Intangible Asset Backed Lending: Starts By Ensuring Economic – Competitive Advantage Clarity…

By Michael D. Moberly

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.

[This post originally appeared on the Business IP and Intangible Asset Blog.]

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