An asset is anything tangible, and that adds to the overall value of the firm. An asset can be either a fixed asset or current assets. Fixed assets are those assets that are fixed. Such as, land, building, plant, machinery etc. These assets are not easy to convert into cash. They are very highly rigid and are not easily convertible into cash. Current assets are those that are readily convertible into cash. They are highly liquid assets. Examples of current assets are stock, loose tools, cash at bank etc.
Many companies and other organizations require finance for both long term as well as short term needs. These financial requirements have to be met in the best and cheapest way. For this, they may raise funds through borrowing (debt capital) or by increasing their share capital. Debt financing is preferred when they do not want to dilute their management control. Debt capital is also raised by asset financing.
Asset financing refers to the raising of funds on credit by keeping an asset as a security. The lender of funds requires the asset as security as the repayment of both interest as well as the principal amount may not be regular and guaranteed. The value of the asset taken as security is initially calculated, and then a loan or credit line to the extent of even 85 % is given to the borrower of funds. A reason why the asset financing is being used to the height that it is being used today, is because of the many advantages you can avail of when you opt for asset financing. The main advantage being that the immediate requirement of funds or working capital etc can be ready availed of and also without much problems and time taking procedures for attaining the loans on credit. The main two questions that the lender has to find answer to are:
* Find out the value of the asset taken as a security
* To find out whether or not the asset actually and truly belongs to the borrower.
There are also various asset finance vacancies that are available such as
* Credit analyst
* Business manager
* Business development manager
* Collections manager
* Operations manager etc
The asset financing vacancies and their requirements and qualifications vary from organization to organization. But the finance sector is one of the sectors that have the maximum scope.