SCORE is a group of retired executives offering free guidance for owners of business startups. If you are an owner of a recently launched company and would like some professional advice, SCORE members can definitely give it to you. They offer free counseling and workshops regularly. With their help, your business startup will increase its chance of becoming successful in all its endeavors.

What is SCORE anyway?

SCORE is an acronym for Service Corps Of Retired Executives. Today, however, it is referred to as SCORE, “Counselors to America’s Small Business.” It is an organization composed of volunteer active and retired executives giving free business mentoring services to different entrepreneurs all over the United States. Founded in 1964, SCORE offers seminars and workshops on a range of business topics. During the mid-1990s, SCORE started to provide small business advice through email to meet the shifting demands brought about by the information technology age. Over 8.5 million satisfied clients have availed of the services of SCORE to date.

SCORE, a non-profit organization, is the largest volunteer business counseling service in the nation and is also a resource partner with the Small Business Administration. The organization has around 10,500 volunteers spread over various locations throughout the United States and its territories. Business mentoring services are made available by both active and retired executives, as well as entrepreneurs, who contribute some of their time and skill as mentors to help new and established small businesses.

The combined experience and knowledge of SCORE volunteers could match the expertise and savvy of faculties in most business schools. The goal of the organization is very simple, and it is to help businesses, particularly startups and young companies, become successful by fostering a continuing relationship with the entrepreneurs and passing on their business knowledge that they have gained through experience.

Benefits Gained by Businesses from SCORE

The organization is focused on the formation, growth and success of small businesses across the nation.

The service provided by SCORE is free of charge.

Volunteer members of the organization are committed to help and educate the entrepreneur using the skills they gained from experience.

SCORE counselors provide business advice on various aspects of business management and formation.

The organization provides its services in a confidential fashion.

Counselors can assist in investigating market potential for a given product and provide guidance on cash flow management, as well as give advice on how to buy a franchise or business.

SCORE volunteers can also conduct review of business plans and offer suggestions on how to further improve the plans before submitting it to the bank.

How to Solicit the Help of SCORE

SCORE mentors are committed to helping your business success. If you are an owner of a business start-up, or an existing business, and would want some advice from SCORE mentors, you can always connect with them by visiting their website and choosing which option of receiving advice you would prefer.

Try to register on the SCORE website to be able to access all of their services. Once logged in, you will be able to look for mentors or request local and online mentoring, as well as register for workshops and seminars. This will come in handy, particularly if you do not have any idea if there is a SCORE chapter where you are now. You can also download templates and tools once you are registered.

You can also opt for an email mentor. Naturally, you also have to register on the website of SCORE to be able to browse the profile of their email mentors to enable you to select the one that is right for you.

Important Tips when Trying to Contact SCORE Mentors

Although it is true that SCORE mentors are ready to help out entrepreneurs, this does not mean that they would immediately provide advice to just about anybody who seeks their counsel. You must approach them in an appropriate and professional way, whether online or in-person. Show them that you are passionate about your business goals and are very excited about speaking with them. Obviously, you must not beat around the bush when contacting them by immediately stating why you wanted to speak with them. You might also want to try illustrating on how similar you are to how they used to be when they first started out.

Also, bear in mind that even though some of them are already retired, they might also be very busy with other endeavors. Under such circumstance, try to be considerate and ask for only a couple of minutes of their time. In this aspect, you must also ensure that you contact them at the exact time they prefer you to call or contact them. After the initial conversation or email, you might also want to send your SCORE mentor thank you letter and regular updates on anything they advised you to do. Finally, show them your gratitude by finding some ways to help them in the future. This would help a lot in terms of goodwill which would go a long way indeed in case you again need the services of a SCORE mentor at some point in time.

As a business owner it is important to make sure that you have the 4 C’s of financing covered when looking for financing. You do not need every answer to be “yes” but the more you have will improve your businesses chances of being offered financing. Understand the 4 C’s of financing will help you know what lenders are looking at when they are processing your business financing application.

What are the 4 C’s of Financing?

1. Business Credit HistoryHow has your business handled credit in the past? Have you shown that you are a safe risk by taking on business-based lending?
2. Personal Credit HistoryHow have you handled your personal credit in the past? Have you shown that you handle your personal finances well by doing things like making on-time payments and keeping credit balances low compared to their limits?
3. CashFlowDoes your business have sufficient verifiable revenue in bank accounts and/or tax returns?
4. CollateralDoes your company have any hard collateral or assets?

Increasing your businesses fundability

Answering yes to any of the 4 C’s of financing will greatly increases your businesses fund-ability. Most know the importance of their business and personal credit history. Managing your past credit by making all repayment obligations on time keeps accounts in good standing and increases your business and personal credit rating. Your credit history lets lender know if your business is a safe risk for them to talk, lenders are not in the business of loosing money just as you are not, this is why it is important to them to know you meet your repayment obligations and keep your credit accounts in good standing.

Approval for financing is not only about your credit history, your business needs to generate cash flow to ensure the bank you will financially be able to meet the repayment obligation. Showing positive daily bank balances and annual profits are important for business financing. Not all lenders require collateral but when financing rather large loans collateral may be requested.  Collateral can help your business secure financing without a personal guarantee.

Following the 4 C’s of financing will greatly increase your businesses fund-ability. It is important to pay attention to your business and personal credit history, maintain positive bank accounts and to have collateral so they your business is able to get the financing needed you keep things running smoothly.

Silent partner, in the financial sense, is a part-owner of a business but chooses, usually for a good reason, not to play a public or active role in the daily affairs of the company. Since they also own a part of the company, they are definitely entitled to a share of the profits generated by the business operations of that company. The percentage of profits that a silent partner is entitled to largely depends on the terms stated in the partnership agreement.

Why a Silent Partner?

As previously mentioned, a silent partner is a business collaborator who has a stake in a company but does not have any public involvement with it. Generally, a silent partner does not involve himself with the day to day affairs of the business and is only referred to as simply a shareholder or an investor.

Also often called a limited partner, a silent partner’s liability is normally limited to his investment to the company. In a sense, while the silent partner can potentially lose the money he invested, he cannot be held responsible for the obligations of the company.

There are a lot of reasons why a part-owner of a company may opt to become a silent partner. It is possible that such investor may only want to invest capital in a particular company and earn from its growth without actually participating with its business operations.

There are also those who wish to be silent partners because they wanted to keep their wealth under wraps or perhaps because they do not wish to be seen by other entrepreneurs as a good source of funds. This simply means that they want to invest their money in companies but they do not want others to know that they have the financial capacity to do so. By opting to become silent partners, they can invest without being known as a wealthy individual and thus, avoid becoming a target for others who might incessantly bug them about backing or supporting other ventures.

In some cases, a silent partner may want to invest his money in a startup but do not want others to know that they are doing so because knowledge about their involvement with the startup might interfere with the company’s long-term business model. For instance, a car manufacturing company may wish to buy a stake in an emerging brake systems company in the hope that it will be able to incorporate the system into its automobile line in the future. If the competitors become aware of this, it might tip them off on the future business plans of the car manufacturing company.

Having a silent partner on board is also beneficial to other partners within the company. The known partners of the company will benefit from the entry of additional capital from the silent partner and at the same time, get to maintain their operational control over the company. In effect, the named or known partners will be the ones making all the public decisions for the company but will have an additional person on board to share the risk with.

There are those who think that a silent partner does not have much responsibilities to the company he invested his money into. In reality, however, a silent partner sometimes has to step up to help the general partners in their decision making and also help keep the business going.

What are the responsibilities of a silent partner?

The silent partner’s responsibilities differ from that of the general partners. Among the major responsibilities of a silent partner are the following:

1. To Provide Funding

• The main responsibility of a silent partner is to provide funds to establish, as well as sustain, the company over time. They may be called upon to provide funds on a regular basis, especially during the initiation of the business.

2 .To Attend Partners’ Meetings

• Sometimes, a silent partner may be requested to attend meetings with general partners to discuss the company’s investment needs.

3. To Assist in Resolving Disputes

• While it is true that silent partners do not involve themselves in management affairs, they may be sometimes asked to step in to resolve any disagreement between general partners which might cause the demise of the company. A lot of businesses ended because of a gridlock between two partners. Under such circumstance, a silent partner can step in and assume the role of a neutral party in conflict resolution meetings before the opposing partners go to formal mediation.

4. To Assume the Role of a Mentor

• A silent partner can also assume the role of a mentor or guide, particularly when requested by general partners, to provide a valuable insight and expertise in crafting business plans for the company.

How to Find a Silent Partner

Having a silent partner come on board your business is a great way to obtain financing without jeopardizing control of the company. In most cases, a silent partner will agree to put money into your company without assuming any authority or voting rights.

If you want to attract a silent partner to your business, you might first want to create a professional business plan that centers on revenue projections. A lot of investors put their money in a company because they are very excited to become involved with a new business. In contrast, a silent partner usually focuses on the return on their investment, mainly because they have no actual interaction with the company. So try to create a business plan that demonstrates how your company can create a positive cash flow within a reasonable time.

You might want to approach some members of your family or friends. Since they already know you, they should have trust and faith in you. Try to round up your friends and family and tap them for various amounts. However, you must make it clear to them that they will not have voting rights or authority over the company. You can also try to approach angel investors. There are many wealthy individuals who can provide funds for business projects at the initial stage and who are amenable to becoming silent partners.

Some Tips to Consider When Talking To a Potential Silent Partner

Just like any other type of investment appeal, you have to demonstrate the desirability of your business, not only in its future plans but more particularly on its ability to generate profit within a reasonable period. An investor will be more willing to be a silent partner if you can make your business appear to be truly desirable. Developing a regular revenue stream, obtaining a major investment, and boosting the company’s image in the media can generate a favorable dynamic for your company, which in turn, can help you locate and attract a silent partner.

Later stage funding allows a mature business to embark on a major expansion project or develop a new product. It generates the needed financing to help a company attain its business goals of increasing its production, as well as increasing its sales volume. There are also instances when later stage funding can provide the financing needed by a company to help it achieve critical mass so that it can position itself better for an Initial Public Offering.

 What Actually is Later Stage Funding?

A later stage funding is an investment or financing required by a profitable, or breaking even, and established company for the development of a new product, or to finance a major capacity expansion. Usually common with companies expecting to go public within a year, later stage funding is structured so that it can be repaid from the proceeds of such public offering and non-included in IPO sale restrictions.

Sources of later stage funding can come from a variety of investors, such as venture capitalists. They examine the financial condition of a company in need of a later stage funding to see if they are a worthy investment. If the business entity appears to be losing, or is on the verge of going down in a precipitous financial abyss, then they might not grant that company a later stage funding. However, if a company is seen to be earning profits or breaking even, and wanted to develop a new product that could revolutionize the lives of hundreds of thousands, if not millions, of consumers, then their chances of getting a later stage funding increases a bit.

For the past couple of years, venture capitalists have been investing in companies that are already in the later stages compared to those that are still in the seed or start-up stages. They tend to satisfy the later stage funding needs of companies that have demonstrated the great value of their products or services and are seeking additional funding for their expansion.

 Uses of Later Stage Funding

To enable expansion of companies seeking to expand their customer base.

To fund the research and development for the creation of a new product.

To hire more employees to establish sales, marketing and engineering functions.

To allow companies to upgrade their facilities and equipment to enhance production capability.

 How to Avail of Later Stage Funding

Successful businesses need to expand to further strengthen their market position. While such expansion projects may not be a problem for large corporations, it is certainly an issue with small and medium-size businesses. At this point, among the solutions that might be considered by these types of companies is to seek a loan with the bank or other commercial lending firms. However, banks nowadays are very stringent with their requirements, while some lending firms have high interest rates. If you have a business and you are currently in the same situation, then seeking the help of venture capitalists to grant your company later stage funding might be the best solution.

Why venture capitalists? This is because for the past several years, venture capitalists have been found to mostly invest in companies that are trying to strengthen their market position by expanding their operations or developing new products. In both cases, it entails a huge amount of capital, which is something that many small and medium-size companies lack. Venture capitalists could fill in the financial gap by putting in your much needed later stage funding.

However, such funding opportunity could only be granted if your company is able to meet the requirements of venture capitalists. One of these is that your business operation mature enough that it already has gained a good grip on the market and the only way to further enhance its market presence is through an expansion. Such expansion may include further development of plant facilities, management, marketing or additional products. Furthermore, you must be able to demonstrate that your company is doing very well and is already turning in a profit.

 Some Tips To Remember When Seeking Out Venture Capitalists For Later Stage Funding

It could help if the company is able to prepare polished business plan about the expansion it plans to undertake or the new product that it is trying to develop. This particular business plan should outline your company’s achievement to date, as well as its plans for the future.

If your company already has a business plan on hand, you can add some details or modify such business plan a bit so that it will suit the present need. Remember to include later stage funding requirements and how to proceed if granted such funds as it could help add credence to a company’s presentation in its quest for a later stage funding.

Intrastate offering allows companies to offer over-the-counter securities within a specific state. Some companies often do this to avoid the registration requirements of the Securities and Exchange Commission, while others issue intrastate offerings because it is cheaper than registering with the SEC. This type of over-the-counter securities allows companies to raise much needed capital, and in doing so, becomes some type of a public company confined within a specific locale.

 What is Exactly Intrastate Offering?

An intrastate offering is a security offering where the issue is only offered and sold to investors within the state where the issuing company is incorporated or established. Under the Securities Act of 1933, intrastate offerings are exempt from SEC registration. While it is not subject to the regulations of the SEC, the issuer is required to follow all the applicable laws of the state where it is registered. Aside from restricting the sale of company shares within the state where they are incorporated, businesses are also required to have at least 80% of their business operations within the boundaries of the state.

At present, intrastate offering is rapidly becoming one of the most popular methods employed by some companies in raising a great deal of money from the general public. This is because many local investors prefer to put their money in a business entity that is in essence, a local public company. Another advantage is that investors only need to prove that they are also from that state, unlike conventional offerings where buyers have to be accredited investors, possess adequate investment knowledge, or know the owners of the business. In the case of the issuer, as long as it follows the rules, it can raise substantial amount of money from nearly anyone who is interested in making an investment in their firm.

Among the rules governing an intrastate offering, the rule involving resale of the offered securities is perhaps the most important. Issuers have to precisely determine the residence of each buyer. Otherwise, it stands to lose the validity of its offerings. According to the rules, if any of the securities are sold or offered to an individual living out of state, the exemption may become invalid. Without the exemption, the issuing company would be in violation of the registration requirements of the Securities Act. Furthermore, if one of the instate buyers of the company’s securities offerings resells the securities to a person residing or based outside the state in a short span of time after the offering is complete, the whole transaction, including the original sales, may be deemed in violation of the Securities Act.

 Advantages of Intrastate Offering

There is no need for such offering to be registered with the Securities and Exchange Commission.

It is a cheaper alternative compared to a conventional securities offering.

Companies are not limited to a certain maximum amount of money when trying to raise needed capital.

There is no set limit on the size of the securities offering or the number of buyers.

The requirements for this type of offering is among the most attractive available for a company issuing the securities.

 Is Your Company Qualified for an Intrastate Offering?

If you are an owner of a company and you wanted to raise capital by issuing shares or securities, you might want to consider an intrastate offering. Before you make plans, however, you should first check out whether you company qualifies for an intrastate offering.

In order to qualify, your company must have been incorporated, and maintain a significant presence, in the state where you intend to make the offering. At the same time, such offering should be made available only to residents, or an entity owned by residents, of that particular state. Also, at least 80% of the issuing company’s revenues must come from its business operations within the state where the offering is to be made. Moreover, at least 80% issuing company’s assets must be located in that state and no less than 80% of the proceeds of the offerings must be used within that state.

As previously mentioned, it will be your responsibility to determine and confirm the residence of each buyer. This is because the Securities Act prohibits the sale of such type of offerings to persons who are not residents of that state.

 Some Things to Consider If Your Company Plans To Issue an Intrastate Offering

An intrastate offering is a great way for local businesses to raise their much needed capital. However, this option has certain restrictions, which, if your company inadvertently violates, may result in the nullification of the shares issued. It is therefore very important that you do not integrate your company’s other forms of financing or consecutive offering with the intrastate offering. Careful planning should be done to avoid this problem.

It is also important to remember that if your company happens to hold some of its assets outside the state where it intends to make the offering, or derives a significant portion of its income outside that state, you might have a hard time qualifying for the exemption. This is why you must ensure that 80% or more of your assets or revenues are located or generated in the state where you will issue the offering. Combined with proper planning, your company’s intrastate offering can become a reliable source of capital that could further propel your business to success.

Intangible asset or property can be sold or bought by a particular company from another entity, be it a person, organization or another business. Although it cannot be seen, touched or held in your hands, it is a type of property that is regarded by companies with great importance. Although an intangible asset may have no set monetary value, they are very important assets that could influence a particular company’s financial future.

 What is an Intangible Asset?

As previously mentioned, an intangible asset is something that is of value, but one which cannot be physically seen or touched. These assets include your company’s or product’s trademark, patent, franchise or brand name. While it is true that you will not be able to touch them physically, or hold them in your hands, its value is recognized and protected by the law.

Intangible assets have two basic types. One of them is called the legal intangible asset. These include trade secrets such as trademarks, copyrights, patents and customer lists. Another type is called the competitive intangible. These assets include basic knowledge or know-how, of activities in a particular company and its reputation.

Unlike legal tangibles which can be defended in courts, since they are after all regarded as a property, competitive intangibles may never be owned, nor, in most cases, defended in court. However, they do have a significant impact on the original company in case they leak out because a competitive intangible is a key source of competitive advantage over other companies in similar industries.

Between these two types of intangibles, the more straightforward and easy to comprehend are the legal assets. They are defined in more precise terms than the competitive intangible. For instance, your company owns the rights to the brand name, XYWear. This brand name is easily recognizable as a specific thing that can be owned, although its monetary valuation can be a bit complex.

Competitive intangibles are sometimes more difficult to define. This is because they are normally gained through experience. Aside from know-how and reputation, they may also include human capital, collaboration and leveraging. Its monetary valuation revolves around guesstimates, making them more complicated.

 Major Categories of Intangible Assets

Customer-related

Marketing-related

Technology-related

Contract-related

Artistic-related

Goodwill

A customer-related intangible asset includes production or order backlogs, customer lists, as well as contractual and non-contractual customer relationships, while some examples of marketing-related intangible asset are trade names or trademarks, Internet domain names, newspaper mastheads, and non-competition agreements.

Technology-related intangibles include trade secrets and patented technology which have been certified by the United States Patent and Trademark Office. Artistic-related intangibles, on the other hand, include musical works and literary works, plays, photographs, pictures, as well as video and audiovisual material.

There are also intangible assets that are contract-related. Examples of these are franchise and licensing agreements, service or supply contracts, broadcast rights and construction permits. Goodwill, as an intangible asset, is only recorded when the business is purchased since goodwill cannot be alienated from the business as a whole.

 How do you Obtain an Intangible Asset?

There are two ways for a company to obtain an intangible asset. The first is to create it from within the company and the second is to purchase it from another entity. With regards to purchasing an intangible asset, while it is true that they lack physical existence or are not financial instruments, there are instances when such assets can be obtained by purchasing the whole company, or buying their marketing-related intangible assets like Internet domain names.

Creating an intangible asset, on the other hand, involve the collective effort of the company’s management or founder to make their mark in their business’ industry. For instance, if you have a company that develop software applications, or manufacture some small everyday devices, and you managed to produce a revolutionary software application or nifty home gadget that could potentially change the lives of hundreds of millions of people, and patented it under your company’s name, then you already have created an intangible asset.

You can also create an intangible asset through corporate social responsibility. Making donations to some worthy cause, or sending financial assistance to disaster-stricken areas, can potentially generate an intangible asset for your company. Such corporate social responsibility can translate into financial rewards for your company.

The value placed on an intangible asset, such as knowledge, people, intellectual property and relationship, now form a bigger proportion of the entire value of most businesses compared to the value of tangible assets like machinery and equipment. In fact, the creation and management of intangible assets is often seen as very essential to the long-term success of a business.

 Some Points to Ponder About Intangible Assets

If you own a company and would like to create internally an intangible asset, you must always bear in mind that such undertaking could potentially entail a huge expense. For instance, if you are trying to create a new product, process, formula, idea, literary work or competition, such endeavor needs an in-depth research and development. This is why if your intention is to create an intangible asset through an innovative product or social action, you have to be financially prepared to undertake such endeavor.

Import export finance programs are among the alternative sources of capital available to exporters. They are designed help small businesses engaged in the importing and exporting in their funding needs. These financing programs are supported by the Small Business Administration and have helped a lot of small businesses for many years obtain the financing they need when they are unable to find any other loan programs with reasonable terms. Import export finance programs guarantee repayment of up to $1 million or 90% of the loan amount, whichever is lesser. This encourages lenders to offer export working capital financing to small businesses that are engaged in export and import activities.

What Exactly is Import Export Finance?

Import export finance is a funding alternative that is guaranteed by the Small Business Administration. The main of objective of import export finance programs is to provide financial assistance to promising small businesses that needed funding to finance their export and import activities.

Most of the times, small businesses that avail of the SBA-guaranteed import export finance programs are those that were unable to obtain required funding through conventional loans. Some of them, while fully qualified to avail of traditional loans, opt to go for SBA-backed import export finance programs because the financing opportunities offered by commercial lenders are simply too disadvantageous for their business.

Some of the SBA-backed import export finance programs provide working capital or fixed asset financing for small businesses that will engage in or expand their exporting activities. These programs are a welcome boost for these businesses, particularly those who have a hard time looking for funds to pay their suppliers, employees, and other necessary financial obligations in the course of their business operations.

What are the Benefits of Import Export Finance?

Provides small business with financing needed to support their export transaction cycle from purchase order to payment.

Provides small businesses with the financing they need to enable them to expand into international markets.

Guarantees lenders up to 90% of the loan made for the purchase or manufacture of goods and services for export.

Available with terms of up to 25 years.

Enables small businesses to expand their international trade portfolio.

Maximize financial flexibility of small businesses in order for them to meet their export needs.

Frees up the company’s other lines of credit for their domestic use.

Export related costs can be financed up to 100% under an SBA-backed import export finance program.

Allows the use of foreign inventory and export inventory receivables as collateral.

How to Apply for a Loan under SBA-Backed Import Export Finance Programs?

Although the standards and requirements for SBA-backed import export loans are more flexible compared to other loan types, most lenders still require comprehensive documentation to assess your loan request. This is why you should make it a point to provide them the best possible presentation when you make your loan submission because it is possible that you might not get another chance.

Talk to your existing lender to find out if they are a participating SBA lender. If they are, they will also be able to offer you loan opportunities under an SBA-backed import export program. Your application for a loan under such program is submitted directly to the lender. They use their own application material in addition to the Borrower Information Form of the SBA.

It will be the lenders that will approve the loan request, and will also be responsible for submitting a limited amount of eligibility information to the National Loan Processing Center of the Small Business Administration. You can gather more information about SBA-backed import export finance programs by talking to the SBA staff. They can help you determine which financing option is the best for your company. Try to visit your local U.S. Export Assistance Center to find out more about import export finance programs and whether your business qualifies.

Some Tips When Applying For a Loan under an SBA-Backed Import Export Finance Program

Import export finance programs are truly beneficial for small businesses engaged in export activities. However, there are certain requirements that these businesses must meet in order for them to avail of loans under these programs. If you are an owner of a small export business, you might want to first check out these requirements to see if your business qualifies.

For starters, you have to make sure that your company has been in business for at least one year at the time of the application. However, there are instances when the Small Business Administration may waive this requirement if you already have an export trade experience.

Your company must also be engaged in business in the United States. The goal of SBA-backed import export finance programs, aside from helping small businesses, is for the loan recipients to generate jobs that can help the economy. This is why SBA-backed loans have more appealing rates and features compared to those offered by commercial lenders. For this reason, it puts its focus mostly on companies that are engaged in business in the United States.

Small business loan refinancing can be a great option to small business owners to free up cash to make much needed purchases as well as meet other payment obligations. Most small businesses refinance due to multiple debts, this way they can all be consolidated into one loan with a preferably lower interest rate. Remember, if you are looking to refinance your small business loan you do not need to remain with the same lender, you are able to shop around to find the best interest rate, terms, and conditions that you can find for your small business loan.

What is a Small Business Loan Refinance?

A small business loan refinance is offered by lenders to restate your small business loan under different terms and conditions. The recent drop in small business loan interest rates can make refinancing very tempting, not only does this free up working cash for the business but it can also lower the monthly payments in return also creating more cash for the business. It is typically a win win with refinancing small business loans. Lenders offer low interest rates so make sure to shop around for the best rate, do not settle for the first offer given.

Some Benefits to a Small Business Loan Refinance

• Lower interest rate
• Lower monthly payments
• Consolidate all debts into one monthly payment
• More working cash for the business

Common Uses of Funds From Refinancing Your Small Business Loan

• Purchase new equipment
• Increase inventory
• Meet payroll obligations
• Meet vender payment obligations
• Remodel or Renovate
• Expand the business

How to Refinance a Small Business Loan

• Find a lender that offers small business loan refinancing.
• Negotiate the terms and conditions if possible.
• Make sure your small business meets the lenders requirements for refinancing.
• Apply for the refinancing.
• Sign the contract and set up a repayment schedule.

Refinancing your small business loan can be a great benefit to your businesses future, just be sure you will not be repaying more than you need to.

Hypothecation is resorted to by individuals who are looking for loans, and who have certain valuable possessions that they could provide the lender to act as collateral for the loan. The collateral may come in the form of different securities. As long as these securities are satisfactory to the lender, they could always be used as collateral for a loan.

What is Hypothecation?

Hypothecation is the process by which an individual pledges securities to the lender, as collateral so that a loan could be granted by the latter. Some of the securities that are used as collaterals are real estate properties. There are also other forms of securities that an individual could use. As long as these securities would be reasonable for the lender, then they could be used as collateral. This process commonly happens in various loans just like that of a mortgage. In this example, the purchased property by the borrower becomes the collateral for the loan.

In fact, hypothecation is a very common process that occurs in day-to-day life. For businesses that would like to secure financing for the purchase of a vehicle, equipment and other similar business assets, hypothecation is also used. For consumers who want to purchase appliances or vehicles, hypothecation is also often resorted to.

Benefits of Hypothecation

Hypothecation carries with it many advantages. You can expect it to benefit you as the borrower, especially if you want to extend and stretch your finances. Some of the advantages of hypothecation are:

• Borrower gets to retain the possession of the property or the asset that he pledges as collateral.
• The owner of record for the pledged asset is still the borrower.
• It can help the process of financing much easier.
• There is a very much competitive rate of interest for the loan.
• The low interest rate could help the borrower save money over time, particularly for the duration of the loan.
• Once the loan is paid, the lien on the property is also lifted.

Terms and conditions of hypothecation

For as long as the lender and the borrower agree on the collateral, as well as on the terms associated with the loan, then a hypothecation could always be availed of.

How to avail of hypothecation?

Hypothecation is usually one of the options that a perspective borrower could go for whenever he or she is seeking financing for the purchase of a specific property. If you would like to make use of this process, you could always ask your lender about it. Although it has already become a common practice, it is still best that you ask your lender about it. Just make sure that the property or asset that you would be pledging is also acceptable for the lender.

Tips and tricks that you could use

Before you seek financing for the purchase of a property, better make sure that the property itself would be acceptable as a collateral to the lender. Also, look for lenders who were known to agree to a hypothecation, that way, the chances that your loan would be approved is much higher.