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Asset Based Lending

Any type of loan secured by an asset is known as a asset based loan. Asset based lending is normally used when more conventional routes of raising funds have been exhausted. In many cases this is used when organizations have a struggling financial status. Many people consider it similar to subprime lending.

In most instances these types of loans are tied to accounts receivable, equipment, inventory, etc. Asset based loans are also accompanied by high interest rates, potentially making them very lucrative options for parent companies. 

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