Finance Guide: Finance for Intangible Assets22nd April 2016
An intangible asset is any asset that does not have a physical form. For a business this typically includes intellectual property, goodwill, patents, trademarks, copyrights, licenses, franchises, and brand recognition. An intangible asset can also be classified as either indefinite or definite based on whether or not the asset will stay with the company as it continues to operate.
When preparing a case to lend against an intangible asset, a funder will need to satisfy themselves that these assets are critical to guaranteeing cash flow. Therefore when preparing a case to secure a loan against intangible assets it is crucial to have a knowledge of the value of these assets and the risks associated with selling them.
Lenders have traditionally not been interested in lending against intangible assets, due to the fact that valuation could be uncertain. This is beginning to change, however, and it is not uncommon today for banks to lend against intangible assets to supplement other types of security based on physical assets.
Making sure you have the right finance for your business is complex and can often be confusing.
There are so many options that can seem very similar, but which when reviewed closely can be very different in terms of monthly payments, overall costs, up-front fees and terms and conditions.
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