Beyond Stocks: Understanding Private Debt and How Asset-Based Lending Adds Security for Retirees.
When traditional investments feel too volatile for retirement, many Baby Boomers start exploring alternatives. But what exactly are they? Alternative investments fall outside typical public stocks, bonds, and cash. One significant category gaining attention for income-seekers is private debt. Private debt involves direct lending from specialized funds (like those managed by Investor Underwriting) to companies, often small-to-medium-sized businesses, outside of public markets.
For retirees prioritizing security, a specific strategy called Asset-Based Lending (ABL) is particularly relevant. Unlike some lending based purely on a company’s projected earnings, ABL loans are secured by specific, tangible collateral – like accounts receivable, equipment, or inventory. The loan repayment is driven directly by the cash flow generated from this collateral.
Investor Underwriting specializes in this collateral-focused ABL approach. We believe securing loans with identifiable assets offers a clearer path to repayment and enhanced downside protection compared to relying solely on a borrower’s future business performance.
Our rigorous due diligence assesses both the borrower’s viability and, critically, the quality and value of the underlying collateral. This focus on asset security aligns with the capital preservation needs of many Baby Boomers entering retirement. Understanding the mechanics of private debt and asset-based lending is crucial for evaluating its role in a retirement portfolio.
Want to learn more about the security features of Asset-Based Lending? Talk to the specialists at Investor Underwriting.