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.

When we talk about the various benefits of the financial services that we gain from a number of services, we talk about funding bank instruments like Bank Guarantee, SBLC or Letter of Credits. These are some of the great ways to invest which help the business owners in many ways.

Financing SBLC – The benefits – what is SBLC?

The SBLC or the Standby Letter of Credit is basically a guarantee that the bank provides that in any case you are unable to pay your lender, the bank will provide in lieu of you. That means the seller will get their money no matter what. SBLC is more like a disaster management which means that you don’t need to use the SBLC unless it is the biggest emergency.

However, as the SBLC providers issue one of these letters to the seller, agreeing to make payments for the goods being sold if the buyer defaults. This way, the seller feels secure in the purchase because the bank is obligated to pay if the buyer fails to. In short, it ensures payment for the product being sold.

Funding your SBLC

Funding SBLC or any other bank instrument is quite popular among the people because of its “no customary credit perquisite” or no upfront installment related to the loan options. The best thing is, they are pretty easy to get once you have a good financial record. However, the SBLC Funding option gives you a lot of benefits and there are a lot of people who do that every year.

Although many prefer funding SBLC, but then again there are a few who don’t understand the necessity of investing in an SBLC. When you are thinking of making a major purchase, SBLC funding is the answer. The main reason you them – because whenever anyone sells something, they want to be sure the buyer can pay them back in full like they promised. The seller may be unwilling to complete the transaction if you can’t prove that you can pay them back. You need something that proves you can pay what’s due, which is when standby letters of credit become necessary. SBLC is that something which makes the seller believe that you will and you can pay the dues. This doesn’t only help you in terms of your domestic transactions, but if you can acquire an SBLC in a major bank, that SBLC can help you internationally as well.

There are plenty of reasons why people use several bank instruments like a bank guarantee, letter of credit or a standby letter of credit, because these instruments have a lot of benefits to provide and they are extremely effective for the growth of your business.

However, when we want to define the literal meaning of the SBLC letter of credit, it means the a guarantee of payment issued by a bank, on behalf of the client that is involved in the transaction, as a payment of last resort of payment, if the client falls to fulfill other contractual obligations.

There are a lot of benefits of using the SBLC, and there are a lot of things that you need to consider before you go ahead buy this bank instrument. However, it is actually the last resort of payment – that means, although it is a guarantee provided by the bank that they will pay on behalf of you if you are unable to pay, the SBLC isn’t actually meant to be used in normal circumstances. But, owning an SBLC can be a great help because that can earn you trust from various clients – be it national or international.

An SBLC can help you when it comes to bankruptcy. When every other way is tried and failed, the buyer can use the SBLC and then only the SBLC provides a relief in terms of when a crisis arises – helping the owner from falling into bankruptcy. That means, it can help you at the time of the biggest crisis. SBLC isn’t really made to use during the time of small crisis. It is ideal for times like bankruptcy or when no other way can help you get out of the mess. The SBLC or the Standby letter of credit is a great lifesaver.

As we have already mentioned, the owner of SBLC does hold a great reputation and that earns him some great trust from the clients. The owner has to have a good track record in terms of money with the bank or otherwise he or she won’t be getting an SBLC on the very first hand. This is the reason why, someone who owns an SBLC gets better deals both in the national and international platforms than someone who doesn’t.

Thus SBLC plays a key role in a transaction which involves multiple parties and a trust is gained.