This type of funding is usually based on the account receivables of the business plus some other hard asset. Using these as collateral, the funder sets up a Credit Line for the business.

Bank lines of credit are quite common. However, what is not as well known are the private companies that offer non-bank lines of credit. The qualifications for these credit lines are usually much more lenient and flexible than those with the banks. They also tend to be willing to offer larger credit lines than a bank would for the same business conditions. The security for the lender is usually one or more assets such as receivables, inventory, equipment, and real estate (business or personal). These lines typically start at around $100,000 and go up to about $3,500,000. The costs tend to be lower than for factoring (see Invoices) and the borrower is normally stronger than a factoring borrower.

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