Using credit products for cash flow management is not a new strategy. In fact, it’s one of the basic survival techniques taught to most would-be managers who decide to pursue a degree in business. What is less discussed is the range of options available to you, because sometimes you do not have an open asset with equity that can secure a credit line or the operating history for a working capital loan. In those cases, asset-based lending is often the most accessible option. In many other cases, it just turns out to be the most suitable for this particular task.

Asset-Based Loans and Credit Options

There are a lot of ways to finance your business assets individually if you need capital. For example, invoice financing will unlock the value in your invoices so you can meet today’s cash flow needs, for a small fee. There are also inventory loans, advances against a merchant account, and even loans based on the equity in your equipment when assessed as a whole. If you are looking for a solution that gives you more capital than any one asset could, that is when you want to look for a wider asset-based lending program.

These programs exist for both one-time loans and revolving credit accounts, and they differ from other asset-backed products by using multiple assets together to help you get as much capital as you need. It’s worth remembering that credit lines do take ongoing administrative oversight because they flex with the value of your assets and shrink if that value is reduced through inventory sales, invoice repayment, or any other method.

Improving Cash Flow with Routine Financing

It is pretty obvious how a one-time cash infusion can improve cash flow now, but how do you improve it permanently if you’re using one-time asset-based loans and not credit lines? The answer is by refinancing your assets on a regular basis. As you acquire new inventory or rack up new invoices, you can finance them for more working capital. Similarly, if you are using equipment or other assets for collateral, you can refinance them after the loan is paid off.

This gives you options like financing just the assets you need to put up at the moment to get the capital you require, saving the rest for your next planned payday. However you choose to approach it, the flexibility and customizability of asset-based lending provide you with a path to making your cash influxes predictable, which is the key to always having the money you need to meet your commitments if your business is profitable.