Hard Asset Based Loans [Everything You Need to Know]

Hard asset-based loans are one form of commercial finance.  It is when the borrower uses a real asset or real property as collateral to secure the loan. An asset-based loan business loan that is secured by collateral or assets is.

The use of the term “Hard Money” specifically is in reference to the risk associated with this form of business lending. As such, hard money loans are considered riskier than traditional commercial banking loans, and as a result, will have higher interest rates.

What Is A Loan Asset?

When you are looking for an asset-based loan, sometimes referred to as ABL, many types of assets qualify to secure the loan.  These can include cash, stock and bonds, real estate, and certain types of equipment.  The type of asset can also include inventory and accounts receivable.  

What Is Cash Flow Based Lending?

There is a difference between cash flow lending and hard asset-based loans.  The primary distinction is that cash flow lending allows the business to borrow money based on its current and future cash flow projections.  The company is borrowing money from future revenues.  

What Are Hard Asset Based Loans?

Hard asset-based loans are a type of commercial financing.  It is a loan option that describes when the borrower uses a real asset or real property as collateral to secure the loan. A business loan that is secured by collateral or assets is an asset-based loan.  The advantage is that a well-established company can get financing much quicker than waiting to have assets or collateral appraised.  The downside is that the credit ratings of the company must be outstanding with a positive EBITDA (earnings before interest, taxes, depreciation, and amortization).  

The use of the term “Hard Money” refers specifically to the risk associated with this form of business lending. As such, hard money loans are considered riskier than a traditional commercial banking loan and as a result will have higher interest rates


The reality is that by the nature of the loan, a hard money loan usually is an asset-based loan. Remember that asset-based lending is backed or secured by collateral or assets. The term hard money signifies the increased corresponding risk associated with this type of loan.


If these loan products are significantly more expensive than a traditional bank term loans, then why do business owners look for this type of loan? The reason is simple. They are easier to secure than a bank loan or traditional financing options. It is also not uncommon for banks or credit unions to require stringent underwriting requirements, including a high personal credit score, three years individual and business tax returns, detailed financial statements like P&L, and balance sheet, to name but a few.

A Harvard Business Review suggests that you must visit almost three banks and devote some twenty-eight hours to paperwork preparation to apply for a bank loan. This process lone is enough to turn off the average, busy business owner.

What are the Benefits of a Hard Money Loan?

Hard money lenders generally provide faster decisions.  One reason is that credit history usually is not a factor. As a business owner, do you find the need for additional cash to take advantage of opportunities?  Do you need more money than the bank offers?   These loans are ideal for business owners who instead find new opportunities rather than trying to raise capital.

Why is Asset Based Lending an Alternative?

Asset-based lenders provide loan programs for those that don’t qualify for traditional bank financing.  It can be for business owners that need fast business loans or money for a deal or opportunity NOW.  Maybe you need bridge loans.  The asset-based loan is for those that want less expensive business funding than pure hard money loans. 

For the business owner, it can be as simple as wanting to help improve their cash flow.  Other reasons for the asset-based loans are for an equipment loan or working capital.   These business loan options can provide a way to reduce debt, pay off tax liens, or other credit issues or as short term loans.

Here are two quick questions to see if you qualify. 

  1. Do you own a lot of equipment or real estate? 
  2. Do you need access to business capital to keep your business running? 

If you answered “Yes,” you may be asking yourself, “Who qualifies?”

Small to medium-sized businesses (SMBs) that are unable to obtain traditional financing due to challenged credit or insufficient solvency.  If you find yourself in that situation and have unencumbered equipment and or significant equity in real estate (residential, commercial, retail, industrial), the hard asset-based loan may be a perfect fit.  Do you have guarantors with strong personal financial statements? 

Are you a new business with sufficient cash for required down payments and adequate collateral coverage?  Can you say “yes” to one or more of these questions?  If so, it can mean you are eligible to secure the financing you need.  

When do you need these asset-based loans? Anytime you need to purchase equipment to expand or even to start a business. Or you need equipment or working capital to pursue a highly profitable business opportunity, expansion, or acquisition finance.  

Are you looking to refinance existing high-cost debts or pay-off tax liens or other credit-damaging liabilities? Are you drowning in high-cost debts and or short-term working capital loans? Sometimes it’s for short-term working capital requirements or a combination of any of the above.

Sunwise Capital is a top finance company and a top asset-based lender. Our loans are typically highly competitive, and we stand behind our offers with a $500 guarantee.  Loan amounts are from $50,000 to $5M.  


  • Short term loans
  • Accounts receivable
  • Credit card loans
  • Credit lines
  • SBA loans
  • Commercial real estate loans
  • Unsecured loans
  • Equipment financing

We look forward to becoming your preferred financing partner!  Use our contact form to let us know how we can help.  

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