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Return To Factoring FAQ Archive   What is an asset conversion loan? Answered By Editor An asset conversion loan is a type of short-term loan with the expectation that the recipient of the loan will be utilizing the revenue received from the sale of an asset to repay the short-term loan. An asset conversion loan provides a simple way to deal with a temporary cash flow need. This kind of loan may provide anywhere from thirty days to six months for repayment of the loan. This is usually sufficient time for the borrower to sell an asset and secure the funds to pay off the loan. One of the most common applications of an asset conversion loan is to meet payroll when their is a lull in cash flow from outstanding customer invoices. Using a portion of the inventory as the asset, a company can approach a financial institution about the extension of a short term loan with the understanding that the company will sell off the asset and use the funds to pay off the loan. keywords: Factoring | Debt Factoring | Invoice Discounting | Accounts Receivable | Cash Flow | Asset Conversion Loan | Payroll Instant Working Capital Commercial Loan Finance

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