Business Equity Loans

Business equity loans draw from the two types of equity in your business: tangible and intangible.  Both reflect value in your business now.  And both must be prominent in your business plan.

Tangible assets generally refer to specific items such as inventory, buildings, and equipment (things that actually be touched) and are able to be controlled somewhat. This means that you can control how much inventory you carry in your store and what type(s) of equipment you use.

Intangible assets are nonphysical resources (things which cannot be touched) such as patents, copyrights, trademarks, or computer programs.  Other intangible assets are not so obvious, such as a mailing list for an online business.  This asset is very real, and is certainly capable of generating income.  So it is indeed an asset, an intangible asset.

When valuing your assets, consider only the present value of the assets when you are looking for an asset based loan.  To claim that your patent WILL be worth $50 million just won't hold water.

All of these assets will be taken into consideration when applying for any business equity loan.  At this point a formal lien would be placed as security on the business property. 

Finding Your Business Equity Lender



A niche bank is usually the best bet for an equity loan.  This is a bank that knows your industry well and can evaluate the assets in your business pretty quickly and accurately.  To locate such a bank, check with the finance people you already work with, especially leasing companies.  They could very well have contacts in the industry that could help you.  Scour your business publications for ads as well.  There are literally hundreds of these niche banks around, so find yours.

The other good option is a credit union in your area.  This tends to be a very underused source of business funding, and equity loans are right up their alley.

Whatever your situation if you have some equity built up in your business, you very well might be able to use your assets to obtain a business equity loan to help expand your business.  Go in prepared with a strong business plan and you will be on your way.

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