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Asset Based Lending

We have been purchasing notes, mortgages and real estate contracts for over a decade and we pride ourselves on a unique client experience at the best price possible.

If you are a landlord looking to expand your real estate holdings by using the equity in your existing properties then asset-based lending may be your solution. This loan product allows landlords in a competitive market to utilize the equity in their current real estate portfolio to acquire more rental properties. Here is everything you need to know about asset based loans before deciding.

Asset based lending definition: What is an asset based loan?

what is a land contract

An asset based loan, or the term asset based lending, refers to a loan transaction that allows an existing landlord to pledge the equity in their real estate portfolio as collateral in exchange for a loan in order to provide working capital for reinvestment or asset accumulation.

Benefits of asset based loans

how do notes work

One of the main benefits of asset based loans  are landlords can leverage their existing equity to recapitalize and scale current holdings. This will avoid having to engage in traditional and restrictive credit-based lending which comes with a multitude of hurdles including the big one: debt to income ratio.

Warnings - asset based loans

The primary risk to the landlord/borrower would be losing the collateral due to hardship or unforeseen circumstances that cause a decrease in rents. Non-payment would eventually mean that some or all of the collateral would be forfeited to the asset based lender in some capacity by the borrower. There needs to be a clear-cut investment strategy before implementing the use of asset based lending. Ignoring this could be costly for an inexperienced landlord/borrower.

Typical Asset Based Loan Criteria

The lending criteria of hypothecation loans are typically straightforward barring any special circumstances. 

1. Investment Purposes Only

Typically, asset based loans must be used in a way that supports an investment project. Due to this requirement, lenders may not lend to individual landlords. Most asset based lenders will only lend to corporations, not individuals using their personal name.

2. Loan Amount Minimums and Maximums

Most lenders will have minimum loan requirements somewhere in the $200,000 range. Typical loan maximums could reach $10,000,000, depending on the size of the collateral portfolio and geo-location of the real estate.

3. Rates 

This could vary depending on many factors such as market conditions, global pandemics, macro-economic landscape, etc., but rates typically range between 9.99% and 11.99%. There are swings in both directions, depending on the risk and predictability of the collateral. 

4. Term

Borrowers could expect interest-only terms in most cases. Payback periods range from one year up to seven. Most hypothecation lenders like to be out of an investment within 12 months to 5 years, depending on the predictability of the collateral-mortgage note. Some will go longer if their investment appetite allows. 

5. Acceptable Collateral Types?

What is acceptable collateral when it comes to an asset based loan? Acceptable collateral will typically be: a 1-4 family residential property, a multifamily property or an apartment building. As long as the units are rented and earning income and the properties as well maintained and not over-leveraged, this one should be a breeze.

What’s the process to get an Asset Based Loan?

If you have a property or a property portfolio that you currently have under management, you can use it to receive a loan scenario to review from Amerinote Xchange’s asset based lending network. All you need to do is follow the six simple steps listed below:



  • Apply for asset based loan: Fill out a form to officially request your funds
  • Submit all collateral-note information: Submit all of the information that you have regarding the collateral properties such as pro forma
  • Receive a loan scenario for your consideration: Consider the terms of the loan and decide to move forward with it or not.
  • Lender due diligence: Asset based lender will perform their diligence, approve the loan
  • Funding: Funding will occur at a title company and/or through the use of a mobily notary. Transaction time-line is roughly 7 to 14 days depending on circumstances of transaction. 

Why Amerinote Xchange?

Amerinote Xchange is the fastest growing residential and commercial mortgage note buyer in the United States today. Our size allows us to participate in many facets of the mortgage and real estate spaces. We begin with a consultation on your asset based lending strategy in order to get you across the finish line in as little as 15 business days. When it comes to using a rental property as collateral, the chances of successfully reaching your financial goals and securing the highest loan amount become greatly increased when using the right source. Let Amerinote provide clarity when navigating the high waters of asset based lending.