Asset-Secured Capital



Asset-secured capital is debt backed by a real, valuable asset — real estate, equipment, infrastructure, or contracted cash flows. Because the lender has a first claim on something tangible, you can borrow at a lower cost and on a larger scale than unsecured options allow. It’s the workhorse of acquisitions and development deals from roughly $5–10 million on up.

The core structure: first lien, up to 80% LTV

The standard facility takes a first legal charge (first lien) on the asset and funds up to 80% of its value. That means you — the borrower — bring the remaining 20% as equity. That 20% isn’t a fee; it’s your skin in the game, and it’s usually held at a regulated institution as proof of funds. The lender wants to see you have real capital at risk alongside them.

What can secure it

• Income-producing real estate — the most common collateral, from multifamily to mixed-use.
• Equipment and machinery — logistics, manufacturing, energy.
• Contracted cash flows — rated receivables, off-take agreements, recurring revenue.
• Infrastructure & energy assets — larger, specialized facilities.

The cost and the timeline

Because the debt is secured, indicative pricing tends to land in a low single-digit to mid-single-digit range (roughly 3–6%, with complex or riskier deals running higher). The trade-off is time: a term sheet typically takes 3–4 weeks, and funding closes in 90–120 banking days once diligence is complete. This is not a “funded in 48 hours” product — it’s a structured facility.

The 20% gap and the mezzanine fill

Not every borrower has the full 20% in cash. A common pattern is to fill that gap with a second lender providing mezzanine capital at a higher rate (often 15–18%). The first-lien lender won’t accept a pari passu (equal-ranking) second position — they require first-lien-only — but a subordinated second can sit behind them. This stacks cleanly but raises your blended cost of capital.

Non-recourse, in many cases

Where the asset’s value supports it, these facilities can be structured as non-recourse — meaning the lender’s recovery is limited to the asset itself, not your personal balance sheet or other operating businesses. That’s a significant protection for sponsors running multiple deals.

Asset-secured capital trades speed for cost. You give up 90–120 days and a first lien; you get a lower rate, larger size, and often no personal guarantee.

What you need to qualify

• A principal or decision-maker on the borrowing entity (not a broker).
• An asset of sufficient value (real estate often from $5M; other assets from $10M).
• Proof of the 20% equity, held at a regulated institution.
• A viable, documented project with a clear exit (refinance, sale, or cash flow).
• Full KYC/AML documentation.