Debt instruments like notes payable are really beneficial and companies or business organizations that need some operating capital may use or obtain a loan through any of the options of notes payable.

What is a note payable?

Well, it is basically a written promise where you promise to pay a certain amount of money on a specific future date, whether short term or long term. However, there are two types of notes payable option available for you—short term and long term. Short term notes are due within a year and long term notes (LTN) are due after one year.

There are a lot of advantages of the long term one and here are those –

1.    The ownership interest – This note payable method offers you the benefit of ownership interest. That means you don’t have to give away any ownership interest to the lender. The lender only has an expectation to receive the loan plus interest due but receives no equity ownership in the organization. You, as a borrower don’t have to worry about providing any other ownership to the lender.

2.    The interest rate – This payable method has a fixed interest rate. So you can plan and budget your payment according to the interest beforehand. And above all, the due date you get is a long term and there are no possibilities of being tied up into any current assets. That means the risk of loan default gets reduced and the debt capacity increases. What you benefit from it? Firm’s overall financial stability.

3.    Tax Deduction – When you take a loan in interest, it can be paid or can be deducted from your company’s income taxes. This is the reason when you use the long term option, you get benefited and people find the long term payment option to be quite attractive.

4.    Less Paperwork – Long term payable option doesn’t require much paperwork. Raising long-term debt capital does not require any paperwork to be filed with state and federal authorities. It also doesn’t require any kind of pre-approval from the authorities and the investors.

These are a few benefits of the long term debt capital and firms and companies are being benefited by the note payable since a long time. Whether it’s long term or the short term note payable, the instrument can help you grow in your business. We, “The Hanson Group of Companies” provide you a group of some of the best financial options for you.

What is a Bank Guarantee (BG)?

Simply defining, it is a guarantee given by the bank or any other financial institution where it states that, if the person or organization who is taking the money fails to repay the debt, then the bank will cover for the debtor.

Purpose

The question what is a Bank Guarantee (BG) is very legitimate. A BG gives the safe platform for the transaction to happen. For example, if any company needs a major amount of hardware with a specific end goal to support the economy, at that point the dealer (who is offering the gear), may ask for the guarantee from the bank before offering any gear as this transaction will be that of high amount.

Types: There are two types of guarantee. One is direct and another one is indirect.

Direct: As the name recommends, it applies to those types of guarantees given by the banks which directly includes the beneficiary. This write is regularly suitable for cross-fringe trades were a legal framework and different liabilities makes it troublesome for the transactions to happen. It gives a safe situation.

Indirect: Indirect compose becomes possibly the most important factor when the framework doesn't accept foreign banks. In this case, an indirect kind of guarantee takes place where a mediator bank, which is a foreign bank whose office is located in the same nation as the beneficiary, is taken up as the guarantor.

How it helps a business? Now and then small business owners keeping in mind the end goal to expand may need to take steps which could include bunches of risks. Then again, to help the economy, these means may be required to increasingly or lesser degree. Consequently in these cases, by filling in as the guarantor, the bank could ease the procedure of transition and along these lines, can have a direct effect on a nation's future.

How might one apply for it?

Acquiring this sort of guarantee requires various advances and banks do check upon various factors previously issuing a guarantee. These looked up components may incorporate and not constrained to trading history, record as a consumer, liquidity and so on.

In basic words, the individual or the organization needs to demonstrate its value before applying for the guarantee. It ought to also be said that bank requires knowing to what extent does the guarantee is required for, what amount is required, for to what extent the amount is required, beneficiary details along with any other information that bank may state as important.

Simply after giving this information, the bank may choose to give a guarantee. For examples: Tender guarantee, advance payment guarantee, performance guarantee are some kind of guarantees.

So before you go ahead with the process, know the answer to what is a bank guarantee (BG)?

Standby letters of Credit provide protection to buyers and sellers conducting business. It is a term widely used to secure payments in national and international trade. Investing in standby letters of credit (SBLC) is a very unique way for people to invest their money.  Letters of credit can also be used as tools which intend to help you to improve your credit score by removing the negative items from your credit reports

SBLC are designed according to what the International Stand-By Rules And Practices or ISP98 establish

Let us now mention some of the characteristics of SBLC:

It is inexpensive

Risk-free.

It is flexible