ASSET-BASED FINANCING

Methods of financing in which lenders and equity investors look principally to the cash flow from a particular asset or set of assets for a return on, and the return of, their financing.

The process associated with a lending institution authorizing a loan to a company against an asset or the assets of the company. Example: A business needs working capital to expand. The business owns a building free and clear. The building is an asset by which the lending institution will lend against as collateral.