Tips For Balance Sheet Assets Pledged As Collateral

Many banks provide working capital loans and secure themselves with assets as listed on the balance sheet. Some of these assets include accounts receivable and inventory that are a part of current assets. Machinery, equipment and vehicles are part of fixed assets, meaning that they have a longer lifespan than current assets. Normally fixed assets are listed on the balance sheet at book value. Their net value is shown after deducting accumulated depreciation. All other things being equal, here are some issues a lender should consider before making a loan: