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Monthly Archives: January 2017

Asset Finance Works

Asset finance is one of the useful funding arms extended to individuals and businesses when they are in need of funds for renewing or promoting business. What is asset finance and how does it work? Balance sheet assets such as inventory accounts receivable and short-term investments are used to get loans or borrow a sum of money, and security is provided by the borrower on the assets to the lender. The loan acts in conjunction with the laws of traditional loans and institutions, and the company or the borrower simply pledges some assets in exchange for money.

Any kind of loan secured by pledging assets is known as asset-based lending, and the conditions usually imply that the asset is to be retained by the lender if the borrower fails to return the loan within the agreed period and terms. You could say that a mortgage is also a kind of asset-based loan. However, the term asset based lending is only applied to big and small businesses and individuals who take a loan by pledging assets to a bank or financial institution.

Individuals can also avail themselves of this type of funding to raise short-term finance, and the small business sector tends to benefit the most from this kind of funding. Sometimes luxury cars, wine collections, or vintage articles are pledged in order for the individual to get access to asset based funding. Most of these loans go through without much scanning such as credit checks and usually the loans are disbursed by the asset finance company within a day or two. Asset based truck finance is a great funding model highly beneficial for a fleet, or individual owner as it would help to bring in good returns and a borrower has no chance of defaulting on the loan because truck businesses have great track records as money making instruments.

When all doors are closed for the borrower, asset financing companies stand as the savior as they don’t ask many questions and don’t scan your past records. You are likely to receive the loan within a very short period of time – sometimes just 24 hours, and you can carry on with your business without anything blocking your road to progress. The asset finance companies are non-conventional hence they don’t need to ask permission from other people to grant asset based funding to entrepreneurs. If you belong to the SME sector and need finance you will not find a better avenue than asset finance because it is easy to obtain, hassle free and you agree to repay the loan on your own terms and revenue cycle.

The Advantage of Credit Preservation Loan

Managing finances in the present times is challenging for all and sundry. There are many people who strive to ensure that there arises no fiscal hassle in their financial life. However, at some or the other stage in life, the situation arises that many of you find yourself trapped in debts. Paying huge amount of money for clearing debt can make things complicated in your otherwise smooth life. This is primarily due to the fact that credit card debts are extremely high in comparison to other forms of available loans. If this is the situation with you then applying for credit preservation loan makes for the right decision. In addition to fast payment, there are several other advantages which tag along with this loan.

When you apply for this loan, you are able to get access to funds which help you in paying credit card debts almost immediately. There might be very possibility for you to think of the reason why it is called preservation loan. The answer is simple – it not only allows you get rid of debts but also makes it possible for you to preserve your credit card ratings by making timely payment to the money lenders. And, it is because of this reason many people find this loan the right answer to financial dilemma.

Just like other available loans, it also has a principle amount as well as rate of interest. However, it is important for you to know that amount sanctioned in case of preservation loan is comparatively high and can cover several other small loans which are available in the market. This helps borrower in saving a lot of hard-earned money on paying different kinds of loans. In addition, no longer a person has to worry about nagging money lenders and creditors when you have received loan in the form of this loan.

Those of you who are thinking to apply for this loan can enjoy several advantages as these loans can be procured without having to put in many efforts. Application process for these loans is also easy and fast. All that it will take is a few minutes for you to fill an application form available on the website of the money lender’s website. You will come across several lenders offering this loan which is an advantage as you can compare and choose the best of the available loan. Fill online form with correct and genuine details so that you can get approval easily after verification.

With technological advancement and availability of online application form, it has become a lot simpler and easier for money seekers to apply for loan. From anywhere you can apply for credit preservation loan and gain much needed financial respite without any delay. You will get the amount sanctioned as per your existing salary and ease of making repayment. There is very possibility you might fetch low rate of interest too provided you compare loan deals before making the decision. Money sanctioned will be wired into your bank account within a day or two working days.

The Depository Participant for a Demat Account

Investing in the stock market will provide you with high returns. With the right market conditions and the right investment strategy, you can easily get high returns with a small investment.

However, when investing in this financial endeavour, there are certain things you must be first aware of. The first thing you must be aware of is the demat account and how it functions. A demat account can be held by any individual, with the assistance of the depository participant.

So how does this depository participant function and why is it important to the functioning of the demat account? Given below are the required details about it.

Who is the depository participant ?

A depository participant is a financial entity that holds the account holder’s stocks and records. It also receives all the trades for purchasing or selling of any stock. The depository participant, also known as the DP opens your account with an allocated account number and DP ID number. Whenever an account holder purchases or sells a stock, this ID number must be mentioned. One of the main advantage of the DP is that the investor can hold his whole portfolio of mutual fund units, shares and other securities in a single demat account. In India, there are depositories namely the National Securities Depository Limited (NSDL) or the Central Depository Services Limited (CDSL).

What are the functions that the depository participant performs ?

The DP functions as a financial entity that facilitates the dematerialization of shares that are held in a demat account. In other words, the DP ensures the safe keeping of an account’s portfolio in securities. With the instructions given by the account holder, the depository participant can facilitate the transfer of securities from one account another. Therefore, the transfer of ownership of securities is affected by the depository participant. The DP also acts as an important intermediary. Any decision pertaining to transactions such as bonus shares of annual dividend are executed via the depository participant.

What are the services provided through the depositories ?

The depositories offer the major service of dematerialization of shares. Through dematerialization, there is an elimination of certain risk, such as false securities, bad delivery and other similar ventures. It can also share transfer from one DP account to another, on an immediate basis, without any requirement of stamp duty. It also facilitates nomination facility, making it extremely easy. If there is any change in the address of the correspondence that is registered with the DP is automatically gets registered all other companies where the account holder holds any shares. The depositories also facilitate the holding of different securities such as debt, equity or other government securities in a demat account.

Cloud Computing in Financial Sector

Cloud computing is slowly making an impact on the financial sector. Financial stakeholders understand the financial advantages associated with cloud computing. They are wary of the risk related to inefficient management of data assets.

Cloud Computing Can Be Categorized into 4 Models

Public Cloud

Public cloud services can be accessed by the client from a third party provider through the internet. However, the client’s data cannot be visible to the public. An access control mechanism is given to the clients. They are flexible and cost effective.

Private Cloud

A private cloud delivers several advantages of a public cloud – flexibility and excellent service. It also ensures data and processes are handled effectively in the financial institution. It enhances security.

Community Cloud

It is used by a cluster of institutions with common objectives. All the members share the data and application.

Hybrid Cloud

It is an interface between a public and private cloud. Information which is not business critical is sent to the public cloud, while sensitive business information is retained in the private cloud.

Some of The Challenges Are:

Handle The Risk – Governance and Compliance

Facilitating compliance with the organization’s policies and anticipating risk would ensure the long term organizational objectives are achieved.

Deliver Efficient Tools

Delivering efficient tools that improve the efficiency of cloud computing and reduce cost is vital for the long term success.

Enhance The Transparency Level

Enhancing the transparency level would establish the trust which is vital for business transactions.

Increase The Existing Security

Financial institutions must seek strict safety standards from the vendors and make sure the latest applications are in sync with tougher security standards.

Reliability

Ensuring the applications are ready to manage any disaster or unexpected event would boost the overall confidence in the system.

Cloud Management

Accomplishing visibility and assessing results are difficult, if it appears mega financial institutions would receive cloud services from many service providers. If they intend to utilize them internally and externally, it would mean the institution must manage various security systems.

Interoperability

Financial institutions must make sure data and applications can be transferred across various cloud surroundings from many providers. It would be advisable to establish a distinct network and a management structure that can function across multiple platforms, both privately and publicly.

Regulation

The procedures that govern the cloud differ globally, from one nation to another. Several nations data safeguarding laws enforce restraints on data storage, restricting take-up. Hence, the regulation of the cloud is critical.

Benefits

Cost Cutting

Cloud computing would enable the financial services firms to reduce investment in specialized hardware, software and human resources. It would be simpler for them to upgrade the existing IT infrastructure. The pay-on-demand model of cloud would ensure, only the services being used would be billed. Overall, there is a significant cost reduction.

Enhance Scalability

It provides the firm, the capability to expeditiously reply to transforming market, customer and technological requirements. It could be scaled upwards/downwards according to the business requirements. This would provide a key competitive advantage.

Improve Effectiveness

The organizations within the financial sector would benefit from improved efficiency ratios and operating leverage. The normalization intrinsic in the cloud would simplify the process of unifying advanced technologies and applications in the coming years. Since, technology and processes can be meticulously linked, the cloud provides the financial institution a chance to eliminate intricacy.

Exceptional Client Servicing

It ensures modified and bundled products and services are not difficult to establish, as a stand-alone or sharing method. It removes the supply chain interruptions for the IT infrastructure and services.

The financial institutions would be able to bolster computing capability to be in line with demand pinnacles. They can deliver the advanced treasury solutions without being concerned about the quality of the technology. Corporate clients can access any banking system utilizing any browser from any location at any time.

Financial Institutions Are Seeking the Following Prospects from A Cloud System:

  • Robust technology structure to be in sync with the transforming requirements of the business.
  • Highly efficient and cost effective infrastructure that is scalable.
  • Completely automated service delivery to accomplish dexterity.
  • The delivery of shared services throughout reliable domains, ensuring data security.
  • The availability of internet centred model utilizing high capability bandwidth and universal connectedness.
  • An acquisition model that ensures the institution and the customer can leverage relevant services.
  • A reduction in start-up costs and improved competencies that relocate capital expenditures, thereby ensuring the financial institutions can emphasize on business results.
  • The capability to provide customized products and services throughout the business operations.
  • The use of business model that ensures the financial institution’s expenditure is linked to consumption.
  • The establishment of economies of scale would enable the financial institution to outsource various IT competencies.

The business model of financial institutions has changed drastically in the recent past. The interface between business operations and technology has expanded. Financial institutions have the capability to establish a server based application delivery model.