If you’re seeking a Mississauga asset based loan for your local area business, you will definitely have some options to consider in this locale.
In Canada, the asset based lender world revolves around downtown Toronto, which many asset based lenders not prepared to wander beyond the boundaries of the Greater Toronto Area more or less to conduct business.
So being in Mississauga affords your business access to just about any type of asset based loan that is available in Canada from both Canadian and U.S. asset based lenders.
This is both a good and bad thing in some respects.
Its a good thing in that if you have good assets that can be pledged for security, regardless of what those assets are, you will likely find some form of Mississauga asset based loan to consider.
The bad thing is that there are so many different types of asset based lending models out there, which can overlap across asset classification and industry, it can be hard to figure out which financing facility is going to be the best fit for your business.
A good example of this problem is when a well established business is operating very profitably, but needs a higher ratio of debt to equity business financing to fuel additional growth. Virtually any type of asset based lender would be interested in this type of scenario, provided that the assets being offered as security fall within their program structure.
The challenge comes from the fact that there can be enormous differences in rates and principal repayment options. From an interest rate perspective, you could see potential Mississauga asset based proposals ranging from prime plus two or three to an offer at two percent a month and anywhere in between.
Asset based lending has long been associated with higher interest rates due to the higher leverage position the lender is taking, resulting in the lender holding more of a quasi equity position, which drives up the rate of return.
But for the larger, well established companies, major banks have jumped into the market and are offering prime plus asset based lending to companies that traditionally would be paying 12% to 18% per annum on a similar asset based facility.
Certain asset based lenders can provide better leverage to one group of assets over another, so if you utilize them across all available assets, your weighted average cost of capital may end up being high than if you split asset type by relevant asset based lending source.
If you’re in need of a Mississauga asset base loan, I suggest that you give me a call so we can go through your requirements together and discuss different asset based financing strategies and options available to you.