Loading...
Menu

Business Loans (Volume 6)

BUSINESS LOANS (VOLUME 6)

 

 

By

Word Chapter

 

 

 

Shakespir EDITION

 

 

***~~~***

PUBLISHED BY:

Word Chapter on Shakespir

 

 

Business Loans (Volume 6)

Copyright © 2016 by Word Chapter

 

 

 

COPYRIGHT NOTICE

 

All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, without the prior written permission of the publisher.

 

DISCLAIMER

 

All the material contained in this book is provided for educational and informational purposes only. No responsibility can be taken for any results or outcomes resulting from the use of this material.

 

While every attempt has been made to provide information that is both accurate and effective, the author does not assume any responsibility for the accuracy or use/misuse of this information.

***~~~***

Alternative Funding Options Every Entrepreneur Should Know

Read more Business Loans articles: http://j.mp/29NuPE5

The sky is becoming wider for small businesses seeking funding because dozens of funding initiatives are opening up as well as new funding websites. Whether your business is a startup, a nonprofit based, high tech, running business in need of expansion, there is a funding option out there for you.

There are three popular websites dedicated to grant

If you are looking for a grant to start a business or breathe life into your already existing business, there are good websites that offer opportunities for grant.

1. Indiegogo

It is a free website that offers fundraising option to its subscribers. The subscriber will have to create a video showcasing their unique business ideas, goods or services. People can view your idea and contribute to your course. You get to keep any money you raise after the site has taken their commission.

2. RocketHub

The fund you raise here will belong to you even if it is not up to your goal. Joining the site is free just like Indiegogo. You need to give the details about your business for their consideration about the eligibility and prospects of your small business.

3. Peerbackers

The service they render has much in common with RocketHub and Indiegogo. However, you can only keep the funds you raise if you promise to fulfill your target to your backers.

Non-profit organizations have their own fundraising options

Non-profit organizations require more money than business because all their projects need to be backed by money. Getting corporate bodies and companies to partner with them is not always an easy task. Here are a number of funding options they can try.

1. Razoo

This fundraising platform was designed exclusively for nonprofit organizations. Established charity organizations and individuals that are on a charity quest are free to join. The site commission is low for organizations and higher for individuals.

2. CrowdRise

They offer tax-deductible donations just like Razoo. Besides the basic membership, there are tiered membership options too. CrowdRise is endorsed by more celebrities which also gives it more media attention.

Those seeking to expand their business can try Kickstarter

Business expansion is one project that is financially involving. Business expansion will mostly lead to increased output and revenue. Businesses that fail to meet up with the financial needs for expansion will suffer stagnation in their business. Expansion seekers can try the following;

1. Kickstarter

This is the most popular crowdfunding site. Your project will be prescreened by Kickstarter before it will be featured on the website. The deal here is that you must offer a product in exchange for the donation you will receive and unless you reach your fundraising goal, you cannot keep the money.

Loan seekers can try any of the following

Financial institutions are very skeptical when it comes to giving out loan to small businesses and startups because they are considered as high risk businesses. Those seeking for loans can try any of the following;

1. Prosper Rating

The loan offered by the site is structured and unsecured. They are one of the leading alternative source of lending, offering from $2,000 to $35,000 with a fixed interest rate and a loan term of between 3 to 5 years depending on your Prosper Rating.

2. Kabbage

This site does not have a crowdfunding dimension as Kabbage itself is the lender making the process faster. They offer short-term cash advances of between $500 and $50,000 to small businesses.

3. Kiva

Kiva partners with microfinance institutions in many third world nations to create loan facility to budding businesses and entrepreneurs. Interested persons can search through the list of Kiva field partners in their locality.

Article highlights

*

There are different fundraising websites dedicated to different types of business and organizations.

*
p<>{color:#000;}. Kickstarter is the most popular crowdfunding website.

*
p<>{color:#000;}. CrowdRise has received wide endorsement from celebrities and has high media attention.

*
p<>{color:#000;}. Crowdfunding websites will take a certain commission from your earning.

*
p<>{color:#000;}. Banks do not easily lend to small businesses and startups.

*
p<>{color:#000;}. Majority of all the crowdfunding websites are free to join.

*
p<>{color:#000;}. Fundraising options available for small businesses are on the rise.

*
p<>{color:#000;}. Kiva has microfinance partners in third world countries.

*
p<>{color:#000;}. Kickstarter will screen your project before featuring it on their website.

*
p<>{color:#000;}. Razoo is designed solely for nonprofit organizations to raise funds.

Read more Business Loans articles: http://j.mp/29NuPE5

  • * * * *

 

How Best Can You Finance Your Business?

Read more Business Loans articles: http://j.mp/29NuPE5

You might have a billion dollar business idea that will make you nearly as much rich annually as you imagine but what happens if you do not have a billion dollar to get it to reality? For a business to thrive you might need a website, a technical team, a work space. All these cost money and it is not always easy to find sources of funding that might meet the increasing demand of money as your business grows. Therefore, you should be keen from the very beginning to handling the monetary issues and be solid in start- up funding.

Entrepreneurs need a small amount of funding

Irrespective of what your new business venture – an ice cream shop, a clothing line, building a new app – a certain amount of money will always be required to get the idea off the ground. The first place entrepreneurs who are optimistic about their business will look for funds is their pocket but what happens if the pocket is empty?

There are three main types of start-up funding

Three types of funding are currently available for start-ups. Each of the type of financing has its own benefits and drawbacks. However, every business is unique in their requirements. Carefully analyzing the three different types of funding options available will help you to know which one suits the best for your business. The three types of financing are listed below.

1. Bootstrapping your business

Bootstrapping of your business simply means collecting funds from unconventional sources. As an entrepreneur, you do not necessarily need to drain your pocket to finance your business. Creativity comes to play in bootstrapping because the idea is to use existing resources to earn revenue. Some of the ways to bootstrap are as follows:

*

Renting anything of value: Renting your home can be a potential goldmine. You can also rent out machines – if you have any – to those who need it. A cleaning start-up founder, Adam Falla once narrated how he would rent out his home for a few nights a month.

*
p<>{color:#000;}. Crowdfunding: Crowd funding is relatively new. Here, you put up your idea online using crowd funding platforms. People will view your idea and if they are impressed, they can pledge to support it.

Bootstrapping has its pros and cons

The good thing about bootstrapping is that your business will not be bogged down with monthly payments. On the other hand, depending on the scale of your business, bootstrapping may not bring in sufficient cash needed to start off.

2. Borrowing from willing lenders

Many new entrepreneurs consider this option first whenever they are aiming to raise some amount of funds to bring their business to life. Borrowing may not come with legally written terms but certain issues will need to be ironed out.

*
p<>{color:#000;}. Family and friends[*:*] They can provide the financial backbone needed for your business with little or no request for interest but taking this bold step can be intimidating.

Borrowing has its good and bad side

Borrowing can guarantee you the exact amount of money you need for your business but the problem here is that it comes with a cost – putting a strain on the relationship with the other party.

3. Loans and investors

Loans and angel investors can be your next line of action if you do not want to get your family and friends involved. Getting a loan is usually very difficult for start-ups. Loans can be obtained from any of the following;

*

Commercial banks: these are the highest financial lenders. The beauty of bank loan is that you can be sure to get the exact amount you need no matter how big.

Bank loan has its pros and cons

The procedure to getting a bank loan can be exhausting but bank loan can come in handy when you are seeking for a large amount of money.

Article highlights

*

Start-ups usually require a large sum of money to take off.

*
p<>{color:#000;}. Angel investors are professionals with high net worth aiming to invest in start-ups.

*
p<>{color:#000;}. Obtaining a bank loan is time consuming and can b e frustrating too.

*
p<>{color:#000;}. There are three major ways start-ups can source for funds.

*
p<>{color:#000;}. Borrowing from family and friend can put a strain on your relationship with them.

*
p<>{color:#000;}. Bootstrapping is mopping up revenue from any available source.

*
p<>{color:#000;}. Bootstrapping save your business of monthly debt payments.

*
p<>{color:#000;}. Renting out your home is one way to bootstrap.

*
p<>{color:#000;}. There are other accessories that will be required for a business to thrive.

*
p<>{color:#000;}. All the forms of financing have their pros and cons.

Read more Business Loans articles: http://j.mp/29NuPE5

  • * * * *

 

Several Reasons That can Make Your Crowdfunding Campaign Fail

Read more Business Loans articles: http://j.mp/29NuPE5

Starting up a crowdfunding campaign is very easy. All you need is to put up a video and backers will begin to throw in their money. It has a reputation as an easy way to finance a startup business. As easy as it may sound, pulling off a successful crowdfunding campaign is far from easy. For every success story of a viral video, there are millions more that never got to see the light of day. Why crowdfunding campaign may fail or succeed is highlighted below as narrated by entrepreneurs who have taken a shot at it.

1. Wrong timing

If you happen to launch your campaign at a time when a lot of others are doing so, there will be a stiff competition for audience which will greatly lower your chances at placing tops on the platform (e.g. kickstarter). Have an idea of the time zone of your target for a chance to get the highest possible traffic. The best time to launch a campaign is in the morning.

2. Wrong audience

Failure to target the right crowd is like shooting yourself on the foot. You have to make your campaign appeal to the crowd. NYC Vanity’s Brandon Kelly once ran a crowdfunding campaign for their product called The Palit. In the end, they found out their backers were only those that they know.

3. Unclear video

Crowdfunding platforms have a section for campaigners to post a video that explains their product or project so that backers will have a sense of what they are contributing to. An entrepreneur once hinted on how their campaign video was viewed by over 20,000 people but only about twenty-nine percent finished watching because they could not grasp what the video was talking about.

4. Complicated content

People often make the mistake of thinking that keeping their videos complex will impress their audience. Complicated videos often happen when the campaigner is feeling very enthusiastic about his or her business. Keep your video simple without trying to explain every technology. Focus more on the features that will solve customers’ problem.

There are no guarantees with crowdfunding

The success rate reported by entrepreneurs using kickstarter crowdfunding is currently placed around forty-four percent. As a startup business, the percentage may be high enough to worth a shot. However, startup businesses should realize that there are a lot more funding sources out there. They should weigh the other alternatives when their crowdfunding campaign fails rather than wail.

It is not a crime to make a mistake in business

Making a mistake is not a crime in business if you sit back and take stock of what went wrong. Every successful entrepreneur must have made a mistake in their business at one point or another. What they usually did after the mistake is to go back to the drawing board and re-strategize till they meet success. More emphasis should be laid on taking stock of mistakes because that is what makes you wiser.

There are several ways to turn the dice around

As an entrepreneur, what will you do if your crowdfunding campaign fails? Fold your arms? Definitely not. The best option will be to try again. The various ways you can make the odds go in your favor includes:

*

Getting the timing for the launch of the campaign right

*
p<>{color:#000;}. Having a defined audience and aiming at them

*
p<>{color:#000;}. Creating a video that is concise but makes an impact

*
p<>{color:#000;}. Have a trusted advisor test the content of your video

*
p<>{color:#000;}. Connecting with your backers

Article highlights

*

Crowdfunding campaign can be started easily using crowdfunding platforms.

*
p<>{color:#000;}. The best time to begin a crowdfunding campaign is in the morning.

*
p<>{color:#000;}. Crowdfunding videos should be simple and appealing.

*
p<>{color:#000;}. Define your audience before starting a crowdfunding.

*
p<>{color:#000;}. When crowdfunding, focus more on how your product or service will improve the life of your customer.

*
p<>{color:#000;}. Your crowdfunding campaign can fail.

*
p<>{color:#000;}. The success rate of crowdfunding is forty four percent.

*
p<>{color:#000;}. Every entrepreneur has made a mistake at one point in their life.

*
p<>{color:#000;}. Startup businesses always have a hard time raising funds.

*
p<>{color:#000;}. Crowdfunding video should be of high quality.

Read more Business Loans articles: http://j.mp/29NuPE5

  • * * * *

 

Justification in Asking Family and Friends to Fund Your Business

Read more Business Loans articles: http://j.mp/29NuPE5

Turning towards family and friends for financial aid for your business can be a monstrous act. Those that are unwilling to help may try to demoralize you by listing all the possible wrongs that can make your business to fail while there will be a strain in your relationship with those who decide to help. Yet, many entrepreneurs will quickly run to family and friends when they need financial aid. How right is this?

Sixty three percent of entrepreneurs self-financed their business

Recently, the National Knowledge Commission released a study report that showed that 63 percent of entrepreneurs self-financed their business. A closer look at the study further revealed that at least half of that number asked family and friends for help and did not necessarily have to save up the entire needed fund. It is thus advisable that you should make your fund ready before you start your business.

Family and friends can disappoint you at the last minute

Often, family and friends will quickly say yes to your cash demand up until the time to write check comes says a business consultant, Tom Scarda. Irrespective of the close nit relationship, when you are seeking for financial help from your family and friends, you have to really convince them about the potentials of your business rather than expecting them to understand. The best way to convince your family and friends is as follows:

1. Make your business plan outstanding

Whether you are approaching your parents or your best friend, treat the discussion like a professional and wear the banker’s look. Not even a bank will give you loan without a good business plan so do not expect others to. A quick glance at your business plan should reveal your goals and how you plan to make profit which is what every investor will be keen to see.

2. Do not be tempted to ask for too little

You may want to play the nice guy when you approach a family member or a friend for financial help by asking for an amount that is far less than what you really need. This is disastrous. If the money you have cannot efficiently kick off your business, it is bound to fail and send a signal to your financier that you are not good with managing money which will make it more difficult for you to get further help. When asking for money, add up the following;

*

Initial investment: money you need to get the business ready

*
p<>{color:#000;}. Working capital: money needed for daily running of the business

*
p<>{color:#000;}. Home capital: money you need for your bills (survival ration) till your business begins to generate profit.

3. Have a repayment plan

Generally, people will be more willing to render financial help if they are confident that you will repay your debt (It is a little wonder that banks request for collateral as a guarantee). Same applies when asking family and friends for financial assistance. Show them you have plans to payback starting from six months’ time at most.

4. Give them an active role in the business

When family and friends contribute to your business, they will want to be in the know of how the business is done (obviously to safeguard their money). Make sure you discuss how much stake the investor will have before taking up any money from them. Expect that they can come up and ask you random questions from time to time. This should not piss you off; rather, get all the necessary documents handy so that you can always answer their questions convincingly.

Article highlights

*

Family and friends are rare source of funding for startups.

*
p<>{color:#000;}. When family and friends fund your business, keep them in the know of your progress.

*
p<>{color:#000;}. Family members who do not wish to help may try to demoralize you.

*
p<>{color:#000;}. Make plans to payback whatever you have borrowed.

*
p<>{color:#000;}. Family and friends may not ask for interest.

*
p<>{color:#000;}. Never ask for funds from family and friends under any rigid condition.

*
p<>{color:#000;}. Borrowing from family and friends may put a strain in the relationship.

*
p<>{color:#000;}. 63% of the entrepreneurs self-financed their businesses.

*
p<>{color:#000;}. To be hopeful for funds from family and friends is more likely to end in disappointment.

*
p<>{color:#000;}. Have a good business plan before approaching family and friends for fund.

Read more Business Loans articles: http://j.mp/29NuPE5

  • * * * *

 

7 Things You Should Get Handy When Seeking a Bank Loan

Read more Business Loans articles: http://j.mp/29NuPE5

Every business – both big and small – needs money. There are different financial institutions that both businesses can choose from to fund their business. However, bank loan is usually the most preferred for both small and large businesses. Since bank is dealing with depositor’s money, it is unlikely that they will invest it in a startup. If you plan on seeking a bank loan, here is a sneak peek of what they will ask of you.

1. Collateral

You need to have hard asset when approaching a bank because they will definitely ask for something to hold on to that is at least of same value with the amount of money that you intend to collect. Collateral is a way banks protect their investment in you because if you should ever fail to pay back, they will have no other choice than to sell off your collateral. An exception to this is the Small Business Administration (SBA) which is backed by the federal government to release loan to startups with minimal or no collateral.

2. Financial details

If your business has been operational for at least three years, banks will always request to see your financial details including past and current loans, debt, bank accounts, investment account, credit card account, tax identification number, addresses and contact information. If you are running a startup, then, they will seek to see your business plan – although a business plan can still be requested if your business have been operational.

3. Audited financial statement

Note that the auditing has to be done by an auditor that is not affiliated to your business to give it credibility. The balance sheet should have a list of liabilities, business asset and capital. The profit and loss record should cover at least three previous years. It usually cost a few thousand dollars to get audited statements ready.

4. Insurance information

If your business has an insurance cover you are more likely to get a bank loan than when it is not. The whole bank verification process is geared at reducing the risk of lending loss and an insurance cover serves just the purpose. If anything bad – like death should happen to the person, insurance cover will help the banks get back their money.

5. Agreement on future ratios

A commercial loan will often have what is termed the loan covenant. In this agreement, the company will accept to keep key ratios like current ratio, quick ratio, and debt to equity, and so on. If your financial level falls below some of the key ratios in the future, you may be denied any further loans.

6. Complete details of account receivables and payables

Account receivables include account-by-account information, payment history and sales. Account payables on the other hand include credit reference. There are a lot of resource materials online that explains these concepts – account receivables and account payables in details.

7. Business plan

Almost all commercial loan application will require you to present a business plan. A business plan will show if your business is viable or not. Business plans are becoming shorter but banks still require them to access the kind of product you wish to bring to the market, the product market and how you intend to make your profit.

There is software for writing business plan

A good business plan speaks faster than words. There is online business plan writing software you and employ to produce an outstanding business plan. In very exceptional cases, a well written business plan can guarantee you a loan.

Article highlights

*

Many startup businessmen usually go for bank loan as the primary source of funding.

*
p<>{color:#000;}. A well written business plan is essential when applying for loans.

*
p<>{color:#000;}. Business plan can be written with the help of online software.

*
p<>{color:#000;}. Lending institutions are always on the lookout for ways to reduce their lending risk.

*
p<>{color:#000;}. Commercial banks will usually request for collateral.

*
p<>{color:#000;}. It will be easier to get a bank loan if your business has insurance cover.

*
p<>{color:#000;}. Banks will scrutinize your profit and loss for the past three years.

*
p<>{color:#000;}. Banks will ask for an audit of your finances.

*
p<>{color:#000;}. If your business falls in some key ratios, your future chances of getting loan drops.

*
p<>{color:#000;}. You have to show your repayment plans.

Read more Business Loans articles: http://j.mp/29NuPE5

  • * * * *

 

The Different Business Financing Options in Canada

Read more Business Loans articles: http://j.mp/29NuPE5

To effectively finance your business in Canada, you will need to have a good knowledge of current assets on your balance sheet. A current asset plays a major role in dictating the cash flow and working capital which are described by professionals as liquidity. For Small and Medium Enterprises (SMEs), this means being up to date with your payments such as loan, lease and paying suppliers.

Financial statements will tell you whether you are gaining or losing

The statement of the cash flow of any firm is enough to tell if they are making gains or losing. Most of the companies around the globe give out their products or services on credit as a way of staying in the competition. This attitude is what creates the receivables. Receivables are unsecured promises made by customers to pay in the future and there is a provision to offset bad debts (i.e. when they fail to pay). Generating positive cash from account receivables (A/R) is the true success of any business.

Losing on the cash flow can be potentially good news

This may appear a little bit complex to an uninformed mind but losing on cash flow is an indication that the company needs to invest more in the account receivables to be able to maintain their sales. However, if there is an element of mismanagement in the company or loss of funds without an adequate cash flow financing to back it up, the company will be on the downslope to bankruptcy.

There are many ways to financing a business

Businesses––whether old or new––can choose any of the different available financing options to breathe life into their activities. Below are some of the financing options with little hints to what they stand for.

#
p<>{color:#000;}. A/R Financing: In this type of financing, the company uses its asset receivables or money it is owned as collateral to obtain a loan in a financing agreement. The capital stuck as debt is freed and the risk of non-payment transferred to the financing institution.

#
p<>{color:#000;}. Bank business credit lines: This type of loan can either be secured or not. It is a working capital loan that will make funds available to your business for its day to day running.

#
p<>{color:#000;}. Inventory loans: The business inventory loan is very important when a company runs out of money but are in need for inventory. The present and future inventory will be used as collateral and can be surrendered to the financier if the company defaults in payment.

#
p<>{color:#000;}. Sale leaseback finance: In Sale leaseback financing, the company sells its asset and leases it back such that they continue to make use of the asset for a long term but will no longer own it. This is generally done with fixed asset (for example real estate).

#
p<>{color:#000;}. Tax credit financing: This is the amount of money a taxpayer can subtract from the money they owe the government. Whereas exemptions and deductions tend to cut down the taxable income, a tax credit will reduce the size of the tax.

Business credit line is the recommended financing option

This form of financing is very interesting and highly beneficial to a business because the business can bill, collect, and finance their A/R without notifying their client, otherwise known as the third party. Here is special advice to industries looking for finance:

*

Make sure that your industry qualifies for the financing option.

*
p<>{color:#000;}. Study your cash flow and understand what factors have an impact on it.

*
p<>{color:#000;}. Speak to an experienced Canadian business financing advisor to help your business choose the financing option that is most appropriate for it.

Article highlights

*

A good knowledge of current assets will help you choose the best financing option for your business.

*
p<>{color:#000;}. There are different financing options businesses can choose from.

*
p<>{color:#000;}. A financial advisor can help you decide the best financing option for your business.

*
p<>{color:#000;}. Sale leaseback financing allows you to sell your asset and lease it back for a long term.

*
p<>{color:#000;}. A/R financing frees up capital tied down as debt.

*
p<>{color:#000;}. The best financing option will not achieve a good result if the business is mismanaged.

*
p<>{color:#000;}. Current asset usually dictates the working capital and cash flow.

*
p<>{color:#000;}. Inventory loans allow a business to get a loan for the purchase of inventory.

*
p<>{color:#000;}. Tax credit financing allows the taxpayer to subtract some money from their tax.

*
p<>{color:#000;}. Business credit lines allow the business owner to finance their business without the knowledge of their client.

Read more Business Loans articles: http://j.mp/29NuPE5

  • * * * *

 

Regulations Governing the Approval of a Bridge Loan

Read more Business Loans articles: http://j.mp/29NuPE5

The approval of loan is not an action that can be taken by any financial institution in isolation because various loans are under various regulations. For example, Home Mortgage Disclosure Act, Real Estate Settlement Procedures Act, and Regulation Z all play vital roles in the approval of loans in their different spheres.

Bridge loan is exempted from some of the loan acts

There are different types of loan structures but bridge loan is of interest because it is freed from Home Mortgage Disclosure Act, Real Estate Settlement Procedures Act but it is still bound to the Regulation Z which may as well be the key player to dictate if the loan would be approved or not. Except in the case where the loan gets an exemption under a section (§ 1026.3) of the law.

Bridge loans are short-term loans

Like the name implies, bridge loans are short term loans that can be taken while waiting for the main long-term loan. It bridges the gap that should have been lost to waiting for the long term loan and can be used to maintain the business within the period of the wait. In brief, it is an emergency loan, the duration for repayment is short and the amount that can be given is limited too.

Temporary finances are exempted from Regulation C

All forms of temporary loans (which bridge loan falls under) are exempted from Home Mortgage Disclosure Act. This is contained in the Regulation C § 1003.4(d) (3). In addition to the aforementioned regulation, Regulation X § 1024.5 exempts all bridge loans from Real Estate Settlement Procedures Act.

Regulation Z does not have a blanket cover for any loan

Unlike Regulation C § 1003.4(d) (3) and Regulation X § 1024.5, Regulation Z does not exempt any brief financing. Lenders such as Park West will normally look at the details of the transaction to know if it is under any exemption. Such analysis is vital before the loan application to avoid delay in approval or a situation where the financial institution will request for other documents like specific disclosures.

Regulation Z (§ 1026.3) exempts some transactions

It may appear as if Regulation Z (§ 1026.3) is the meanest of all but there are also some transactions such as loans over certain thresholds and business purpose credits which are exempted by Regulation Z (§ 1026.3). 

Certain requirements have to be met for commercial bridging finance

Regulation Z (§ 1026.3) recognizes immunities from integrated Disclosure Rule which are valid to certain rules. As a result of this, commercial bridging finance will need to meet certain conditions like being a non-interest oriented and meets certain cost and contract provisions, being a subordinate lien and being a Regulation Z compliant.

Working with experienced bridge loan lenders will save you from frustration

It is frustrating when you apply for a loan (particularly bridge loan) which you wish to use and settle some pressing need but the loan gets declined or you are required to provide more information which may not be within your immediate reach. When you work with expert bridge loan lenders, these are some of the issues that will be looked into before your application. Loans that enjoy a number of exemptions as mentioned above will be ultimately subject to Regulation Z.

Have a financial adviser

Every business is mandated to have a financial adviser. The work of a financial adviser is to help the business decide which loan is most suitable to them and analyzing if it is even necessary to take up loan if there are better alternatives.

Article highlights

*

Approval of loans is subject to various regulations.

*
p<>{color:#000;}. Small loans are exempted from various regulations.

*
p<>{color:#000;}. Bridge loan is a short term loan.

*
p<>{color:#000;}. Bridge loans are exempted from Home Mortgage Disclosure Act, Real Estate Settlement Procedures Act.

*
p<>{color:#000;}. The amount given out in bridge loan is limited.

*
p<>{color:#000;}. Temporary loans are exempted from Home Mortgage Disclosure Act.

*
p<>{color:#000;}. Short term loans are regulated by Regulation Z.

*
p<>{color:#000;}. Good credit score will increase your chance of getting a loan.

*
p<>{color:#000;}. To be exempted by Regulation Z, the borrower needs to meet certain criteria.

*
p<>{color:#000;}. Working with a bridge loan expert will help you avoid a declined loan application.

Read more Business Loans articles: http://j.mp/29NuPE5

  • * * * *

 

How to Get Personal Loans with the Lowest Interest in Singapore

Read more Business Loans articles: http://j.mp/29NuPE5

A loan is a necessity to meet financial needs of homes or businesses. However, many people shy away from loans because of the high interest rate associated with many of them. The large pool of money lenders further complicates the issue for those bent on searching out those with the lowest interest rates but all hope is not lost.

Personal loans are higher than bank loans

In the hierarchy of loans, personal loans are superior to bank loans. Unlike secured bank loans, finding a lending institution that would provide a personal loan at a reduced interest is a great challenge. Also, the numbers of institutions providing personal loans are more compared to the number of banks available.

Personal loans can solve a variety of needs

Personal loans are usually applied when one has been met with a shortage of funds or want to buy something significant. Personal loans can be applied to cater for wedding expenses, children education, vacations, medical emergencies or funding a more capital intensive program like buying of appliances or renovation of homes.

Good credit score is required for a personal loan

A good credit score is associated with creditworthiness by lending institutions. Credit score grows as you take more loans and pay back promptly. A good credit score of more than 600 is regarded as good although some banks will accept a 550 score. Lending institutions will mostly request to see your credit score before they approve of your loan.Those with good credit score can leverage on it to apply for the personal loan.

Low rate loans are the ultimate target of everyone

If you have been faced with an emergency or looming bankruptcy, a loan can easily get you out of the situation but at what cost? Taking up a loan to solve a pressing need will only solve half of the problem; the other half is paying back the loan. a loan with low interest is much easier to pay back than one with a high-interest rate. If the interest rate of a loan is too high, it becomes very easy for you to default in payment.

There are steps to get low rate loans

Paying a large amount of your loan upfront will increase the confidence the lending institution has for you and also reduce the burden of the remaining loans. Improving your credit score will increase your qualification for a personal loan. Personal loans with the best interest rate can easily be found using various online tools. Licensed money lenders in Singapore can also provide you with help on finding lending institutions with low interest.

Providing some information about yourself or organization will better qualify you for a personal loan

Personal information including contact details and financial requirements and employer or employment details will need to be provided for evaluation. Personal loan lenders will need to verify your sincerity. The process of obtaining a personal loan is becoming simpler in recent times compared to what it used to be in the past.

Linking up with bankers will help you obtain the right information to low loans

If you have friends working in banks or other financial institutions, the likelihood of you getting information about financial institutions offering low-interest loans will be higher because they have an inside knowledge of the current happenings in the financial institutions.There are times when banks and financial institutions would slash their interest rate for a short time. If you have a banker as a friend, they will quickly bring such information to you.

Article highlights

*

High interest rate discourages people from taking up loans.

*
p<>{color:#000;}. The large population of lending institutions makes it difficult to find one with low interest.

*
p<>{color:#000;}. Personal loans are used to meet pressing needs.

*
p<>{color:#000;}. Lending institutions will prefer to lend to those with good credit score.

*
p<>{color:#000;}. A credit score of 600 and above is regarded as good.

*
p<>{color:#000;}. High interest loans make paying back very difficult.

*
p<>{color:#000;}. The first step to obtaining a loan is to pay upfront.

*
p<>{color:#000;}. The process for obtaining loan is becoming simpler.

*
p<>{color:#000;}. Making friends who work in financial institutions will help you to get information on low rate loans.

*
p<>{color:#000;}. Personal loans are higher than bank loans.

Read more Business Loans articles: http://j.mp/29NuPE5

  • * * * *

 

Ways You can Grow Your Sales and Profits Using Loans from Expansion Financing

Read more Business Loans articles: http://j.mp/29NuPE5

The target of every company is to grow. The process of expansion is financially engaging and may require you to take up loans. With loans, expansion can be done all year round without your sales and profit being affected, unlike when you dip your hands into the capital of your company to finance your expansion.

Expansion comes with increased financial need

The increase in financial needs of an expansion will come from salaries of newly hired staff as well as the need to increase the inventory, receivables and purchase new assets. Cash need of any business is never static as it follows a sinusoidal pattern – there are times when a firm will require more money and times when only a little will be required.

Different businesses will require different type of funding

There are different types of funding options and packages provided either by banks or alternative funding sources. Picking the wrong funding option may harm your business rather than helping you to achieve your goal. There are some issues to take note of when taking up a loan and they are as follows;

1. The interest rate 

Some business owners make the mistake of taking up loan from any source without first looking at the interest rate. If the interest of a loan is too high, it may eat up your profit and extend the time of your repayment. Automatically, your credit score will be affected likewise your chances of obtaining future loans.

2. The Payback time

If you are considering taking up loan for expansion purposes, then you should look for long term loans. Short term loans will only help you start the expansion process but you may not see it to completions.

3. The maximum amount you can get

Before carrying out an expansion work, you must have taken your time to evaluate the project and how much money and time it would take. It is better to take loan in excess of the amount you need than to run into shortage. The truth is that if you do not complete the expansion work, you may not be able to get the increase in profit that will facilitate your repayment.

Identify the right loan for your business

Every loan has different requirement to secure them. Also, your business may qualify for only a few types of loans. Identify the loans that your firm is qualified to take; then sieve them further by looking at their requirements and terms – always read the terms of agreement properly before accepting any loan.

Be certain that your firm can manage money properly before taking up loan

When you take up loan without making preplans on how the money will be spent, there is the tendency that the money will be misused and the aim for which the loan is taken remains unfulfilled. When this happens, you will end up running into a situation where all your profit will be channeled into repayment of debt or you risk losing your firm or whatever you used as collateral.

Various options can be chosen for funding expansion

The list of funding options from which you can choose from to finance the expansion of your business includes A/R financing, Commercial business credit lines, Equipment financing, Sale-leaseback, Inventory loans, Royalty financing, Unsecured cash flow loans, Asset-based bridge loans/ asset revolving credit lines.

You need to understand the loans

Understanding the loans and properly analyzing your business need will help you to determine which loan to take. A growing company may need a combination of funding sources.

Article highlights

*

Every startup business will desire to grow and expand after a period of time.

*
p<>{color:#000;}. Loans can make expansion possible without sales and profit being affected.

*
p<>{color:#000;}. Salaries of the extra hired hands usually push up financial need.

*
p<>{color:#000;}. The right funding option will differ from one business to the other.

*
p<>{color:#000;}. High-interest rates make repayment difficult.

*
p<>{color:#000;}. Long term loans are better for extension purposes.

*
p<>{color:#000;}. Taking insufficient loan will harm your business.

*
p<>{color:#000;}. A financial adviser will help you identify the best loan for your business.

*
p<>{color:#000;}. Only take loans when you can manage it.

*
p<>{color:#000;}. Your company many need to take more than one type of loan.

Read more Business Loans articles: http://j.mp/29NuPE5

  • * * * *

 

All You Need to Know about Prepayments and Extensions

Read more Business Loans articles: http://j.mp/29NuPE5

All borrowed money must be paid back at some point. The key issue when it comes to repayment is to ask if the loan achieved the purpose for which you took it, if not, will there be room for an extension? Understanding how loan payment works is a vital key to accessing loan investments.

The payment structure is the same across board

Loan repayment usually takes on of two forms- either the borrower pays the monthly interest along with a certain amount of the initial money borrowed or they pay the monthly interest and pay the initial amount of money borrowed in a lump sum at the exhaustion of the agreement period. Investors know this and will probably insist on sticking with the status quo.

Standard loan documents make provision for the borrower to pay off loan

When a standard loan document is being prepared, there is a provision for the borrower to pay off the loan before its due date and often includes a clause stipulating if the borrower can seek for an extension to the loan maturation time. These are rare conditions that go off the usual terms of a loan agreement.

Many reasons may warrant a borrower to prepay or seek for extension

A borrower may decide to utilize their right of prepayment even when the loan maturation has not reached. In the same way, a borrower may seek an extension if they still have needs yet to be met. No matter the decision of the borrower, the investor needs to have in mind that they will be affected in one way or the other.

Seeking for extension will tie up the investor’s money

When a borrower is seeking for an extension, one thing is certain – the investor’s money will remain committed to the borrower’s project for more period of time than initially agreed upon. Some investors may grant the extension without altering the initial agreement while others will seek for a renegotiation.

Extension time is usually stated in the agreement

If a loan makes provision for extension, the extension time will be indicated on the agreement. For example, a loan may have a maturation time of one year with an extension of three to six months. What this means is that the borrower can seek for an extension of at most six months after the maturation date. The borrower will continue to pay interest but the lump sum will be paid at the end of the six months extension.

Lock-out period blocks prepayment option

A loan agreement may have a lock-out period and prepayment penalties. The main aim of lock-out period is to prevent the borrower from paying back the loan before the agreed date. A prepayment penalty is usually enacted by a lender when a borrower pays back a loan earlier than expected because this will stop the lender from getting the anticipated interest. When loan agreement does not have a lock-out period, it means that the borrower can decide to pay back at any time before the maturation date.

Lenders can invest in other loan offerings when borrower pays off early

Lock-outs and prepayment penalties are more in commercial real estate than in residential real estate. The flexibility of residential real estate has been attested by various homeowners. Investors should not mourn the expected loan interest they miss when a loan is repaid early, rather, they should invest their money into other loan offerings – and many of them are opening up daily.

Article highlights

*

Most loan documents give room for extension.

*
p<>{color:#000;}. A borrower may decide to pay off a loan before the due date.

*
p<>{color:#000;}. Interests are either paid monthly or together with the lump sum at the expiration of the loan.

*
p<>{color:#000;}. Loan extension is usually for 3 to six months.

*
p<>{color:#000;}. The decision of the borrower directly affects the investor’s money.

*
p<>{color:#000;}. When a borrower seeks for an extension, it means the investor’s money will be tied up.

*
p<>{color:#000;}. Payment of loan before the due date will make the investor lose money in the form of interest.

*
p<>{color:#000;}. Payment of loan before the due date is not allowed by some investors.

*
p<>{color:#000;}. Payment of loan before the due date may attract some penalties.

*
p<>{color:#000;}. Lock-out period is more in commercial real estate than in residential real estate.

Read more Business Loans articles: http://j.mp/29NuPE5

  • * * * *

 

 

***~~~***

Cover image credit: [+ https://www.flickr.com/photos/milaap/12674120954/in/photostream/+]

###


Business Loans (Volume 6)

From small to corporate business owners and/or managers may need business loans. In this modern age, it is getting hard to run business without any loan when a business starts growing. When a business is growing, it is hard to cover all financial needs with personal finance. There are many other situations when a business loan becomes necessary. This book will give you some insights about getting and managing business loans. Download and read this easy to read and understand book.

  • ISBN: 9781370045105
  • Author: Word Chapter
  • Published: 2016-10-20 22:05:09
  • Words: 7506
Business Loans (Volume 6) Business Loans (Volume 6)