Archive for 'Asset backed lending.'

Intangible Asset Backed Lending Ensure Economic – Competitive Advantage Clarity…

October 30th, 2013. Published under Asset backed lending.. No Comments.

Michael D. Moberly    October 30, 2013    ‘A business blog where attention span matters’.

There is no doubt, receptivity among the business lending – financial services sectors’ to (intangible) asset-backed lending proposals is well beyond merely being some an esoteric, on the horizon capability.

What can quicken the pace of realizing this inevitability is for management teams’, particularly those engaged in (intangible) asset intensive – dependent business’s to achieve greater operational familiarity with their intangibles that in turn brings greater business, economic, and competitive advantage clarity to what intangibles’ are and their contributory value as real enhancements to a business’s overall value, its sources of revenue, along with the structural, intellectual, and relationship capital  necessary for sustainable profitability and growth.

But, well articulated and persuasive clarity about intangibles lies with business management teams and the lending sector alike.  With respect to the former, absent a strong voiced economic – competitive advantage enthusiasm for intangibles that converts to a well reasoned demand (for asset backed lending consideration) expectations that lenders will self-initiate is unlikely.

Precisely how intangibles contribute to – compliment existing business practices to render them more effective and efficient often occurs overtime, and for many, absent immediate notice by a management team or their direct oversight.  In other words intangibles frequently evolve and become embedded as intellectual, relationship, and structural capital and seldom with fanfare or immediate notice until it becomes evident that new and/or additional efficiencies have occurred or there’s been a rise in product/service sales, company reputation, brand, value, competitive advantages, etc.

As management teams acquire greater confidence in their operational familiarity, clarity, and enthusiasm for intangibles and ultimately elect to ‘lift the veil’ to learn to learn what prompted or influenced lucrative economic – competitive advantage advances, it’s increasingly likely they will find it emanated from employee’s intellectual and structural capital directed toward improvements in relationship capital among stakeholders and consumers.  This level of operational familiarity can merely be a matter of unraveling the origins of a single asset and identifying, assessing, and tracking its contributory value to specific changes – improvements.

Such exercises, for both intangible asset intensive – dependent business management teams and prospective lenders, trigger recognition that intangibles really do constitute stand-alone assets which deliver value, serve as sources of revenue, and drive competitive advantages with spill-over effects enterprise-wide.

Each blog post is researched and written by me with the genuine intent it serves as a useful and respectful medium to elevate awareness and appreciation for intangible assets throughout the global business community.   Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of  unsubstantiated commentary or information piggy-backed to other sources.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com.

 

Intangible Asset Backed Lending… Confidence!

October 28th, 2013. Published under Asset backed lending.. No Comments.

Michael D. Moberly    October 28, 2013    ‘A business blog where attention span matters’!

What can management teams’ of intangible asset – intellectual property intensive/rich companies do to elevate (win) the confidence of prospective lenders to become more receptive to intangible asset backed lending proposals?  To be sure, the answer is not easy!

For starters, it’s essential that lenders fully understand and distinguish the terms intangible assets and intellectual property (IP).  Frequently, intangibles and IP are perceive as being synonymous, when in fact, IP is one category, type, or subset of intangibles.

Any (intangible) asset backed lending proposal must be framed in a manner that brings financial, business, and risk clarity to the intangible assets proposed as constituting collateral, i.e.,

  • what they are, what they aren’t, and the various forms they take
  • how they’ve been managed, safeguarded, and utilized
  • how to objectively assess their contributory value, unravel their ownership, and identify risk
  • how they’re currently positioned (leveraged, convertible) into competitive advantages and sources of revenue.
  • how the assets contribute to the business’s sustainability and serve as foundations for future (company) growth and value.

Each of these elements must be meaningfully characterized in a manner that resonates with lenders and can approximate conventional business lending scenarios.

Secondly, an (intangible) asset-backed loan proposal must respectfully articulate a forward looking rationale that allows a lender to be more ideologically receptive to modifying conventionally constructed business loan applications grounded in tangible-physical assets as the sole source(s) of collateral.

In the current and irreversible global business environment in which it is an economic fact – business reality that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability lie in – evolve directly from intangible assets, not physical (tangible) assets, this can be responsibly articulated as the objective economic fact that it really is!

Thirdly, to elevate the probability of lender receptivity to business loan proposals predominantly collateralized by intangibles, holders of the assets must be engaged in the stewardship, oversight, and management of those intangibles, i.e., have in place coherent, reasoned, and effective practices, policies, procedures, and strategic (business) plan for identifying, developing, utilizing, and converting their assets into value, sources of revenue, and competitive advantages.

(This paper evolved primarily from Mr. Moberly’s experiences and research.  A 2002 survey conducted by Howrey, Simon, Arnold, & White titled ‘Investor Attitudes on IP Protection’ proved very useful as well.)

Each blog post is researched and written by me with the genuine intent it serves as a useful and respectful medium to elevate awareness and appreciation for intangible assets throughout the global business community.   Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of  unsubstantiated commentary or information piggy-backed to other sources.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com.

Building Confidence in Intangible Asset – IP Backed Lending

August 20th, 2009. Published under Analysis and commentary, Asset backed lending.. No Comments.

Michael D.  Moberly    August 20, 2009

What can management teams’ of intangible asset – intellectual property intensive/rich companies do to elevate (win) the confidence of lenders to become more receptive and responsive to intangible asset – IP backed lending proposals?  To be sure, the answer is not easy! 

For starters, its essential that applicants fully appreciate the fact that while most lenders understand the terms intangible assets and intellectual property, they may perceive them in different contexts variously influenced by their past experiences and industry sector expertise, and their employers’ (lending institutions’) historical interests and practices.

Therefore, any (asset backed lending) proposal must be framed in a manner that brings financial – business clarity to the intangible assets ‘on the table’, i.e., what they are, the various forms they take, how they’ve been managed and utilized, and how they’re currently positioned (leveraged, convertable) into competitive advantages, value, sustainability, and foundations for future (company) growth, and of course, revenue.  Each of these elements are meaningful to – resonate with lenders

Secondly, a proposal should respectfully articulate a rationale that permits the lender (ideologically and practially) to faithfully shift conventional perspectives/practices they may hold to become receptive to considering/examining alternatives, apart from only accepting liens on an applicant’s physical – tangible (assets) property, etc., as collateral. 

In many instances, this can be convincingly articulated by emphasizing the economic fact – business reality that in today’s increasingly knowledge-based economies, 65+% of most company’s value, revenue, sustainability, and foundations for future growth lie in – evolve directly from intangible assets including IP, not physical (tangible) assets.

Thirdly, a proposal must clearly address (counter) concerns shared by many prospective asset backed lenders, which is that management teams of intangible asset – IP intensive companies routinely do not have in place a coherent or sufficiently adequate approach (strategy) for the utilization – maximization of their intangibles and IP to warrant investment, i.e., asset backed lending. 

And lastly, but quite realistically, asset backed lending applicants should ensure, before negotiations commence, that the lending application itself has space to reference (list, describe as collateral) not solely the applicants’ tangible – physical assets but, most importantly their intangible assets and intellectual property. 

(This post evolved primarily from Mr. Moberly’s experiences and research.  A 2002 survey conducted by Howrey, Simon, Arnold, & White titled ‘Investor Attitudes on IP Protection’ proved very useful as well.)