Through the use of specific asset-based finance structures enterprises can leverage existing but often under-utilized assets, such as receivables, purchase orders, or inventory. In some instances, this is facilitated through traditional liens on hard assets, in others, through variable repayment structures linked to inventories or receivables. In other cases, though less commonly applied to early stage companies, use of performance- and cash flow-based agreements, similar to revenue based financing and energy performance contracts in the US.
In addition, a variety of techniques can be used to reduce credit risk, including partial credit guarantees, special purpose vehicles and escrow accounts for direct repayments, and use of hybrid financing techniques.