Trademarks finance ideal for SMEs

A TRADEMARKS finance company has two options to consider: hire purchase agreement or credit agreement. Hire purchase requires a minimum of two or more instalments. Credit requires a once off payment.

A TRADEMARKS finance company has two options to consider: hire purchase agreement or credit agreement. Hire purchase requires a minimum of two or more instalments. Credit requires a once off payment.

Hire purchase is used for movable goods yet trademarks are intellectual property. A hybrid agreement shall be created incorporating a mix of hire purchase and credit into the contract. The trademarks credit agreement is where the client registers a trademark, and the price is paid in instalments to the trademarks finance company. This agreement states the price and interest charge for the instalments.

If the client fails to comply with the requirements, a clause may be included specifying what may be claimed in the event of a breach. The trademark certificate itself may be claimed and transfer of ownership will be passed to the finance company.

This model helps many brands to register trademarks. The demand for collateral is low. The only collateral is the trademark, for clients that default on payments. When the client loses the trademark to the finance company, they are given first preference to buy back the trademark before it is auctioned. In the wise words of J.P. Morgan: “When you expect things to happen – strangely enough – they do happen”. Time and chance happen to all. In this season, we call upon the Reserve Bank of Zimbabwe to give a Credit Only Microfinance Licence.

Licencing the trademarks finance business will create employment and further opportunities for women and youths.

As young people, we are economic freedom fighters and the major contributor to the labour force. Many young businesses after graduating, venture into small businesses that have potential to scale. Trademarks protect these emerging businesses.

It is clear, trademarks are all inclusive. Equal benefits may be enjoyed by large corporate as well as small and medium enterprises. A more surprising benefit of trademarks is consistency of business. Companies evade taxes by changing names regularly, but trademarks ensure consistency. When businesses own their trademark, we are guaranteed that the source of products and services is consistent. Trademarks are a building block to customer loyalty through maintaining customer satisfaction. This fulfils expectations and creates a sense of belonging.

The first step to take in registering a trademark for a business is to start by registering the company with the registrar of companies. Next step is to register the trade name this business will be trading as.

Once you are registered, you are then able to file for your registration as a trademark.

However, you can directly register without going through the initial steps recommended above. Many startups do not have funding as they are bootstrapping their operations. To help with fees, a trademarks finance company comes in to pay for the registration process on behalf of the client. Once the terms of the agreement are met, the client will pay instalments or a once off payment to the finance company.

Trademarks finance allows for more trademarks to be registered and it saves as advocacy for intellectual property. Innovation and creative hubs choose businesses that are bankable. Once a business has a trademark, it creates a platform for financial inclusion. A trademarks finance company funds businesses based on their trademarks. You can use trademarks as collateral for debt financing and increase your capacity to expand your operations. A business is able to choose the option of equity financing based on the trademarks.

An innovation and creative hub must not penalise ideas but treat each new entry as a draft. This gives room to make updates and to have a second opinion once necessary adjustments have been made. Iteration is a technique of continuous development of ideas.

Trademarks are applied to 45 classifications and each class is treated as a separate trademark. These trademarks are applied on the branding such as the packaging of products and services. Zimbabwe is known as an agriculture and mining-based economy. We urge farmers to register trademarks to be able to package their produce.

The farming community stands to benefit more from Trademarks finance as they can register first and pay for registration later. Planting and harvest season takes several months, and this reduces the financial burden on the farmer.

Trademarks finance is a short term and low risk activity in terms of registration. Farmers are also able to take credit using their trademarks as collateral to access funds.

Trademarks finance helps SMEs to merchandise their brand names through manufacturing of different products, such as clothing, head gear and shoes among other items. This approach is an extra stream of income for a business that has a focus on another area. Branded products are a customer favourite in Zimbabwe and the world at large. A restaurant for example is able to diversify into a clothing line through trademarks as long as it has also registered in the appropriate class. Trademark classifications set boundaries of protection.

There is potential to franchise and enjoy royalties for the use of your trademark and business model. Printers and manufacturers may focus on production and leave the marketing to the trademark owners.

Again, as a manufacturer with a trademark, you are able to use it as collateral to get credit for your equipment. Several businesses fail because of required assets to generate profits.

The aid of trademarks finance guarantees the business is well equipped to engage in daily operations. Every trademark needs to be valued to ascertain the creditworthiness of the client.

In conclusion, there must be an annual exhibition of trademarks to recognise brands In Zimbabwe. Extra brand awards are essential to reward the reputation of current and potential trademark holders.

  • Chikwenhere is an author of Affirmative 21 Laws How to Confess. He is a brand strategist, image consultant and founder of Zimbabwe Brand Association.

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