In recent years, the asset-based lending market has grown significantly. It is projected to grow at a compound annual growth rate (CAGR) of 12.8%, from $697.75 billion in 2023 to $787.28 billion in 2024. This is good news for asset-based lenders, but it also requires a proactive approach by lenders to avoid facing losses. This guide will present the five best practices for asset-based lenders to consider in 2024. So, let’s head right to it!
- Diversify Asset Types
In 2024, it is recommended that lenders diversify their asset types instead of focusing on a single asset type. Market conditions can change, altering asset prices. So, if lenders have diversified assets, they can ensure a stable portfolio.
- Integrate Technological Advancements
Technological advancements are booming over the past few years. This means asset-based lenders should also integrate advanced technologies to improve asset tracking, risk assessment, and other business aspects.
- Regular Assessment
Asset-based lenders should regularly assess the condition of the asset and the performance of the borrower. This will help pinpoint issues early on and ensure that the right measures are taken in a timely manner.
- Continuous Communication with Clients
To avoid skip tracing or borrower default, it is important to maintain continuous communication with clients. Regular communication will lead to both better relationships with clients and a quicker method to resolve potential issues before it’s too late.
- Collaboration with Recovery Specialists
Asset-based lenders frequently deal with non-performing accounts, borrower default cases, skip tracing, or even asset recovery. These situations are frustrating and time-consuming and require specialized skills and resources. The best approach is to collaborate with a recovery specialist firm like ACS to tackle these situations.
ACS (Asset Compliant Solutions) is a specialized asset recovery firm that serves as the right hand for asset-based lenders. It offers comprehensive support to lenders involved with portfolio optimization, skip tracing, and asset recovery.
ACS is fully compliant and licensed in 50 states, holds 25+ years of market experience, and possesses 2,000 field agents across the U.S. The key services of ACS include:
- Collections: It can optimize collection processes and handle early to late-stage collections, focusing on maximizing recovery rates.
- Skip Tracing: It employs sophisticated techniques to locate defaulting or unresponsive borrowers. The team communicates and negotiates with the borrower to resolve outstanding debts effectively.
- Asset Recovery: It can help streamline the asset recovery process. Its years of experience and nationwide field agents lead to a high recovery success rate and seamless asset liquidating experience.
In short, ACS is what asset-based lenders need to optimize portfolio performance. Therefore, it is recommended that lenders collaborate with ACS and let professionals handle account irregularities.
Conclusion
As more businesses are looking to improve their cash flow outside traditional loan channels, asset-based lending is one of their top options. However, the market’s growth also brings scammers and other threats to lenders.
That’s why asset-based lenders need to focus on both growth and proactive safety measures. One ideal way is to collaborate with ACS. ACS’s exceptional services in optimizing portfolio performance, skip tracing, and asset recovery are what lenders need to secure their investments to help ensure sustainable growth.