Hard Money Loans

Asset Based Lending

Asset-based lending is a loan where the lending decision is primarily based on our opinion of the value of the real estate involved, rather than the credit worthiness of the borrower. While a borrower’s ability to pay the loan is considered, the approval decision and loan to value rests primarily upon the value of the property.

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Asset Based Lending Details

Asset-based lending refers to a loan given to a company or individual based on the value of its real estate, rather than strict reliance on credit scores. These loans are often used for working capital, refinancing, debt consolidation, or financing for mergers and acquisitions.

Loan Fees

The fees associated with asset-based loans vary based on factors such as the loan amount, the term of the loan, and the value of the property. It’s important to discuss these details with Larry the Lender to understand all costs involved.

Property Criteria

For asset-based lending, the property criteria can include a wide range of assets. In the case of real estate investing, this means commercial property, non-owner occupied residential property, and raw land. The key factor is that the assets must have significant value and be owned by the borrower.

Loan Terms

The terms for asset-based loans can differ based on the lender and the specifics of the borrower’s situation. Typically, these are short-term loans, but the duration can be adjusted based on the borrower’s needs and the value of the collateral assets. At Larry the Lender, most of our loans are for six or twelve month terms.

Additional Collateral

In cases where a borrower wants to borrow more money than an individual property is worth, they can put up other free and clear investment properties in lieu of down payment, or to secure a higher loan amount.

Borrower Criteria

The main criterion for borrowers interested in asset-based loans is having valuable assets that can be used as collateral. While a borrower’s creditworthiness may be considered, the primary focus is on the value of the assets, which in real estate investment lending, means the subject property or properties.

Appraisals / Insurance

Before an asset-based loan can be issued, an appraisal of the assets is typically required to determine their value. At Larry the Lender, we are usually able to establish value without a formal appraisal. Additionally, insurance may be necessary to protect against loss or damage to any property being used as collateral, if that property has structures upon it.

Loan Programs Overview

Loan Programs Type	Commercial Loans	Residential Loans	Land / Lots Loans	Fix / Flip Loans
Do We Offer Them?	Yes	Yes	Yes	Yes
LTV	70-80%	70-80%	0-50%	70-80%
Minimum Loan Amount	$75,000	$75,000	$75,000	$75,000
Maximum Loan Amount	$5,000,000	$5,000,000	$5,000,000	$5,000,000
Loan Term Offered	6 or 12 months	6 or 12 months	6 or 12 months	6 or 12 months
Interest Rate Offered	12.99%	12.99%	12.99%	12.99%
Points Charged	2 or 3 based on term	2 or 3 based on term	2 or 3 based on term	2 or 3 based on term
Pre-payment Penalty	No	No	No	No
Insurance Requirements	Property, Windstorm	Property, Windstorm	N/A	Property, Windstorm
Flood Insurance Requirements	For Floodzone Properties	For Floodzone Properties	N/A	For Floodzone Properties
Lending Area	Texas Only	Texas Only	Texas Only	Texas Only
Special Requirements	Phase 1 - Loans > $1 million	N/A	Possible Survey	N/A

What Is Asset Based Lending?

Asset-based lending is a form of business financing where loans are secured by collateral or assets. In this lending arrangement, businesses can get a loan based on the value of certain assets like accounts receivable, inventory, machinery, or real estate. The amount of the loan granted is typically proportionate to a percentage of the asset’s value. This type of lending can provide businesses with the immediate funds they need for operations or growth. In the case of real estate investment, the only asset utilized is the real property owned or being purchased by the business.

What Properties Qualify for Asset Based Lending?

Both commercial and residential real estate properties can qualify for asset-based lending. Essentially, any property that holds significant value can be used as collateral for an asset-based loan. Undeveloped land, or individual lots can also be used as collateral.

Who Should Consider Applying for Asset Based Lending?

Businesses or individuals in need of working capital, those undergoing a transitional phase, or those looking to expand should consider applying for asset-based loans. This form of financing is especially beneficial for companies that possess substantial assets but face limited cash flow.

What Sorts of Projects Are Asset Based Loans Good for?

Asset-based lending can support various projects, property acquisitions, including business expansion, fix and flip renovations, operational expenses, restructuring, mergers and acquisitions, and even turnaround situations.

Why Choose Larry the Lender for Asset Based Lending?

Larry the Lender understands the unique needs of businesses in investors and offers flexible, efficient asset-based lending solutions in a timely manner. As a family-owned business, we prioritize transparency, ensuring our terms align with what is published on our website. We offer quick closings once all paperwork is in place, facilitating your business growth without unnecessary delays.

Benefits of Asset Based Lending

Asset-based lending provides businesses and real estate investors with immediate access to funds, using their assets as collateral. This flexibility can help them manage cash flow, seize growth opportunities, and weather financial challenges. Additionally, it often has fewer restrictions than traditional loans, allowing businesses more freedom in how they use the funds.

Asset Based Lending Application

Applying for an asset-based loan with Larry the Lender is straightforward. We evaluate factors such as the value of your assets and your ability to repay the loan. Contact our team today to start your application process.

Asset Based Lending FAQ

What is asset-based lending?

Asset-based lending is a form of financing where a business or investor secures a loan using its assets as collateral. These assets can include accounts receivable, inventory, equipment, or real estate. The loan amount is typically based on the value of the assets being used as collateral. As a real estate lender, Larry the Lender only utilizes real estate as collateral.

What are the benefits of asset-based lending?

Asset-based lending offers several advantages to businesses. It provides access to quick funding based on the value of existing assets, allowing companies to meet their working capital needs and finance growth opportunities. It is also a flexible financing option that can adapt to the changing needs of a business.

How does asset-based lending work?

Asset-based lending works by evaluating the value of a company’s assets and providing a loan based on a percentage of that value. The lender assesses the quality and liquidity of the collateral to determine the loan amount. As the business repays the loan, the available credit line may increase, providing ongoing access to working capital.

What are the risks of asset-based lending?

While asset-based lending can be beneficial, there are risks involved. If a borrower is unable to repay the loan, the lender has the right to seize and liquidate the collateral assets to recover the funds. It is crucial for businesses considering asset-based lending to carefully manage their cash flow and ensure they can meet the repayment obligations.

With Larry the Lender the asset at risk is the real estate property loaned against. Since the company was founded in 2010, Larry the Lender has always worked with borrowers to avoid foreclosure, only three properties have ever been foreclosed on by Larry the Lender.

Who are the top lenders for asset-based lending?

There are various financial institutions and lenders that offer asset-based lending services. Some well-known lenders in this field include banks, commercial finance companies, private equity firms, and specialized asset-based lending firms. It is advisable for businesses to research and compare lenders to find the one that best suits their specific needs.

Hard Money Lending Resources

Welcome to Larry the Lender, your trusted source for hard money loans. With years of expertise, we've become a leader in the hard money lending industry, offering tailored solutions to real estate investors. Our commitment to transparent, rapid, and accommodating financing has enabled countless clients to seize opportunities in the competitive real estate market. Let's dive into the details of our unique approach to hard money loans

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