpful if you are experiencing rapid growth in your real estate investing and need the capital to continue the process.


How Asset Based Lending Works


In asset based lending, hard money lenders use your collateral, in this case real estate, to help you acquire additional cash to fund further real estate projects. If your money is tied up in real estate, it is not liquid, and if your company is growing fast, odds are you need more cash to continue growing. This is where hard money lending comes in.


Hard money lenders can get cash in your hand more quickly than typical financial institutions, and the process requires less paperwork and offers more flexibility. Along with the equity in your current real estate assets, a hard money lender will look at accounts receivable, equipment, and inventory to determine your loan. Because the real estate itself is not liquid and you are not borrowing on your personal income, hard money lenders will usually have a higher interest rate than traditional banks.


Benefits of Asset Based Lending


Whether you are trying to figure out how to finance a multi-family investment or need a commercial loan, there are several benefits to acquiring asset based financing:

  • These loans are typically faster than a traditional loan, and require less documentation and paperwork. In addition to closing faster than a term loan, these loans have fewer underwriting guidelines and higher interest rates.

  • The cash flow asset based lending offers can bridge the gap between expenditures and incoming cash receipts for your business.

  • The loan money can be used as you need it, and is not tied to a certain purpose (such as equipment purchase.)

Through asset based lending, Stratton Equities will make it easy to turn your collateral into cash, so you can finance your next big idea. If you have an investment or commercial property and wish to speak with one of our Loan Officers, call Stratton Equities at 800-962-6613, email us, or apply for loan pre-qualification today!

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