Additional Sources of Business Financing

by John_S on July 19, 2014

Business loans are offered to start-ups, entrepreneurs, corporations, and new and small businesses. Borrowers can choose from different financial solutions such as commercial and business term loans, cash flow finance, business loans and lines of credit, and others.

Long-term and Short-Term Loans

Applicants for business funding can choose from disaster and real estate loans, micro-loans, and others. In addition to loans under government programs, credit unions and big and small banks offer different financial solutions. Basically, financing falls in two main categories, secured and unsecured. Secured loans require some form of collateral such as real estate holdings, machinery and equipment, interest earning deposits, inventory, fixtures, and others. A good credit score is the main requirement for an unsecured loan. Other types of financing include peer to peer loans and equipment cash out refinance. Borrowers who opt for equipment and vehicle loans can use the funds to purchase machinery, trucks, vans, and so on. Long-term loans are also offered to finance the purchase of real estate, rental estate, equipment, industrial plants, and facilities. Other options are permanent, interim, and income-producing financing. Micro-loans are another option for small businesses, and they are usually offered by non-for-profit organizations. You can use the funds to purchase supplies and materials or as working capital. The interest rate usually varies between 8 and 13 percent. Short-term loans are another option if you need cash for purchases, inventory, or accounts payable. In addition, there are small business loans under different government programs that come with attractive interest rates.

Requirements and Criteria

Financial institutions run a credit check and require that all applicants submit supporting documentation. You may need to submit your profit and loss statements and current balance sheets. Most financial institutions require that borrowers present their personal and business financial statements, along with their cash flow projections and income statements. Your lender will look at your financial statements, including your tax returns, payments and outstanding balances, liabilities, and assets. If you are applying together with a cosigner, you need to present recent paystubs. Legal documents to submit include commercial leases, franchise agreements, and others. If you apply for a secured loan, you should bring a collateral document with you. You may want to explain whether you will use the funds for business expansion, product development, or your current near term expenses.

Alternative Arrangements

Secured and unsecured working capital loans are available, and the latter are offered to customers with a good credit profile. New business owners can choose from bank and buyer financing. Business acquisition loans help companies to purchase existing businesses.

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Investment Strategies and Other Factors

by John_S on May 1, 2014

There are different types of funds to consider as alternatives to traditional investment instruments. Some funds focus on long-term capital growth while others offer benefits such as a balanced mix of liquid and illiquid investment instruments. Hedge funds also offer benefits such as comparatively lower leverage and higher liquidity, but there are risks and disadvantages such as transparency and liquidity.iStock_000008642715XSmall

Consumers often invest in hedge funds to benefit from strategies such as arbitrage and selling short and to grow their savings. Hedge funds offer downside protection meaning that they help improve the customer’s return and risk profile. The main downside for investors is that managers are allowed to borrow large amounts of money, and this can lead to poor performance. Another problem is that regulatory bodies and investors themselves are unable to keep track of performance. Managers take more risk to improve performance because their fees are also based on the fund’s performance and returns. Investing in a mutual fund is one alternative, but it is important to weigh the risks and potential problems. Mutual funds come in different varieties and invest in money market instruments, bonds, stocks, and other investment vehicles. One of the main benefits of mutual funds is that they are structured as liquid investment vehicles.

There are some limitations, however, and one is that they can be traded at the end of the day. The fact that there are no sales commissions or transaction fees makes mutual funds popular with investors (http://www.canadabanks.net/default.aspx?article=Investing+in+Mutual+and+Hedge+Funds). They also allow subsequent investments and invest in different asset classes, which translates into automatic improved diversification. When looking into mutual funds, investors take into account factors such as risk-to-return, performance, investment solutions, and others. Managers use different investment strategies and often consider factors such as growth, value, and yields. Whether to invest in mutual funds depends on your investment goals – to grow your savings, save for retirement, or anything else. Ongoing fees and charges are one factor to consider. Investors are often unaware of the tax consequences, and this is one factor to consider. Make sure you ask about the operating fees as well.

Besides mutual and hedge funds, investors have plenty of solutions and schemes to choose from, including high-interest savings accounts, certificates of deposit, Forex trading, and others. While stocks are more volatile, bonds are safe to invest in. There are other types of investments such as futures, options, and so on. Make sure you consider the costs, fees, limitations, amount required, and other factors.

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How to Build or Rebuild Credit

by John_S on April 27, 2014

There is a wide array of credit cards available, depending on factors such as employment, level of indebtedness, and others. Clients can choose from rewards, airmiles, no annual fee, student, and other types of cards. Customers with very good credit who are frequent shoppers or travelers can choose from a selection of credit cards. There are different options to choose from depending on your lifestyle and payment habits. One option to consider is a rewards credit card that allows holders to redeem points for brand-name merchandise, airfare, and more. Cashback credit cards offer cash back for purchases made at department stores, gas stations, supermarkets, and participating merchants. Credit card companies offer rewards and incentives to encourage use and attract more customers. Specialty cards award customers for making purchases at participating retailers, coffee shops, restaurants, and other establishments. Issuers offer benefits such as complimentary bonus points that can be redeemed for CDs, holidays, and days out. Rewards and cashback credit cards offer plenty of benefits, but some issuers assess fees and charges. Credit card companies also look at spending patterns to determine which schemes and programs will be most effective and lucrative.

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Borrowers with good credit have access to rewards programs, cheap flights, in-flight refreshments, and more.Borrowers with compromised credit usually have a history of bankruptcies, delinquencies, foreclosure, late and missed payments, and maxed out credit cards. Borrowers with poor credit are considered risky customers, and their pool of options is more limited The interest rate usually varies between 30 and 40 percent. One alternative is to apply for a department store credit card that allows borrowers to save money on big-ticket purchases. A department store credit card is a good option for borrowers who pay the balance in full because of the higher rate of interest. Cards also offer discounts on insurance policies, car rentals, travel, and more.

Regardless of the card of choice, making regular payments helps holders to build credit, and their chances of getting approved for a standard credit card increase. Then there is the option to apply for a student card that comes with discounts on school-related purchases and other perks and allows students to build their credit history. Students enjoy benefits such as attractive interest rates, no annual fee, discounts, and others.

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Applicants with a High-risk Profile

by John_S on April 22, 2014

There are different types of financing, including installment and auto loans and cash advances. They are offered by different financial establishments, including banks, savings and loan associations, and others. Banks usually offer unsecured loans to borrowers with a good credit score because the risk of default is higher.

There are different types of unsecured loans, including used and new car loans , consumer, and construction loans. Banks and car dealerships offer auto financing to borrowers who plan to buy a vehicle. The repayment schedule, interest rate, and fees vary, and it pays to shop around. constructionStudent loans are also offered by banks, government agencies, and other entities. Students benefit from competitive interest rates and flexible repayment solutions while the funds can be used for college-related expenses such as books, textbooks, and tuition and board. A common feature of these loans is the fact that they are not secured against some valuable asset such as tools of trade, or anything else of value. Borrowers with a high income level, whether salary or wages or investment income, are usually offered attractive deals. Applicants with poor credit often resort to bad credit loans, payday lenders, and other options.

People are usually asked to present documents such as recent salary slips, photo ID or passport, account statements, and others. Other documents include tax statements, residence permits, and an application form. Self-employed individuals may have to present additional documents. Banks also offer unsecured business loans and require verification of business and non-business income, business leases, and other documents.

Online banks, finance companies, and payday lenders offer loans to borrowers with poor and fair credit. It takes weeks to get approved for a standard bank loan but payday lenders advertise instant approval. Both non-bank lenders and banks offer payday loans as an alternative to standard types of financing. Borrowers usually resort to construction loans to pay expenses such as urgent repairs. A secured loan is one alternative for borrowers who can pledge some valuable asset. Secured loans are usually used for large purchases and refurbishment projects. Another option is to ask your family for a small loan or to apply with a co-signer.

 

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Grants, Revolving Lines of Credit, and Venture Loans

April 15, 2014

Peer to peer lenders, banks, credit unions, and other lenders offer business loans. Loans are offered to small and large businesses in different industries. Business Loans and Requirements The main types of financing include loans and revolving credit such as lines of credit. Loans are offered under different government programs, and the terms vary depending […]

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Bank Loans and Vendor and Supplier Financing

April 10, 2014

Big and small businesses use debt financing to expand to new markets, develop new products, and finance purchases. There are different options available depending on the applicant’s personal and business credit score, loan purpose and amount, financial and bank statements, and other factors. Finance companies and microlenders are two options for borrowers with poor credit. […]

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Specialty and Standard Credit Cards Offered by Banks and Non-Bank Issuers

April 8, 2014

The cards have two options for borrowers with a history of foreclosures and late and missed payments. There are benefits to using a secured card, and one is that the borrower’s payments are reported to the credit bureaus. This is one option for borrowers who are turned down by issuers offering unsecured credit cards. Customers […]

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Auto Financing Options for Budget-Conscious Borrowers

April 5, 2014

Car loans are offered for the purchase of new and used vehicles. They are offered by car dealerships, banks, and credit unions, and the terms, interest rates, and repayment options vary. Terms and Criteria Borrowers can choose from secured and unsecured auto loans with a fixed or variable interest rate. Secured loans come with a […]

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Benefits for Credit Line Holders

April 1, 2014

There are different types of credit lines, offered to individual borrowers. A cash credit is one type of LOC that allows borrowers to withdraw funds on a constant basis. Features and Criteria   Financial institutions offer products with tax-deductible interest and no annual fees, closing costs, and appraisal fees. LOCs offer many benefits, but banks […]

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Consolidation Application Process

March 30, 2014

One of the benefits for borrowers is that they are offered a single loan to pay off multiple debts. Borrowers make one payment instead of having to worry about multiple deadlines and monthly payments. Consolidation is one option for borrowers with excessive debt. This is a way to lower the interest rate and improve your […]

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