Asset-based financing is a method of raising money by taking out loans to pay for a project or business and using the assets involved in that project or business as collateral and/or to generate return. For example, if your business manufactures cars, you can take out loans to pay for the necessary materials and costs of production, using the car factory as collateral. After you sell the cars you’ve produced, you would use the profits to pay back your loans and pocket the remainder.

Tags: asset-based financing, loans