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What's It Worth?

If there's value in your inventory or receivables, you may be able to borrow against it to help fund the growth of your business.

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This story appears in the March 1999 issue of Entrepreneur. Subscribe »

If there's easily recognizable value somewhere, anywhere, in your business, you can generally get a loan against it to help fund the growth of your company.

This is the fundamental idea behind so-called asset-based loans--a potent source of funding for established small businesses, according to William Barnett, an attorney with the law firm Herrick, Feinstein LLP in New York City who specializes in asset-based lending. Specifically, he says, "Asset-based lending is formula lending based on the liquidation value of accounts receivable and inventory."

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