Advantages of the Exchange vs. Asset-Based Lending
Asset-based lenders make secured loans against certain business assets – such as accounts receivable, equipment and inventory – which you offer as collateral. Asset-based loans can be expensive and require an all-asset lien on your business.
| Asset-Based Lending | The Receivables Exchange |
|---|---|
| Costly: Only grant capital up to about 80% of the value of accounts receivable. Plus expect to pay fees on everything from legal fees, early termination, facility and collateral management, to name a few. | Affordable: 85%-93% Average Advance Rate; 1.0% Average Discount Rate |
| High Risk: Requires personal guarantees, restrictive covenants and liens on all of your assets. | Low Risk: No personal guarantees, covenants, all-asset liens, and does not subordinate debt. Only take a lien on the receivables you are selling. |
| Extremely Inflexible: Long-term contracts, rigid borrowing terms and extensive auditing are standard. | Superior Flexibility: Choose which receivables to sell and use the Exchange when you need it. |
| Slow: Asset-based loans can take up to 30+ days to be funded. | Fast: Transactions happen in real time and you can get cash in as little as 24 hours. |