Glossary Term
Asset-Based Financing
Definition
Asset-Based Financing is a type of business funding where a company secures a loan or line of credit using its assets as collateral. These assets can include accounts receivable, inventory, equipment, or real estate. In the MedTech industry, this financing method is often used to support cash flow needs, such as funding research and development, scaling production, or managing operational expenses.
Relevance to the MedTech Industry
Asset-Based Financing provides MedTech companies with access to working capital without requiring equity dilution. This funding model is especially useful for capital-intensive operations, helping companies navigate the financial demands of manufacturing, regulatory approvals, and market entry while retaining control of the business.
Additional Information & Related Terms
Working Capital Often supported through asset-based financing to maintain cash flow.
Equipment Financing A form of asset-based financing specific to purchasing or leasing equipment.
Accounts Receivable Financing Uses outstanding invoices as collateral for loans or lines of credit.
Inventory Management Ensures optimal asset utilization, particularly for collateral in asset-based loans.