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Category Archives: Finance

How to Pay Back a Loan If You’re Having a Slow Season

According to the US Small Business Association, there are 28.8 million small businesses in the US, and they have 56.8 million employees. Businesses are defined as small if they have fewer than 500 employees. In the US, small businesses account for 99.7% of all businesses.

The NSBA (National Small Business Association) conducted a survey among small businesses and found out that 27% of them weren’t able to receive the funding they needed. According to the SBA, business loans, credit cards, and lines of credit represent nearly ¾ of financing for new firms.

Based on Biz2Credit’s Small Business Lending Index, in March 2016, major banks approved 23% of funding requests, institutional lenders approved 62.8%, small banks approved 48.7%, alternative lenders approved 60.7%, and credit unions approved 42% of loan applications.

If you have a loan, you might be interested in how you could pay it back during slow seasons. Regardless of the size of the loan, this is a serious problem that you should tackle taking the right steps. So, what can you do?

  1. Have Your Own Budget

Consider using budgeting or spreadsheet software to keep under control your upcoming cash flows. You should know how much money is flowing into and out of your business. This will help you minimize your expenses and increase profits.

  1. Cut Your Cash Outflows

Look for ways how you can cut your expenses. Speak to your suppliers to see whether you can extend terms. Also, postpone purchases that aren’t critical, or consider reducing the number of working hours. However, this doesn’t refer to payments to be made to a lender or the IRS. Don’t fail to make these payments.

  1. Try Quick Payments

When your commercial customers have some due payments to make, you can negotiate with them and offer discounts for a quick payment. You can try liquidating unnecessary equipment. Another tactic is wholesale your inventory through an auction. Also, you can try working extra hours to increase revenue.

  1. Consider a Merchant Cash Advance

Turn to a reputable business loan provider for a merchant cash advance. First American Merchant, an award-winning alternative online lender and a high risk payment processor, can be the best option to try. FAM offers exceptional business funding opportunities, including small business cash advance bad credit, to merchants of any type. The rates are among the most competitive in the industry.

  1. Try Resetting Your Loan Terms

If you have difficulty paying back your loan, speak to your lender and see whether you can reset your loan terms. Maybe you can extend the length of the loan, pay smaller amounts more frequently, or change the payment date, taking into account your collections date.

As you see, there are a number of steps you can take to overcome the challenges associated with paying back your loan during slow seasons. Remember that one of the best ways to solve this problem is to identify and establish a relationship with a reputable lender that offers business loans and merchant cash advances with the best possible terms and rates.

Facts about the Commercial Finance Industry

Facts about the commercial finance industry

  • There are more than 28 million small business in the United States of America and amongst these, more than 22 millions are self employed
  • There are millions mid-sized businesses as well
  • Each year, more than 10-12 million businessmen seek capital funding
  • Also, each year about 7-8 million do not get it
  • Loans for small business have fallen

All these prove that there is a huge gap between demand and supply as far as capital is concerned. This gap can only be fulfilled when there are enough lenders in the industry and more importantly, when the borrowers are able to reach to the lenders.

It is not easy to get secure loans these days, though there are many financial institutions out there ready with varied loan options. There are many formalities and many rules and regulations those make it difficult for borrowers to seek loans from these agencies.

Apart from that, the options in terms of the demand are really less and hence, it has been estimated that 90% of the small businesses are in need of your financial services.

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As already mentioned, there is a huge gap and that can only be fulfilled, when more and more financial companies come into the industry.

By opting for this program you can open your own financial company without any risk and earn a whooping 6 figure income in a month. You will also be helping millions out there who are in need of capital.

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Principles to Help you Manage Finances

1. Money Awareness:

Ensuring a stable financial situation starts with understanding your spending habits, your creditworthiness and where you stand with regard to your budget and disposable income. Are you good at saving or are you a big spender? Understanding your financial position will help you to plan realistically for both long and short-term goals.

2. Money Plan:

Your financial health and secure financial future lies in your ability to budget properly. Draw up a budget that includes not only your monthly expenses, but future planning for retirement and education too. If you are a habitual spender, arrange debit orders each month that pay your most important bills before you can spend frivolously on anything else.

3. Money Safety Net:

Saving money is one of the most important things that you can do to ensure financial security. If you have savings, you won’t need to seek credit or a personal loan to cover any financial emergencies that may arise. You need to allocate money in your budget towards savings and investments every month. To help you start saving, ask yourself the following questions:

  • What is my investment goal? Is it for a safety net, retirement or a big event such as a wedding?
  • Do I want certainty that I’ll get my capital back, or can I take a chance to gain higher returns?
  • How long do I want my investment term to be?

Once you know your savings goals, it is time to find the right investment account to fit your needs. If you want quick access to your money in the case of an emergency, you will do well with a Notice Deposit account. Although these types of accounts generally offer lower interest rates, you will be able to make additional deposits into the account at any time, and withdraw funds on a specified notice period.

A Fixed Deposit account is a better option when you are saving towards a long-term goal. With this account, you will deposit money and will then only be able to access it after a fixed term. This is a riskier type of account as you will not be able to access the money sooner than the specified term date, but you will also earn higher interest as a result.

Think carefully about your goals before you find the right investment account.

4. Money as Good Credit:

You should only take out loans when your reason for needing credit will help your financial future – loans for a house, a car or study purposes, for example. Avoid using credit to purchase things that are temporary and will have no positive influence on your future.

Irrespective of the credit that you choose, ensure that you are able to pay the loan off as quickly as possible without falling into financial disrepair.

5. Money Control:

You need to take control of your money, before it controls you. Check your credit profile regularly to ensure that you are in the clear, and never default on payments. If you are in a sticky situation where you are unable to pay any of your accounts, ensure that you speak to your credit provider to make alternate payment arrangements to prevent a negative credit listing.

Tips to Secure Financial Future

Relieve Your Debt

There comes a time where we all fill out a credit card application form – whether we do it for the sake of a good credit score or for financial security, we become liable for whatever amount of money is spent on that credit card. There is also a possibility that we have a personal loan or two behind our names, which also adds to the responsibility of repaying a lump sum at the end of every month. The first step towards securing your financial future, however, is to relieve yourself of your debt. Jot down all that you owe and set deadlines for yourself. Once you’ve paid off all of your debt, you will earn back your financial freedom and will be able to move forward.

Use Your Credit Card Wisely

Wise use of your credit card will also ensure that you limit the amount of debt that you incur. Be sure to use your credit card for emergencies or for large once-off payments on items that you need. If you do happen to use up your credit, be sure to pay it back in full at the end of every month. This will ensure that your credit score remains intact. Avoid any spontaneous purchases and, in an effort to remain in control of your financial situation, be sure to give your credit card a rest every month or so.

Ask for Professional Help

A trusted financial advisor is also a beneficial tool when it comes to securing your financial future. In the case that you feel unsure about your finances, or about how to get rid of any impeding debt, simply contact your bank and enquire about financial assistance. Not only will you be able to consult with someone who can share the secrets of the trade, you will also receive advice on how to manage your money, how to annihilate your debt and how to draw up a strict budget.

Way Choose a Good Financial Advisor

Here are ways that help in making the right choice of a financial advisor.

  1. The first and the most important aspect in a financial advisor is the experience that he or she holds. When an advisor has adequate amount of experience in dealing with money, they are more likely to be able to impart useful knowledge.
  2. It is also essential to make sure that the advisors have a hardcore finance background, which means that the competencies of the advisors should lie very strongly in the field. Good advice in financial matters may be given only by those who know the trade like the back of their palm.
  3. It is also important that the advisors know the nuances, rules and repercussions of various investment options. When a financial advisor is chosen, it should be one who can advice like an expert, for example the Syndicate Finance in Mumbai.
  4. The diversification of financial investments is something that is the most essential investment function, this implies that an advisor should be able to advice on diversifying an investment portfolio for it to be able to grow and be nurtured.
  5. It is also important that the advisor knows about the ways in which money may be put to productive uses instead of spending large chunks of income on taxes and payments.
  6. A financial advisor should be able to make the money work for the investor. This means that the amount of returns that the investor gets is the true identity of the efficiency of an advisor.
  7. Finally, it must be ensured that the advisor has an impeccable quality to speculate returns. This implies that the advisor should be able to gauge lucrative markets and make the investor put in financial resources in worthy places.

When an investment is at stake, the best a person can do is to ensure that the right kind of advice is taken. While an investment advisor can only show the methods, it is up to the investor to understand and make wise investment choices.

Types of Current Accounts for Businesses

One of the compulsory requirements when starting a business is that of opening a Current Bank account. It is the best for carrying out business transactions, and keeping business separate from your personal expenses. It is required for any kind of business – big or small – current account is required to document company transactions and records. They have attractive offers associated with them because of the frequent transactions in these accounts.

It is easy to a current account all you need to provide is some proof of the business and business expenses to get the account.

There are various types of accounts available in India, so it is important to scrutinize each one and selecting the right one for you. Banks have a variety of offers and different type of business accounts to offer. Your bank will have the right solution for all your current account requirements.

These are accounts in which high amount transactions take place on a regular basis. When choosing an account you must consider how much you want to save for, duration and how much money you can afford to save on a monthly basis.

Look for an account which can give the best interest rates. Earning a good interest rate on this account should be a priority.

There are many offers associated with a current business account:

  • Look for acurrent account which can adjust itself with your business cycle. It will give you freedom to control the average balance you maintain in the account. So higher the average balance in the account, higher the free limit you get.
  • Some current accounts require a fixed average balance per month.
  • Various provisions on free cash deposit
  • Free non cash transactions
  • Current accounts have perks like upto 200 free transactions
  • Free cheque book pages, internet banking, phone banking services.
  • Free demand drafts
  • Instant mobile alerts

Current accounts can be opened by anyone over 18 years of age. It is a requisite for

  • Sole proprietorships
  • Businesses
  • Private/ Limited companies
  • Public enterprises
  • Trusts, Societies, Clubs
  • Local authorities or other Government bodies

Like several other accounts, there are certain requirements with a bank a/c to function properly. You require to keep a minimum balance on a current account and it is often higher than on a savings a/c, since the money involved is more. In addition, a minimum deposit amount is required to open the account; this amount depends on the bank and type of the account.

There are several current a/c options available – all that you have to do is assess your business requirement and then negotiate good terms with your banker, and get the perfect account for youto get the best out of your business current account.

Trade Finance Products are provided by Financial Institutions

Letters of credit

A letter of credit is an undertaking by the bank or financial institutions of a promise to pay the seller/exporter on behalf of the buyer/importer – with the condition that the seller submits the documents related to the agreement to the designated bank or financial institution of the buyer. The bank or financial institution specified in the purchase agreement will pay the seller/exporter the agreed payment against consignments.

Bank Guarantee

This is also a promise or undertaking provided by the Bank in favour of the beneficiary and on behalf of the applicant. If the applicant fails to meet the obligations of the agreement either by finance or performance then the guarantor bank will make the payment to the beneficiary on behalf of the applicant on receipt of the claim or demand made by the beneficiary. There are various types of bank guarantees offered by the banks and these include Tender Bond, Performance Bond, Advance Payment, Retention, Labour and financial.

Discounting of bills

This is the most common service relating to trade that is provided by the banks. Here the bank designated by the seller will collect the payment from the buyers designated bank on behalf of the seller, so that the shipment can be sent to the buyer by the seller as per the agreement executed between them.

Trade finance is an important factor in the transaction procedures of almost every trade that most traders complete because of the various benefits offered by the various financing tools. What is trade finance? Trade finance is essentially granted by the banks wherein the bank agrees to guarantee the payment in a trading transaction between a buyer and seller. The guarantee comprises of at least one of the afore-mentioned tools and depending on their requirement and size of business; traders avail themselves of them as they provide security for their consignment and payment. An intermediary such as a bank guaranteeing the payment the seller will send the shipment in time and in full and the buyer will also make the full payment because the consignment has arrived in full.

Types of Financial Calculators available in the Market

These calculators are designed to calculate the ideal rates most suited to you, depending on the input you have. There are plenty of calculators that are available in the financial market, each designed for a different purpose. Some of them include the following:

Calculator to help in planning your retirement:

At some point in time, you will need to retire from your professional life. But planning your finances after you retire will help you get a peace of mind. The retirement calculator will help you plan your finances depending on factors such as your age, current income and savings rate. Additionally, it will take into consideration other influential factors depending on your choice of lifestyle you would want to lead after your retirement.

Loan calculator to help make your EMI’s

When you apply for a loan, you will be required to know much to keep aside for the EMI’s. This is crucial as it will help you plan your principal amount and interest rate before you even start. The loan calculator takes these factors into consideration before calculating the ideal amount for you. Normally, there are plenty of other loan payment calculators that are created depending on the type of loan you would want to apply for.

Mortgage Calculator:

This type of calculator helps you compare mortgage rates. It will help you help you compare fixed rates and adjustable mortgage rates, which will help you determine which rate is the best choice for you. It comprises of several set of relevant questions that will help you plan for the future by determining a recommendation.

Debt Planning Calculator:

If you find yourself in financial debt, no doubt you will need to take necessary steps to prevent it from affect any of your finances. Just like the loan calculator the debt calculator, will calculate how much of a debt you can pay off with adjusted interest rates and repayment tenure. This will help you take the necessary steps or financial maintenance to ensure that you get out of your debt.

Net Worth Calculator:

Everyone should know their financial status. This will help you make investments in high risk ventures like stocks or any other equity. Alternatively, it will help you explore other safe options to invest you wealth so that you get high returns. Through this calculator, you can calculate the value of your current assets and the reconciliation of your debts.

Loan Calculators the Best Financial Tools for Financial Needs

Without the right financial planning, it is easy to end up with disorganized finances. No doubt, life would be simple if you do not have to worry about loans and debts. However, such is the reality, where you will need to deal with finances as a part of your life in this modern society.

Part of preparing your finances is by using all financial tools available to help organize your finances. If you ever need to apply for a loan, you need to understand all the variants, features and how it can affect your current finances. Part of being prepared is having a concrete understanding of how a loan works.Tools such as the loan calculator is one way to do so. Here is why this tool will help you with your financial needs in terms of a loan:

Loan comparison:

With so many loans offered in the financial market, how are you aware which choice is the best for you? Each of these loans are designed for different purposes. Additionally, they are also equipped with certain features and rates, which affect your repayment. Therefore, it is important to choose the right loan, for the right financial situation. A loan calculator will help you decide which loan type is the best for you and your financial needs.

Plan your finances for repayment:

When you opt for any borrowing, you will be required to repay the borrowed funds in addition to the added interest amongst other charges. Without the proper planning, you may take a loan amount which you cannot afford, thus leaving you in a situation wherein you will pay more than you should. This will leave you in a more dire financial position than before. However, a loan calculator will ensure that you understand the loan features and get the rates that suit your needs perfectly. It will also help you understand how much funds you need to keep aside when it comes to repaying the loan.

Plan your finances during the repayment:

While you can use the loan calculator to play your finances before you apply, you can also use to plan your finances during the repayment process. This is beneficial especially if you opted for a floating interest rate or if you get an unexpected raise in your income. In this case, use the calculator to recalculate the interest rate that is most feasible to you with the added income. Alternatively, if you have any prepayment features for the amount you have applied for, you can use the calculator for the amount to calculate the ideal rates and repayment tenure to suit your need. In this way, you can adjust the features of a loan, during the process of repaying it.

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.