September 8, 2010
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Many Thanks to our 2010 National Conference Sponsors
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| INTRODUCTION |
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| Asset-based financing expands the pool of capital and credit
Asset-based financing is the financing of particular equipment and vehicles and related items or services, primarily by way of lease, but also by secured loan or conditional sales contract. The specific assets financed secure the borrower's unconditional obligation to make payments over the term of the agreement. In this way, users of equipment and vehicles can use the value of the asset as security to finance its acquisition. This form of financing relies on cash-flow-based credit analysis. Because the financing company retains legal ownership of the asset until the lease end, it allows a business or person to qualify on generated cash flow rather than on a net worth lending formula basis as typically offered by traditional lenders. The services of the leasing industry are complementary to traditional banking and other financial lending in providing incremental capital to increase the pool of available credit in Canada and provide a vital competitive alternative in the financial services sector. Next |
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