In the context of a money services business (MSB) application, net worth refers to the total value of a business’s assets minus its liabilities. It is a measure of the financial strength and stability of a business, and it is typically used to evaluate the risk of granting a license to operate an MSB.
To calculate net worth, you would add up the value of all of the business’s assets, including cash, investments, real estate, and any other assets that have a monetary value. Then you would subtract the total value of the business’s liabilities, such as loans, credit card debt, and any other debts that the business owes. The resulting figure is the business’s net worth.
A higher net worth may indicate that a business is more financially stable and less risky to lend to or work with. As a result, regulatory agencies may require that MSBs have a certain minimum net worth in order to obtain a license to operate. This requirement may vary depending on the type of MSB and the specific risks associated with the business.
This page was last updated on January 11, 2023.