The contemporary real estate investment landscape offers opportunities but also presents challenges. Your investment needs to be funded timely, often requiring immediate financial solutions that traditional lenders are slow to provide. That’s where asset-based loans come in, giving you the flexibility and speed to seize those golden opportunities.
While these loans may seem complex, partnering with Malve Capital LLC can simplify the process and increase your chances of success. As a leading asset-based lender serving investors and developers nationwide, we provide qualified borrowers quick access to capital to empower them to achieve their objectives. When you work with us, we will position you to transform your vision into a tangible, income-producing property. Contact us today to get started.
What Are Asset-Based Loans?
Asset-based loans are alternative fundings secured by an asset or group of assets. Instead of primarily assessing your credit score or income, asset-based lenders focus on the value of your assets. For real estate investors or developers, assets that secure a loan include:
- Residential properties – from single-family homes to multi-unit apartment buildings
- Commercial properties – office buildings, retail centers, and industrial properties
- Land – undeveloped land or land with planning permissions
- Real estate portfolios – collections of various types of real estate properties
How Does an Asset-Based Loan Work?
An asset-based loan is straightforward. It starts with assessing the asset’s value, followed by the loan amount being a certain percentage of that value, often known as the loan-to-value (LTV) ratio. For instance, if you own a commercial property worth $1 million and the lender offers a 70 percent LTV ratio, you can receive a loan of up to $700,000. In the event of default, the lender has the right to seize and sell the asset(s) to recover the loan amount.
How Do I Qualify for an Asset-Based Loan?
To qualify for an asset-based loan, you must have an asset or assets of considerable value. Lenders consider several factors:
- Value of the asset – Asset value is the single most critical factor; the higher the value, the larger the loan you can secure.
- Ability to repay the loan – Your credit score may not be the deciding factor, but lenders still need assurance you can repay the loan. You can demonstrate your ability to repay through your income, business revenues, or a solid exit strategy for the project.
- Experience in real estate – For real estate developers and investors, a track record of successful projects can boost your credibility.
The lending professionals at Malve Capital will guide you through the process and tailor an asset-based loan to your needs and objectives.
Reasons to Take an Asset-Based Loan
Asset-based loans offer several benefits, such as:
- Quick funding – When a lucrative deal comes your way and you need funds quickly, asset-based loans can be a lifesaver.
- Limited or poor credit history – If traditional financing options are unavailable due to poor credit, asset-based loans are an alternative.
- Cash flow management – These loans can help manage the ebb and flow of funds during the development phase of a project.
When you partner with Malve Capital, you can expect a seamless approval process and an exceptional client experience.
Risks of Asset-Based Loans
Asset-based loans, like all financial instruments, come with certain risks and potential downsides to consider:
- Asset depreciation – The main risk associated with asset-based loans is the potential for the underlying asset to depreciate in value. If the market value of the collateral decreases significantly, the borrower may end up owing more than the asset’s current worth.
- Potential for loss – The collateral is on the line in asset-based loans. If the borrower cannot repay the loan, the lender has the right to seize the asset and sell it to recover the loan amount. This could mean losing a piece of property or another valuable asset.
- Higher interest rates – Asset-based loans generally have higher interest rates than traditional loans due to the higher risk associated with this type of lending, especially if the borrower has a lower credit rating.
- Dependence on business performance – For businesses, if revenues decline, it may affect the ability to repay the loan. In the case of invoice financing (a type of asset-based loan), a decrease in sales would directly impact the amount borrowed.
The best way to mitigate these risks is by working with an experienced lender like Malve Capital. Our team structures asset-based loans that align with your financial needs while ensuring that you are fully aware of potential risks and rewards.
How Malve Capital Can Help
At Malve Capital, we provide asset-based loans tailored to your needs. We understand the complexities of real estate transactions and the importance of fast, reliable funding. We offer a transparent and efficient lending process, enabling you to focus on what you do best – creating profitable real estate projects.
Our loan programs cater to a diverse range of projects. We take the time to understand your needs and financial objectives before offering a solution, ensuring that our loans align with your success. With Malve Capital by your side, asset-based lending becomes less of a challenge and more of an opportunity.
Talk To An Experienced Asset-Based Lender Today!
Launch your next real estate venture with confidence. Let Malve Capital be your financial partner, turning your real estate dreams into reality. Contact us now to learn how.