Home: Patents:
Inventors Handbook
Other Funding Options
The Small Business Administration (SBA): An independent government
agency that helps small businesses by providing loan guarantees,
participating with bank loans, and also by making a limited number
of direct loans. Businesses are eligible for support when recognized
as a small scale enterprise by the SBA and if they have already
secured reasonable financing from other sources. Please visit www.sba.gov
for more information.
Small Business Investment Companies: Privately owned companies that
are licensed and regulated by the SBA. They provide equity capital,
long-term loan funds and management help to small businesses. Please
visit www.sba.gov for more information
The Rural Economic and Community Development Agency (RECD): Guarantees
term loans to non-farming businesses in rural areas. The guarantees
can cover up to 90 percent of the total loan from a private lending
institution, and there is no set loan limit for one company. Please
visit http://www.rurdev.usda.gov for more information.
Note – This is not a comprehensive list of government agencies
that can offer financing help to your business. There are numerous
plans, schemes and agencies established by the federal, state and
local governments to promote new enterprises in the country. Please
contact your nearest
business promotion office.
III. Manufacturing, Licensing and Assigning
Manufacturing will require an investment in terms of money, effort,
time, energy and human resources. The element of risk is the highest
with this option. Financing can also become very critical. Consider
the following options before finalizing a manufacturing strategy:
i. Outsource or contract the manufacturing to a third party manufacturer
ii. Source the components and split the assembling part between
the business and a contract/outsourcing partner.
iii. Take total responsibility to manufacture and assemble the invention.
By contrast, a license is a grant to another person or company who
takes total responsibility of manufacturing, distribution, marketing
and selling the invention. The advantage is that ownership is preserved
while reducing financial risk. Royalties from the license can include
an up-front payment as well as royalties based on the actual commercial
performance of the invention.
An invention can be licensed only if it holds a patent or at least
a ‘patent pending’ status. Keep in mind the license
is for the patent and not the invention per se. A professional licensing
agent or attorney can assist in constructing a suitable license
and negotiations with licensing partners.
An assignment is the complete grant of ownership rights in a patent
to an interested buyer. The price will depend on the attractiveness
and salability of the invention in the market. The buy out is normally
against a fixed price with no option of any royalties in the future.
Importantly, the previous owner will have no ownership rights in
the invention. As with licensing, an invention can only be assigned
if it is the subject of a patent, or has ‘patent pending’
status.
 <
Previous PageNext
Page>
|
|
Helping
Businesses and Entrepreneurs Nationwide
