From books and articles to training programs designed solely for asset-based lenders, there are many different educational opportunities for those in the banking industry. Not only will you need to possess a firm grasp on the basics of asset based lending but also keep up with the latest methods and technological advances.

It's always good for anyone in your banking institution to learn more about asset-based loans. Not only will it improve your skills and further your knowledge, in turn you'll be able to provide better customer service, setting yourself apart from competitors.

Consider the following information:

1. Many different positions within asset based lending companies will need job-specific training, from audit managers to loan administrators and account executives.

2. Make sure associates at your asset based lending company understand the difference between asset based lending and traditional commercial avenues.

3. Conferences and live seminars for asset based commercial lenders also offer the extra perk of networking with industry professionals.

Action Steps
The best contacts and resources to help you get it done

Read articles for your asset-based lending education and training

The lending industry revolves constantly. For the most up-to-date information, find web articles on asset based financing. Be careful to rely only on credible information sources.

I recommend: Browse the ABF Journal Article Directory to find items of interest, or read through this story from Open Capital.

Obtain books for asset based lenders

For more in-depth education, turn to books written on asset based financing. Although they won't be as timely as online articles, the basic principles will have remained the same. You'll most likely be able to hang onto a book much longer, too.

I recommend: Browse the list of books available through Practising Law Institute. There are three options related to asset based financing. Read the CPA Journal's review of "Asset Based Finance: Proven Disciplines for Prudent Lending" by Gregory F. Udell.

Attend asset based financing conferences or seminars

Experts in the field lead conferences, seminars, classes and workshops all across the country. Not only will you gain knowledge, you'll also be able to network with others in the industry. You'll want to make sure to register ahead of time, as class size is generally limited.

I recommend: Check BankerResource.com's list of upcoming live teleconferences on asset based lending; the International Factoring Association lists more events. The Commercial Finance Association provides education programs on a number of banking topics including international asset based lending and asset based lending and factoring basics geared toward new businesses. Clear Choice Seminars presents on-site training seminars led by an asset-based lending veteran.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  While asset based lending rates can be higher than traditional rates, you'll want to negotiate a fair rate for your customer. Consider how long the client has been in business and double check their credit. You'll also want to be up front with the customer about any other fees that may be involved.

For many entrepreneurs, particularly those just starting out, raising money can seem like an insurmountable challenge. Companies with little to no track record can find it extremely difficult to secure a bank loan. But don't let that deter you. In fact, asking your local banker to lend you money may not be the wisest decision when there are other ways for a small business to raise funds.

Bootstrap financing means helping yourself without the direct help of others. Think of all the assets, both tangible and intangible, that you and your company have. You can finance your company's growth by leveraging these assets.

Three primary sources you should consider when seeking to raise internal capital are:

1. Suppliers. They want to see you succeed because your success translates into higher sales for them.
2. Real estate. There's equity waiting to be tapped.
3. Customers. They are your biggest resource. Use them.

Action Steps
The best contacts and resources to help you get it done

Ask for trade credit

Suppliers generally will grant regular clients credit for 30, 60 or 90 days, without interest. When you are launching a new business, getting these trade credits will be difficult, but try to negotiate them.

I recommend: Speak with the owner of the business or the person who handles the supplier's finances. Ask the supplier to give you 90 days' credit while you only extend 30 days to your customers. Business Owner's Toolkit has excellent advice on where to find and how to use trade credit. MasterCard has a good online booklet about cash management in general.

Use a factor

A factor is a business that buys the accounts receivables of other businesses. When done right, factors reduce your internal costs and free up cash flow by getting you money that would otherwise be unavailable.

I recommend: AdvanceMe gives a lump sum payment when it buys a fixed dollar amount of a business' future sales at a discount. Capital Solutions offers a free financing evaluation. Also, many of the major banks have a factoring division like Wells Fargo's Business Credit program.

Tap your customers

Sometimes the fastest way to generate internal capital is to get it from your customers. Invoice them for products and services before delivery. That way you will be using other people's money to finance your business operations.

I recommend: Get free advice from the counselors at SCORE. AllBusiness has a resource called "60-Second Guide to Collecting Payment."

Unleash the equity in your business

If your home has appreciated in value, draw down some of the equity through a home equity line of credit. If you need to acquire real estate for your business operations, lease instead of buying.

I recommend: Talk to your mortgage lender for more details. Check out current home equity line interest rates on Bankrate, E-Loan and Lending Tree.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Register your company with the business credit bureaus. While not required, it helps ensure that suppliers are reporting your payment history. A record of consistent and timely payments builds your company's financial trustworthiness.
• •  By using internal sources of capital, you help ensure that down the road your business will be worth more because it has less debt. Your company will save money by not paying interest on traditional bank loans.
• •  With less conventional debt, your business will look financially stronger to future creditors and investors who want to see a healthy balance sheet.

A company might turn to an asset-based loan when all other avenues have been exhausted. Rather than getting a loan secured by a mortgage or bond, the company would put up an asset as collateral. In this context, an asset can be anything from inventory to accounts receivable; in some cases, it may even refer to intellectual property such as the rights to a drug or software program. In the event the company fails to repay the loan, the lender owns the asset.

Action Steps
The best contacts and resources to help you get it done

Factoring and accounts receivable financing

Accounts receivable financing is a type of asset-based lending, primarily for businesses that provide services to other businesses. It allows a company to open a revolving line of credit backed by its account receivables. Factoring is slightly different; in many cases, the lender will control collections to make sure it gets paid.

I recommend: First Capital offers factoring as one of its financial products, and gives a nice rundown of what factoring is and what types of businesses may qualify. 1st Commercial Credit calls its service accounts receivable financing.

Working capital

Companies often secure asset-based loans to get working capital, such as the money needed to continue paying vendors and employees. If the company turns to factoring or asset-based lending, it's probably because it has money tied up in inventory, or is not effectively collecting on debts.

I recommend: Investopedia offers a concise explanation of working capital.

Field examinations

An asset-based lender must verify the value of the collateral a company puts up to secure an asset-based loan. This process involves forensic accounting to make sure the company's books are in order, as well as evaluating the worth of a company's inventory.

I recommend: Freed Maxick ABL Services offers field examination services for asset-based lenders that do not have an examination team in-house. Its website has a comprehensive overview of the services it provides.

Credit risk analysis

Asset-based lending is riskier than traditional mortgage-backed lending; companies usually seek asset-backed loans when they do not have a long operating history, or just have bad credit. Credit risk analysis is the process of determining the quality and liquidity of a company's collateral.

I recommend: Goliath, a resource for business information, carries an article on risk management as it relates to asset-based lending.

Tangible asset

A tangible asset is physical property, such as real estate or equipment, owned by a company; inventory, intended for customers, does not count. When accessing a company's worth, an asset-based lender will usually evaluate its tangible assets.

I recommend: US Business Finance explains what type of collateral is acceptable to secure an asset-based loan.

Intangible asset

Though it can be difficult to assign value to intangible assets, they are often worth a lot. An intangible asset can refer to intellectual property, including patents, copyrights or brands. Tangible assets have traditionally been used to secure asset-based loans, but intangible assets are emerging as acceptable collateral.

I recommend: AllBusiness.com has an article on intangible assets and asset-backed lending.