What is asset-based lending?
A form of asset-based finance that uses assets on your balance sheet as security against lending.
Asset-based lending is a form of asset-based finance that uses assets on your balance sheet as security against lending.
This includes physical assets such as:
- debtors
- stock
- equipment
- machinery
- property
It can also include intangible assets such as intellectual property (IP).
Flexible
There are few restrictions on how you can spend the facility.
Quick
If you meet the eligibility criteria, it can take as little as four weeks to receive the money.
Retain control
You can borrow and keep hold of equity.
Options
You can use other forms of finance alongside asset-based lending.
Stable
Your terms for repaying the money you've borrowed can be fixed, allowing for better, clearer planning.
Cash flow
Improve the money you have coming in by leveraging the value of untapped (unencumbered) assets.
Your credit report
Lenders will conduct credit checks and due diligence to determine your eligibility. A hard credit check will show on your credit report and may affect your credit rating.
Charges
If you default on payments or attempt to pay off the loan early, you may face charges. Late payments may also affect your credit report.
Potential to lose assets
If you fail to make your repayments, the lender may seize the asset you've put up as security and sell it.
Are you an established business with assets and a trading history?
Without assets or a trading history, lenders will not be able to lend your business money.
Do you have assets of value on your balance sheet?
Their value could reflect the amount of finance you’re eligible for.
Do you have detailed and accurate financial statements covering your trading history?
Asset-based lenders base their decision on:
- your financial performance
- your trading history
- the value and type of assets you hold
In your financial statements, this information must be set out clearly and show your ability to repay the facility.
Do you have commonly sold inventory?
If you’re using stock or inventory as security for lending, you need to show that you've sold it. This shows you have money coming in regularly to pay off your facility.
How much are you looking for?
Asset-based lenders will consider how much finance you're seeking. Typically, they provide facilities of £5m or more. However, some providers will also offer facilities worth £1m and above.
Here are some important questions you'll need to consider before proceeding with borrowing from an asset-based lender:
- How long is the borrowing period?
- What is the interest rate on the facility?
- What is the advance rate against the various assets?
- How much will I pay for the finance facility in the long run?
- Are there charges for early repayment?
There are specialist asset-based lenders in the UK, as well as lenders – including high-street banks – who offer asset-based lending products. You can find these by searching online.
To find out if asset-based lending is right for you, use our finance finder tool
For a clearer idea of what you need to do to prepare your business for asset-based lending, use our checklist
Other finance options
Corporate Venture Capital
Corporate Venture Capital - Investors like
An early stage business - no revenue or profit is needed - willing to give up a share of control.
Corporate Venture Capital - You're looking for
£1m+ of finance within 6-12 months of your application for things like acquisition or research and development.
Find out more about Corporate Venture Capital
Purpose of financessss | Acquisition, research and development |
---|---|
Amount of finance | £1m+, depending on business |
Duration of finance | 3-5 years |
Cost of finance | None |
Time of finance | 6-12 months |
Business stage | Any |
---|---|
Annual turnover | Depends on the business |
Sectors | All |
Regions | All |
Expansion Capital
Expansion Capital - Investors like
Post revenue, profitable and growing businesses with a turnover typically between £5m and £50m. Businesses need to be willing to give up a stake in the business in exchange for finance.
Expansion Capital - You're looking for
Between £2m to £20m, depending on the shareholding you’re offering, to create new products, enter new markets, acquire other businesses or invest in new systems or equipment to drive growth.
Find out more about Expansion Capital



Purpose of financessss | Create new products, enter new markets, acquire other businesses or invest in new systems and equipment to drive growth |
---|---|
Amount of finance | £2m-£20m (depending on % shareholding acquired and value of company) |
Duration of finance | 3-5 years |
Cost of finance | Due diligence and legal fees will apply. If you appoint an advisor, they will expect a retainer fee |
Time of finance | Minimum of 3 months but can be up to a year |
Business stage | Post-revenue, profitable and growing |
---|---|
Annual turnover | £5m-£100m |
Sectors | All |
Regions | All |
Venture Capital
Venture Capital - Investors like
Early stage businesses, regardless of whether they have made a profit or revenue, with an annual turnover of less than £3m.
Venture Capital - You're looking for
Significant growth and £1m+ of finance within six to 12 months with the option for multiple funding rounds.
Find out more about Venture Capital



Purpose of financessss | Acquisition; research and development |
---|---|
Amount of finance | £1m+, depending on funding round |
Duration of finance | 5-10 years |
Cost of finance | None |
Time of finance | 6-12 months |
Business stage | Early stage; no revenue or profit needed |
---|---|
Annual turnover | Depends on the business, but is often below £3m |
Sectors | All |
Regions | All |
Regional support
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