Small business crediting

What small business financing problems you may face?

Every year small business loans are gaining more and more popularity among businessmen – crediting allows both establishing a new company and developing and expending the firm already existing.

They say that the main criterion the bank relies upon deciding on the crediting is the quality of loan security. But this is not true foe all the cases. The conditions for small business crediting are well-found profs that the loan will be paid out given to the bank administration. Regulatory documents of many banks do not allow providing loans which may be repaid only at the expenses of security sale.

So giving a credit to small businesses bank, first of all, is guided by their cash flow which forms both in their current activities and the investment project realization. Before turning to a bank the enterprise should estimate its investment projects and choose the most efficient one. Any bank takes in account calculations made by the staff specialists but makes conclusions on the base of its own models.

Conventionally all the projects are divided in investment crediting and project finance.

Investment Crediting

Investment crediting considers the lender‘s total economic activities - including incomes from the project realization – as the main source of payment. In this case the financial state of the enterprise is investigated in the dynamics of a standard accounting for the last 3 years. The main aim is to be sure that the balance sheet structure is stable, there are no problems with the budget and vendors, the enterprise can generate positive cash flow and is constantly developing. Whether any diseconomies are fixed in the balance the reasons for such a situation are analyzed.

Bank analyzes the enterprise crediting history – how accurately it makes loan payments. Bank considers short- and long-term credits, financial lease, long-term rent, machinery credit purchase and so on.

Project Finance

The process of the application consideration in the case of project finance is similar to that of the investment crediting still with some divergence. Bank focuses on the investigation of the project itself for in the majority of cases they deal with new firms established specially for the certain project realization. Special attention is giving to the finance risk distribution between the participants. The main condition is that the firm provides at least 30% of the sum to be put in the project. And even more accent is given to marketing, chosen developing strategy and main technical solutions. Basic project contracts are examined and sometimes the bank may demand additional guaranties for them.

International Intellectual Property Alliance (IPA) has announced the annual report to USA government in which they disclose the intelligence property protection inadequacy in the whole world.
This report usually becomes the base of the law implying some sort of economic sanctions against the countries which intellectual property protection policy differs from that of the USA.
The report rendered a great interest in the mass media.
As a professor of the internet law reports the most noticeable fact is that while the report criticizes the policy in other countries American lobby has shown that the USA laws providing the protection of the literary property are isolated and stand far from these of the rest world.
The agenda which has caused the most vigorous disputes was the intellectual property protection in the Internet.

Double Standards
American model of WIPO (World Intellectual Property Organization) agreement implementation seems to be the most aggressive one in the world. This model set the most stringent DRM system neutralization frames even if it is used legally. Probably this very fact provokes other countries to find their own models. These researches arouse IPA inevitable disapproval of such countries as Canada, New Zealand, Japan, Switzerland, South Korea, Mexico and India which do follow or intend to follow their own implementation legislative model in the field of intellectual property security soft and hard ware.
The countries which didn’t ratify the WIPO treaty underwent IPA critics as well (and these countries compose the greater part of the world).
Sometimes IPA is dissatisfied even with the model which is similar to the American one. For example Israel is going to legalize so called “fair use” which does not necessarily require any special allowance to use literate property in case of reviews and analyses as a counter to American legislation. IPA is afraid that people will take “fair use” for the allowance to use intellectual property without any restrictions.
The most violent are the critics of obliged licensing. They claim especially the developing countries such as Nigeria, Vietnam, Kuwait, the Lebanon to give up the necessary licensing in the field of television and radio broadcasting and printing business.

A Long List

The fact that the first licenses for cabal plant and satellite system transactions, for sound records production and distribution and for the usage of particular works in non-profitable aims should be taken into consideration.
Canada, Brasilia and South Korea didn’t escape being criticized for such legislative thaws as using intellectual property in educational purposes.