What is asset-based loan fraud commonly referred to as?

Asset-based loan fraud is commonly referred to as floor-plan lending because this type of financing typically involves loans that are secured by inventory or assets. In the context of retail or automotive sectors, for example, a dealership may use floor-plan financing to purchase inventory (e.g., cars) from a manufacturer.

This financing strategy allows businesses to acquire goods without upfront cash but relies heavily on the value of the inventory as collateral. When fraud occurs in this space, it often involves inflating the inventory values or misrepresenting the assets to secure larger loans than what should be possible based on actual inventory levels. Thus, "floor-plan lending" specifically captures the essence of asset-backed loans that can become fraudulent when misrepresented, making it the most relevant term in identifying this type of fraud.