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A Beginner's Guide to Personal Finance

Managing personal finance is a delicate issue at the best of times that requires the careful consideration of various factors. You have your basic salary which gives you a monthly or yearly injection of cash and then you have your direct debits – bills for your rent or mortgage, internet connection, water, gas, insurance, car, mobile phone credit etc. But it’s far more complicated than all that even, there’s your living costs including food, transport and petrol, holidays, leisure activities, Christmas presents; and more coming in too – loans, gifts for birthdays and holidays, bonuses, investments… it all gets rather hard to keep track of, but keep track of it you must if you’re going to keep yourself afloat. Fortunately it’s always possible to get help from a financial advisor, or a refinancing company that can pay off your debts with a single loan. However this often results in unnecessary cost on your part and will never account for all your different costs and profits.

Fortunately there are some simple tips you can utilise to make sure you manage to keep on top of your finance. The first and most important tip is to keep a note of everything you spend and receive in a day. This shouldn’t take too long if you keep up to date with a cash book. It’ll take about ten to twenty minutes every evening but at the same time it’ll mean you know exactly what you’re spending and how much is in your account. Similarly you should keep a note of when your credit cards need paying and which other direct debits are coming in and out each day. This way you’re far less likely to bounce a payment or to spend money you can’t afford, which will in turn mean that your credit rating stays healthy. If you get bad credit it will become very difficult to get loans or mortgages and only through the process of credit repair will you be able to win back the trust of the banks.

Another simple tip is to use different accounts for different lumps of money. For example, it’s great to have an account for your debits and mortgages which should probably be the same account your monthly payments come into. Workout how much your loan repayments and debits come to a month and make sure there’s always at least twice that in the account at all times. This again will prevent debits bouncing and a need for credit repair. If your total outgoings come to more than your total income then you know you need to find a loan. On the other hand if you have a lump of money that’s large enough to pay off a year’s worth of one debit or loan – for example a year’s worth of rent – you can put that into one simple account and set up a direct debit to their, and this way you’ll never have to worry about it and won’t find yourself without a roof over your head. If you have lots of spare cash you can do this with all your debits keeping your income free to spend on daily activities.

Alternatively you can ‘siphon’ some of your profit off, for example ten percent which is then money that’s free for you to spend as you wish without worrying about it damaging your overall money. Similarly you should siphon off some savings, again a percentage of your salary and maybe any gift money, which you can then use to gather interest or use on a rainy day to pay off credit cards etc. These are just some simple steps you can take to make your finance more manageable and keep your money under check.

No Credit Check No Fuss Loans

Payday loans are the fastest and most convenient option for getting a cash advance for emergencies before your next payday. However getting payday loans and their repayments involve certain important aspects. Herein we are attempting to answer all your general queries related to Payday loans and we hope it will serve as a tool to open up any mystery surrounding payday loans or cash advance.

What Is A Payday Loan Or Cash Advance Loan?

We daily come across many loan types like housing loan, personal loan, and education loan. However, the payday loans are a new buzz in the market, and it is very popular. This loan is known by many names like “Cash Advance”, “Paycheck loan”, “Check loans”, and “Payday advance loans”. Let us understand what is a payday loan or cash advance loan and how and when it should be used for your maximum advantage. Payday loans are unsecured loans, which can be used for meeting your emergency financial needs and is paid back out of your next paycheck on your payday. Thus, payday loans are the shortest tenure loans among the other loans available in the market.

Are there any limitations on payday loan or cash advance loan usage?

Many a times we face a situation when we need money badly but feel like our hands are tied as our payday is still several days away. In such a scenario, we either have to shelve or defer our plan of purchasing something or go for a heavy interest credit card loan to meet the obligation. The requirement could be to pay up unexpected medical bills, your kid’s school fee, to avoid bouncing of your issued checks or any other financial obligation. In such trying times, payday loans or a cash advance comes in handy. Thus, you can use this cash advance for whatever purpose. There is no restriction on the usage of payday loans.

Am I eligible to receive a payday loan or cash advance loan?

The best thing about payday loans is that they can be had even if your credit rating is not very good. The second best thing about payday loans is that taking a cash advance does not affect your credit rating. All you need to be eligible to receive the payday loans is to have a running checking account and a regular job.

How should I apply for a payday loan?

To apply for the payday loans, we would say it is easier to do than to say. You can apply for payday loans online using Internet. You may be required to supply some basic information such as your Name, Address, and your employer details. Some companies offering payday loans may ask for your Bank Statement or pay stub over fax. The documents required by these companies for payday loans are minimum in comparison to other types of loans.

Asset Loans and Accounts Receivable Financing Solutions

Canadian business, during its search for new and innovative financing solutions keeps hearing about asset loans and accounts receivable financing solutions. These two types of financing for Canadian business owners and financial managers are a subset of what is known as an asset based line of credit.

The financing is newer to Canada, growing in traction and popularity, and still widely misunderstood as a total financing strategy for your company. Let’s clarify some of those myths and explore some of the benefits of these terms.

One of the main differences of an asset loan is that typically is financed through a non bank arrangement. You should seek this type of loan if you are unable to generate sufficient working capital to finance your business in a traditional Chartered bank environment in Canada.

In essence your receive financing and operating facilities, depending on how they are structured, around the various asset categories of your business – the two main asset categories are:

Accounts receivable

Inventory

In many circumstances you can also leverage equipment, and occasionally real estate.Clients then ask us why this is different from what they are used to – which is bank financing around these same assets. The answer is that a very strong focus is placed on the true underlying value of your assets – less reliance is placed on balance sheet rations, loan covenants, outside collateral, etc.

Most leases and operating facilities in a traditional bank environment are very cash flow focused. The irony of these types of calculations is very evident to the business borrower – that irony being that historical cash flow is used to forecast future cash repayment abilities. That quite often doesn’t work for many companies who are experiencing temporary challenges.

Asset loans, and asset based lines of credit focus on the collateral. Many clients we deal with have the collateral in A/R, inventory, purchase orders and new contracts, equipment, etc but can’t satisfy traditional cash flow lending requirements. That is why they are prime candidates for an asset loan, an asset based line of credit, or at its simplest and most basic form, a receivable financing that fully margins their accounts receivable with no set limit on future growth.

So now we understand what the facility is. How does it work on a day to day basis our clients ask? The answer is simply that it’s a facility that goes up and down, frankly every day, with your borrowing needs. As your receivables and inventory fluctuate you draw down against their current value. This optimizes the amount of cash flow and working capital available for sales growth and profit generation.

The security mechanisms around these facilities are very similar to any type of bank financing – that is to say that a first charge lien is placed on the assets being financed. Advances rates on accounts receivable and inventory are established and as cash is advanced and then repaid by your customers the cash is turned over to pay down your revolving balance. It’s as simple as that. The true beauty of the facility is that as you grow your facility grows with you – that is probably the most powerful aspect of such a financing.

These working capital facilities, predominately A/R an inventory based are becoming more traditional in nature ever day. Speak to a trusted, credible and experienced advisor in this area – if you are not getting the financing you need to grow and prosper competitively then this type of solution may be exactly hat you are looking for.

Financing Your Business by Leveraging Your Customers Credit

Finding a way to finance your business in the current economic environment remains pretty difficult. Most institutions have tightened their business financing standards and will only offer business loans to large companies that have substantial assets and impeccable financials. Unfortunately, few small companies have been able to weather the recession without a substantial financial impact. And thanks to the recession, most small businesses don’t have impeccable financial statements – that’s why they need business financing. Fortunately, a business loan is not the only financing alternative.

Is your company having cash flow problems because customers are paying their invoices slowly? If this is the case, and If your customers have good commercial credit, you may be able to use invoice financing. Invoice financing bridges the gap between delivery of service and payment and helps companies with cash flow problems. This solutions provides predictable cash flow, enabling the company to meet expenses and capitalize opportunities.

There is one critical advantage of that differentiates invoice financing from other solutions. Your customers credit is much more important than your own company’s financial situation. This means that companies whose biggest asset is a solid list of customers can usually benefit from invoice financing.

Most invoice funding transactions are structured as invoice purchases – where the financing company buys the financial rights to your invoices and pays you immediately. They settle the transaction once your client pays the invoices in full. The key point is that the finance company buys the invoice, therefore they are very interested in the credit worthiness of your client. They consider that to be the strongest collateral for financing. And this allows you to leverage your clients financial strength to your advantage.

Having good paying clients is a key requirement to qualify for an invoice financing program. Additionally, your invoices need to be free of legal encumbrances such as liens or judgments. Generally, invoice financing works best for companies that are reasonably free of problems. However, it can also be used in turnaround situations where funding is needed to restructure operations.

Positioning Your Company for Debt Financing

Positioning Your Company for Debt Financing:

There was a time in the old days when going to the bank was the only way to get outside capital for your business. These days with the explosion of raising equity investment, many of the guidelines for running a company have been revolutionized. Unfortunately this new phenomenon is only true for companies with super “star power”, because these companies have potential to create sky-rocket return earnings.

For everyone else, sticking to fundamentals is where it’s at. Building your company incrementally, following a pre-prepared business plan, watching expenses, and increasing sales. When your company moves beyond its launch, it begins to operate much like a bank. On the financial side you will be making credit decisions
involving your customers. Some will have to pay C.O.D., some you will extend net 30 day terms. In this sense you are now becoming a banker for your customers.

Without getting into how inexpensive debt financing ultimately is compared to equity (try 20% annualized interest versus 20% ownership lock stock and barrel), in certain situations the time honored tradition of borrowing money can be the best solution for increasing growth or starting a company.

By knowing what commercial finance companies look for, you will become a much more attractive prospect.

1. Concentration – This means putting all your eggs in one basket. Avoid going out and making a large sale to a customer and then not continuing your sales effort to find more customers. The risk of a problem developing with your main customer, or for whatever reason they are no longer buying from you can obviously be detrimental to your success. Finance companies look for incoming revenue to be spread evenly over a number of customers.

2. Creditworthiness – Who are you lending your hard earned assets to? What kind of due diligence do you perform on new customers? The challenge here is whether to accept a lucrative sale with a company that could never get credit from any type of finance company. You are essentially telling yourself that you know better than the banker about loaning money. Finance companies will respect a business owner that has a thorough credit checking process and a number of stable credit worthy customers.

3. Book keeping – While some businesses send out all their accounting to outside agencies, it is helpful to have a qualified book keeper on staff. When it comes time to seek financing, being able to produce an instant fiscal snapshot of your company will show the sophistication of your operation. Finance companies appreciate businesses that keep a close eye on their books.

4. Taxes – Pay them. Using the Internal Revenue Service as your funder becomes expensive. Whenever you work with a finance company, you will be pledging assets as collateral, thus the nature of debt financing. When you fail to make tax payments, the government steps in and places a lien against those same assets essentially stepping into first position.

This leaves the finance company with money outstanding to your business and no collateral to back it up. This places your entire relationship in default. When going to closing on financing expect to sign a form that allows the finance company to receive duplicate correspondence from the IRS. This is standard procedure to track tax problems. Owing taxes does not mean you cannot get financing. It is entirely possible to receive a subordinated debt agreement from the IRS which allows the finance company to work with you unencumbered.

5. Bankruptcy – If you have ever entered into a bankruptcy proceeding whether personal or business, own up to it right away. It will come out, and being up front about the circumstances will enhance the necessity to overlook the past difficulties.

6. Applications – Finance companies ask for a variety of information when performing their due diligence. Do not be alarmed, they are not trying to steal your secrets. They need to feel comfortable with you and your company. Each company has its own threshold for fact checking. Invariably the finance companies that do the most thorough job are the most reliable and safest to do business with. Finance companies like working with a business that takes the time to put a loan package together in advance of asking for financing. Typically you can start with; Interim Balance & Income Statement, Interim Profit & Loss Statement, Last Year End Statements, Accounts Payables Aging Report, Accounts Receivables Aging Report, and of course Tax Returns.

7. Contracts – Be prepared for onerous language. Finance companies cannot sugar coat the reality that if something goes wrong they need to exercise their rights. They have to go into the relationship always thinking that the absolute worst case scenario will unfold. Once a finance company finds itself being defrauded, stolen from or payments not made without explanation, it’s too late to insert stronger language for protection. By and large the language is standardized and walking from a deal to start shopping for less demanding legalisms won’t produce much.

Remember this, a contract is just paper in a file cabinet until you default on your agreement. Stay within what you agreed upon and all the tough language won’t matter. Even if you start having financial difficulties, get in touch with your finance company immediately. You can greatly reduce the chance of default by showing that you are pro-active with your situation.

8. Using the money for the right reasons – This sounds obvious but in certain cases it can be highly relevant. You hear a lot about going to the right Venture Capital Firm that would handle your type of investment. In some ways that holds true for debt finance companies. They tend to work within industries that they feel comfortable. Additionally the type of financing company will depend on your plans for the money. If you are trying to set up a new business infrastructure, then a working capital line of credit is not your best option. You will probably do better with a term style loan that will allow you to amortize the expense over a period of years.

9. Management Integrity – Also like equity investment, get a good team together and hold onto them. Finance companies raise red flags when a long time Financial Officer who has been the contact person at the company since the inception of the relationship all of a sudden leaves without explanation. Again, always fearing the worst, the finance company could unjustly feel that something untoward was afoot and begin to scrutinize your account more closely. Even though finance companies are not part owners of your business, they are partners in your success just like your good customers. Keep them abreast of breaking news.

10. Be Professional – Answer calls and messages expeditiously, be prepared with information, show up on time. When its crunch time and you need an extra fifty thousand dollars for a week to get a better deal from a vendor, you would be surprised how much mileage you can get by being a courteous and thoughtful customer to your finance company.

The Different Shades of a Personal Loan

Personal Loans are loans that are easily available and help you fulfill a number of needs. Personal loans are not taken out for a specific purpose. You may take out a personal loan to fulfill all your big and small needs. You may avail a personal loan to consolidate your debt. A cheap personal loan can be used to pay high rate credit card dues. Moreover, you will need to repay the loan to just one lender.

A personal loan may also be used to improve your credit score. If you have a bad credit history, take out a Bad Credit Personal Loan and repay the loan as per the loan terms. This will help you improve your credit score. This article explains various types of personal loans. Personal loans are broadly classified as secured and Unsecured Loans.

Secured Personal Loans

Secured personal loans require collateral and carry low rates of interest. Secured personal loans offer flexible repayment terms. The amount of monthly payments is small in case of secured personal loans.

Unsecured Personal Loans

There is no need to offer your property as a security in case of an unsecured personal loan. The rates of interest on unsecured personal loans are higher than the rates on secured personal loans.

Based on the rate of interest, personal loans can be classified as fixed rate personal loans and adjustable rate personal loans.

Fixed Rate Personal Loans

In case of fixed rate personal loans, the rate of interest and the amount of monthly payments remain the same throughout the loan period.

Adjustable Rate Personal Loans

The rate of interest on an adjustable rate personal loan keeps on changing as the average rate prevalent in the market changes. Consequently, the amount of monthly payments also fluctuates throughout the loan period.

Based on the mode of repayment, there are three types of personal loans – installment loan, balloon loan and single payment loan.

Installment Loans

In case of this type of personal loan, the loan amount, along with its interest, is repaid in the form of monthly installments until the loan period expires.

Creative Financing for New Businesses

It can be very difficult for businesses with less than two years of operation to obtain business credit. With the vast majority of businesses failing within the first two years of operations banks are not aggressive with lending monies to new businesses. In fact in the United States 90% of small businesses cannot obtain financing from a traditional bank.

All businesses, at one time or another, need to access operating capital to grow or to overcome seasonal revenue fluctuations. It is no surprise that many businesses fail due to cash flow issues. If you can’t get financing from a traditional bank where does the money come from? A lot of businesses owners will tap into personal savings, put there home ownership at risk or get family and friends to invest. This does not have to be the case.

There are ways to start or operate new businesses and access working capital without a bank loan, personal investment or the investment from family and friends. These financing methods include acquiring equipment with a lease, merchant cash advances, invoice factoring, and purchase order financing.

If a new business is unable to get the capital to purchase equipment they can lease. Equipment leasing is a viable way of securing much needed equipment, computers or vehicles. There are leasing programs available for start up companies and for individuals with marginal credit. Leasing is extremely flexible and payment plans can be tailored to protect your cash flow. If your credit rating is strong you can lease equipment with a 90day deferral payment so that you can use the equipment to finish the job before you even need to make a payment. Leasing equipment generally requires a lower credit score than borrowing money for the equipment.

One of the toughest industries to secure a small business loan is for a new business operating in retail or as a restaurant. These types of companies usually have very little in the way of assets to secure financing and are classed as higher risk. Both restaurants and retail locations accept credit cards. This provides for a method of accessing unsecured cash called a merchant cash advance. This is not a loan but rather a sale of future credit card receipts at a discounted rate.

If a new business receives a large purchase order they can use that purchase order to obtain the funding needed to purchase the supplies to fill the contract. Purchase order financing can provide 100% of the funding needed to get your product out the door. Typically this type of financing would be for import/export or distribution companies where a product is purchased and resold at a profit, however some lenders will look at covering labor and associated costs. It all depends on how credit worthy the customer is and what type of industry they are in.

If you supply your product or service to other businesses and they don’t pay you for 30 to 90 days it can become almost impossible to manage your cash flows. Once you add in growth to this situation cash flow management becomes even more difficult. Due to the delayed payments, your costs increase faster than the revenues coming in. Lets look at a simple example. You own a staffing agency and you land a new large customer that will double your sales. This new customer will pay you 60 days after your temps complete the work. Your sales just doubled and so did your costs. Payroll can’t wait for 60 days, because your employees need to get paid on time or they will go elsewhere.

Cost immediately double but you do not see an increase in revenue for 60 days. This is a major hit in your cash flows and you need access to working capital immediately or you won’t be able to make payroll. The solution to your problem could be in factoring the invoices. With invoice factoring you can receive cash within 24 hours of your temps completing their work. Now there are no cash flow issues. Factoring is easy to qualify for, if your customer has good credit, and set up correctly it can be a tremendous cash flow tool.

Secured And Unsecured Personal Car Finance

There are two sorts of car loans accessible in Australia for personal use; secured and unsecured.

Secured
The majority of personal use loans in Australia for cars, boats, bikes etc are secured.
In this, one borrows money to acquire a concrete item, like a vehicle or boat which is used as a security for the loan. Secured loans usually have a minor interest rate than unsecured loans.

Unsecured
This is an extremely flexible loan; as it can be used for almost several purposes including cars & boats that do not meet the criteria for the secured loans. There is no security necessary for this kind of loan; therefore interest rates are to some extent advanced than secured loans.

Lenders make an overall analysis of the candidate’s situation, but in most cases, secured personal loans for motor vehicles are easier to acquire than other sorts of personal loans

Submitting an application for car loans is moderately a simple process and the majority of lenders pursue the similar procedures. Provided you have an excellent credit record, stable service and good earnings, in that case, you find it easier to meet the requirements of a large number of loans. Some of the conditions the lenders look for

Firstly, you must be 18 years or older, to apply for a loan in Australia. Moreover, you also have to be a permanent Australian resident and must possess a minimum set required amount of net income. Even though, these conditions do not relate to each and every lender, but it is a common rule.

In Australia, it is essential for lenders to inspect your capability to pay back the finance. This means you have to be able to provide evidence that you have adequate earnings to be able to make the loan repayments, devoid of going through any undue suffering.

All candidates are judged on a case-by-case basis and your ability to pay off the loan will be determined by your individual state of affairs, particularly by how many existing liabilities you have. Apart from your wages, lenders will also consider your property to get a better picture of your financial position.

When taking into consideration, an acquisition of car finance, you must take a look at the various finance packages that are accessible through, a range of car lending organizations. One should take a look at the car finance interest rates, agreement conditions, disbursement period, duration of time before the credit gets permitted, the lender’s charges and any break fees if you make your payments at an earlier time, along with other odds and ends that frame a complete package.

Speed Boat Financing Guide

Keeping a speed boat was once restricted to those who were able to pay cash and as this sort of watercraft can be very high-priced and very few lending companies offer craft funding terms, only a few can really afford it. But as finance companies determined that most customers are good customers for loans, they added craft loans with their existing real estate and auto loans. Some even specialize on boat loans alone, dedicating their staff and funding for this purpose so finding a financing service is simple.

Talk with your bank initially to determine if they provide boat loans and if they do, inquire about the rates and the loan term but if they do not, call other banks or check the websites of various banks nationally and locally. Banks are invariably respectable lenders as they’ve secure backing and loan approval is also quick as long as you have a good credit standing. You can also look into financial services companies which are often associated to local, regional and national lenders. Their advertisements can be observed in assorted publications, and web sites committed to boating. If you are a member of a union, discover if it offers boat loans as credit unions supply the most appealing rates among the 3 sources brought up here. Union members can easily get authorized, so get hold of them and inquire about a competitive loan.

Various lenders use unique terms for the kinds of loans they put up but mostly, they’re just akin to real estate loans.

Fixed period simple interest loan (or a fixed rate loan) is the least complicated, most popular and mostly considered as most convenient loan as it holds the same monthly repayment during the entire loan term. The good thing about this is that you are able to budget your monetary resources and allocate a precise sum of money for the loan because you are aware just how much you will pay monthly.

Flexible rate loans base your monthly payment on different rate of interest indexes whereas a variable rate loan is often put up as a fixed rate loan (with a low starting rate) for a definite time period before it bases the rate in distinct variables. While you are unable to predict your monthly payment, you can gain from this sort of loan if the values suddenly get lower in the future. But since it is more complicated, you have to comprehend first how this works in order to assess if it’s really for you. Ask your lender the whole thing about an adaptable rate loan before accepting it.

Balloon repayment loan allows the borrowers pay the balance of the loan at a particular time. It is sometimes a preferred type of loan to borrowers, who acknowledge they will possess the boat for a distinct time period.

Irrespective of what lender you choose, you are guaranteed to pay a low deposit – from as little as 0 to 20 percent of the whole sum of the boat (the rate of down payment is based on the age, cost and sort of the boat). Some lenders even have zero-down offers on new boats. Since the loan runs for various years, repayment is easier, and if you are extended longer funding conditions, monthly repayments are further reduced.

The Facts About Personal Installment Loans

Whenever you need to get a little bit of money in your pocket, a personal installment loan can help you to achieve that. The reason why these are so attractive is because you can borrow a chunk of cash at one time and then pay it back over a period of time, usually in regular monthly installments. In this way, you will be able to do what is necessary to do and still be able to afford to pay it back. Of course, you can always pay it back early provided there is not a prepayment penalty. Regardless of whether you do or not, the installment will remain the same.

By getting one of these personal installment loans, you are agreeing to a contract between you and the lending service. Whatever terms they have in the contract are going to affect your ability to pay it back as well as the monthly costs to you. Keep in mind that it is very important that you do not overlook the details that are included in the contract. Things such as prepayment penalties, interest amounts and any other fees that are included will directly affect your ability to pay it back. If you don’t understand something, don’t sign the paper until you have all of your questions answered.

Another thing that you’re going to need to consider whenever you’re getting one of these loans is if your credit is in good shape or not. Believe it or not, many individuals are walking around with no idea of what their credit score actually is. You can find out easily by asking for one as every individual is entitled to a free copy of their credit report. You will be able to find out if you have anything that needs cleaned up before you actually are able to apply for one of these loans.

If you are dealing with bad credit, you may have a difficult time finding a loan that can be paid back over time. There are some companies and financial institutions, however, that are willing to loan you the money if you have sufficient collateral or can show the ability to pay the money back because of holding down a regular job. The problem with this is that you will typically pay a much higher interest rate as a result of your poor credit. Still, if you need the money this is a great option provided you can find the financing.