Unlocking Quick Cash: Why asset-based lending is on the rise

Unlocking Quick Cash: Why asset-based lending is on the rise
Charles Meyerowitz, CEO at Lamna Financial

With traditional banks tight credit policies, prudent credit risk appetite and increasing red tape, many entrepreneurs are turning to an asset-based approach to finance.

In fact, Investec’s latest Private Equity Trends 2024 report, confirms that almost half (48 percent) of their general partners are using asset-based lending as an alternative source of financing.

“When financial emergencies arise unexpectedly, individuals are often left scrambling for immediate solutions to access cash,” according to Charles Meyerowitz, CEO at Lamna Financial. “These factors combined with cutting costs, greater flexibility and access to cash is driving the rise of asset-based lending.”

“Instead of unsecured loans or payday loan, asset finance is a quick and virtually risk-free reliable way to access funds and unlock your wealth fast, without the hassles of credit checks or lengthy approval processes,” he explains. “Using valuable items as collateral to secure a loan is a convenient option for those in need of short-term financial assistance.”

Meyerowitz, provides a comprehensive guide on how to utilise asset-based lending to unlock quick cash.

He says the first thing you should look at is assessing your valuables. “Many people don’t realise the treasures they’re sitting with that can be used as collateral to unlock their wealth, just about anything with value can be used, so start by identifying items of value you own, everything from vehicles, trucks, jewellery, luxury watches, designer handbags or art,” he says.

“The next step is to ensure that you’re accessing finance through a reputable lender,” he explains. “At Lamna we are regulated by the National Credit Regulator and for the past decade have advanced over R2-billion in loans with over 11,500 clients and companies assisted.”

Meyerowitz says that once you have identified the item or items, the process is incredibly swift, usually no more than 24-hours. “You can apply online and then bring your valuable item into one of our branches nationwide, knowledgeable professionals will evaluate your items based on factors such as condition, market demand, and resale value to determine the loan amount.”

He notes that the loan terms are agreed on when we make you your offer, typically a loan of R10,000 with a three-month repayment period will have R500 of monthly interest with a small once-off initiation fee.

“There are no penalties of paying back your loan sooner, but you must ensure you fully understand the terms and conditions of your agreement before finalising it,” he adds. “Once you have completed this process you receive immediate cash in exchange for your valuables as collateral, your item is then kept in a secure environment until your loan is repaid and we return your item to you.”

What’s more Meyerowitz adds is that we are an online operator so all the interactions prior to coming into our office are all managed online. “We’ve been embracing the technology available to negate the need to visit a pawnshop, which effectively provides a more discreet and secure way to transact,” he adds.

“Asset-based lending is far less risky than an unsecured loan, with no judgements, recourse to the borrower or credit record issues if you fail to repay it,” he adds. “If you fail to repay your loan your item becomes collateral, you simply don’t receive the item back and you simply walk away without the stress of having debt to pay.”

Meyerowitz advises the best way to ensure your loan continues to work for you is to have a flexible repayment option and sticking to the payment timeline. “Notably, over 98 percent of all loans that we secure are repaid within the first few months and in the last year, we have seen a 20 percent increase in first-time clients and a 30 percent increase in the value of our loan book for the same period.”

“Asset-based lending offers a convenient and accessible solution for individuals seeking immediate access to cash,” he says. “At Lamna, we strive to provide our clients with a seamless, discreet and transparent experience, ensuring their financial needs are met with professionalism and integrity.”

For more information on how to utilise an asset-backed loan to unlock quick cash, contact Lamna via the www.lamna.co.za.