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Asset Based Loans for Beginners

Updated: Feb 9

Are you interested in getting started in real estate investment? Or are you an experienced investor looking for alternative loan options? Then asset based loans might be right for you! An asset based line of credit use your real estate as collateral, making them a great option for investors who might not have a bunch of liquid cash lying around. Since they are not based on your salary or on liquid assets, an asset based loan is faster than a traditional mortgage, requires less paperwork, and can be used for what you need rather than a specific purpose, such as inventory equipment.

Let's dive into the details of asset based loans for beginners.

What is Asset Based Lending?

Asset based lending is basically what is says on the can: a type of loan based on your assets, such as real estate, rather than on salary or working capital. Hard money lenders calculate your borrowing base based on your real estate holdings rather than your liquid assets. Most asset based loans are bridge loans, which are typically 12-24 months and can be used for investment and commercial properties. So, if you want to buy a home for you and your family, this is not the right loan for you, but if you are looking to invest in real estate, this type of loan can help you close deals faster!

If you or your small business is growing, you might not have cash on hand to invest in new properties. Also, if you are self-employed or have a small business, getting approved for a traditional loan may be difficult, making it harder for you or your company to borrow money. An asset based loan solves those problems, and gives you a hassle free and fast way to quickly get the money needed to further your investment goals. Contact Stratton Equities today to talk to one of our experienced loan officers to get started on applying for an asset based loan!

What is an Asset Based Lender?

An asset based lender is a hard money lender who deals with asset based loans. Working with the experienced hard money lenders at Stratton Equities will help you learn more about asset based loans and hard money and how they can help you and your business. An asset based lender calculates your loan limits based on your currently held assets and the maximum amount for your credit line.

This gives you both the security of knowing that you can borrow as much as you need in a quick manner while the loan officer knows that your loan is secured by your assets. Since asset based loans are based on a revolving line of credit, your loan officer can immediately approve you to borrow up to your credit limit again as soon as the first debt is repaid. This allows you to invest in new properties without being worried about your previous asset based loans.

At Stratton Equities, our loan officers are experienced in a variety of types of hard money loans, and are happy to help you figure out what type of loan best fits your investment. They are all properly certified and most have undergone additional, specialist training to ensure that they can help you. Contact us today to speak with a loan officer – they can’t wait to talk to you!

Benefits of Asset Based Loans for the Beginning Real Estate Investor

There are many benefits to using an asset based loan for the beginning real estate investor. One of the greatest benefits is the speedy application and approval time. Unlike traditional loans, which involve a lot of underwriting and application materials, an asset based loan included a streamlined process and a quick approval time. If you are worried that the investment property you are looking at might be bought before your loan approval has been processed, an asset based loan should alleviate these worries. Because there is less underwriting, there are also higher interest rates.

Another perk of the asset based loan is that cash flow asset based lending allows you to keep on top of expenditures, necessary purchases, and new investments while you are waiting for incoming cash payments. It doesn’t have to be used for specific purchases or items, so you can have that flexibility needed to make your investments blossom. Like its name, a bridge loan bridges that gap, so your business and investments can swim not sink.

The revolving line of credit gives you the opportunity to grow your loans alongside the growth of your assets, meaning your past successes cannot hold you back from future success and greater loan limits. This opportunity for increased liquidity means that you can purchase more real estate without your current loans holding you back.

How Can I Apply for an Asset Based Loan?

Now that you’ve seen all the perks of applying for an asset based loan, you might want to apply for one to help you invest in that piece of real estate you’ve been eyeing. But how do you get started? Contact Stratton Equities, the leading hard money lender, to speak with one of our talented and experienced loan officers at 800-962-6613, email us, or apply for loan pre-qualification today!

Asset Based Loans for Beginners


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