An asset-based loan or asset utilization loan uses your assets as income. Perhaps you are a retiree with a small fixed income, or a business owner or an established company that needs to maintain a high cash flow, the ease and benefits of asset-based loans and mortgages have made them a popular solution for borrowers.

With an asset-based loan, which is also sometimes referred to as an asset depletion loan borrowers are granted a loan based on their assets. An asset-based loan or mortgage allows you to utilize the assets you have already invested in to secure the cash you need now.

Asset utilization loans are perfect for retirees, investors, and/or self-employed borrowers that have assets on-hand.

How does an Asset-Based Loan Work?

With this type of lending, your income will be calculated based on metric using your existing assets. The amount you are granted for your loan, known as the borrowing base, will be established based on a percentage of the assets value.

The borrowing base and loan terms will be determined by the lender.

Benefits of an Asset-Based Financing

As with any type of borrowing, there are pros and cons to an asset-based loan.

The primary benefit of an asset-based loan or mortgage is that you can make use of assets you already have, regardless of your current financial status. This means that your current income will not be used as a factor for the loan approval. Asset-based mortgages are designed for home buyers and homeowners who have significant verifiable assets and would benefit from alternative loan qualification.

While asset-based loans typically have slightly higher interest rates, Beam Lending Group has a lending relationship with several investment banks giving them access to wholesale asset-based mortgage rates for the most favorable loan terms.

Business owners can do an asset-based cashout refinance home loan to fund their business.

What is Considered an Asset for a Loan?

The types of liquid assets that can be used to qualify are:
• Bank accounts (checking or savings)
• CDs (certificates or deposits)
• Investment accounts (stocks, bonds, and mutual funds)
• Money market accounts

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