Loans issued based on assets have been gaining a lot of popularity in Kenya over the recent past. That probably is because they offer numerous benefits compared to various other types of loans. Qualifying for such a loan is a lot easy, which is why many Kenyans opt for asset finance. Some of the top reasons why Kenyans go for these types of loans are highlighted below.

Improved Liquidity

Improved liquidity is probably among the top pros that you can get from using an asset-based financing option. You can gain predictable cash flow and financial stability form asset-based loans, as long as you use them correctly. Such benefits can help you to stabilize operations for your company, irrespective of how rapidly it is growing or how tight the cash flows are.

They Are a Lot Easier to Access

As mentioned earlier, it is a lot easier to qualify for asset financing compared to other financing options that are available in Kenya. For businesses, the requirements are usually as simple as having reasonable financial controls and proof of profit over the past couple of months. Even without all that, there is still a possibility of getting the loan if you have enough assets that can be used as collateral. The assets that you can leverage might vary, but accounts receivable is the asset most Kenyan entrepreneurs like to leverage.

They Have More Flexibility

Another top reason why Kenyans prefer asset-based finance is because they offer more flexibility. That means that you get fewer limitations regarding how you can spend the money you receive as a loan. Given that the financing is based on assets, you can even get access to more finances as your business grows, and your assets increase in value or otherwise. There will be no need to go through the complete underwriting process again.

They Have Fewer Covenants

The covenants for asset-based loans in Kenya are fewer compared to the conventional credit lines. As a result, staying compliant and managing the line is also a lot simpler. The terms are also usually straightforward, which goes well with many Kenyans.

They Have Lower Costs

A majority of the asset financing options in Kenya have lower costs in comparison to the alternatives. That includes much lower interest rates, which makes the financing option among the cheapest available. Such a distinct advantage makes asset-based loans the most preferred financing option for Kenyans.