Business

10 Loans that Might Be Right for Your Business

Having access to working capital when your business needs it is vital; however, there are many different types of business loan programs. Knowing the pros and cons of each can give you the confidence to choose the program best-suited to the particular needs of your company.

The answers to these questions can help you choose the type of business loan that would be a good match for your organization as you evaluate the following list of pros and cons that differentiate various types of business financing:

  • How much money do you need?
  • How fast do you need it?
  • How quickly do you want to repay the amount?
  • Where will repayment proceeds come from?
  • How will you prove credit worthiness to potential lenders? (e.g., credit score, time in business, sales history, projections, collateral, etc.)

Pros and Cons of 10 Loans Might Make One Ideal for Your Business

  1. SBA Loans

First, a disclaimer: SBA loans aren’t actually loans granted by the U.S. Small Business Association, they are guarantees the SBA makes to lenders who adhere to their small business loan guidelines. In effect, the SBA acts as a co-signer, enabling small businesses that might not otherwise qualify for bank financing to get access to capital at the low rate offered by big banks.

Pros:

  • Low interest rates
  • Endorsement by the SBA improves chances of approval

Cons:

  • Stringent eligibility qualifications and oversight (use of funds)
  • Lengthy approval process
  • Low approval rates
  1. Bank Loans

Most banks have financing programs that are exclusive to business customers. They are especially attractive due to their low financing rates; however, the small business loan approval rate from big banks is very low (less than one in five are approved). Bank loans may be offered with fixed or adjustable rates, balloon payments and comparatively long repayment periods.  Banks also prefer to finance larger loans, rather than smaller amounts that many businesses are looking to borrow.

Pros:

  • Low interest rate
  • Large amounts of capital available to qualified applicants

Cons:

  • Low approval rates
  • Lengthy application and underwriting process
  • Limitations on what funds can be used for
  • Small loan amounts are not usually considered
  • Stringent qualifications (business loan may be denied due to short length of time in business, poor credit score or banking history, inability to prove projections, lack of collateral or other factors)
  1. Line of Credit

Line of credit financing may be granted by banks and platform lenders, but may also be available to your business from suppliers in the form of a supplier or vendor credit facility. Essentially, a line of credit allows your company to get access to working capital (or supplier products/services) up to a given amount. Repayment periods are usually short and the cost of financing is more expensive than bank loans.

Pros:

  • Depending on lender type, fast approval and underwriting process
  • Control the amount of financing based on need instead of a lump sum
  • Flexible – funds can usually be used at the business owner’s discretion
  • Ability to draw on the line when needed
  • Allows repeated access to capital as the line is paid down without re-applying
  • Higher approval rates from non-bank lines of credit
  • Faster repayment reduces financing fees

Cons:

  • Higher cost of financing vs. bank or SBA guaranteed loans
  • Similarly stringent qualification requirements as bank or SBA guaranteed loans
  1. Business and Merchant Cash Advances

Cash advance financing programs give business owners access to working capital in a lump sum amount that is awarded based mainly on the organization’s sales history. Like a line of credit, as repayment is made the business owner often has the ability to draw out another lump sum without having to start the application process all over again.

Pros:

  • Short application process and fast (sometimes even instant) approvals
  • Young businesses or those with low credit scores are not automatically disqualified
  • Flexible use of funds and repayment options
  • High approval rates
  • No collateral at risk
  • No UCC filing programs
  • Automated repayment makes it easy to manage

Cons:

  • Higher cost of financing compared to bank loans
  • Financing fee is fixed regardless of how quickly the amount is repaid
  1. Equipment Loans

Equipment loans (or equipment lease financing) usually refers to a financing tool whereby a lender extends working capital on your behalf, so that you can obtain equipment your business needs, and you repay the lender. Depending on which lender’s program you choose, financing rates, underwriting and approvals, qualifications and repayment options could vary widely. In addition, business cash advances, bank loans and business line of credit financing are all equivalent options for financing equipment purchases and leases, the only real differentiator being potential use of funds.

  1. Loans from Private Investors

You can negotiate private loans to fund your business as a startup or at any time during the life of your organization. The cost of financing could vary widely as could repayment terms. One factor to consider with this type of financing is whether investor loans can be called in at any time, which could put your business or some of its assets at risk.

  1. Payroll Loans

Like equipment loans, payroll loans are a financing tool that is used for a very specific purpose – ensuring that payroll can be met during a given payroll cycle. In the U.S., payroll loans are heavily regulated in part due to their high cost and strict repayment schedule.

Pros:

  • Short application and approval process
  • Ability to cover payroll costs during a temporary cash flow lull

Cons:

  • Short repayment (usually by the date of the following payroll cycle)
  • Comparatively high APR (annual percentage rate) from 15 to 30 percent
  • Additional fees accrue if repayment schedule is not met
  1. Micro Loans

Micro loans help bridge the gap for businesses that can’t meet the strict qualifications that accompany most bank loan programs, enabling young or smaller businesses with limited collateral and capital resources to get access to working capital in smaller amounts.

Pros:

  • Fewer qualification requirements than bank loans
  • Available in smaller amounts – as low as $500 to as much as $100,000

Cons:

  • Stringent oversight (depending on lender)
  • Borrowers required to receive business training (SBA microloans)
  1. Peer-to-Peer Lending

Peer-to-peer lending models come in many different forms. Some allow individuals to select which businesses and projects they want to lend to, others are overseen by executives or boards that decide which projects receive funding. Financing rates, qualifications, limitations on use, repayment schedules, application and underwriting processes and other characteristics vary widely depending on the peer-to-peer lending program.

  1. Business Credit Cards

Business credit cards provide instant access to capital which can be advantageous for business owners, especially when opportunities or capital demands come without warning. However, their comparatively high interest rates make them a better choice only when repayment can be made in full before the next billing cycle.

Pros:

  • Relatively easy to qualify
  • Instant buying power

Cons:

  • High interest fees if not paid in full each month
  • Credit limit may be too low to accommodate significant working capital needs

The type of business loan you utilize to meet your company’s financial needs can have a big impact on your organization. It’s important to understand the differences that distinguish one from another so that you can choose the one most-aligned to the unique financial needs of your company.

Money Management

Why do people borrow money?

Most people will borrow money at some point in their lives.  It is almost unavoidable.  Borrowing money to buy a house is obviously a large, long term, borrowing commitment.  Other kinds of borrowing are likely to be shorter term – on credit cards, store cards or borrowing from friends or family.    

So why do people borrow money?  People obviously borrow money because they need or want something they can’t afford out right. Some people borrow money to buy a luxury, like an expensive holiday, others borrow because of an emergency, like medical treatment or an essential household item breaking down, others borrow money in the hope that from it they can make more money – for instance to set up a new business.   

Borrowing money is not therefore always a bad thing.  Yes, it would be nice if we all had enough savings to buy what we wanted when we wanted it.   However, borrowing money simply needs to be managed by the borrower.   It is when the borrowing becomes unaffordable that it becomes undesireable. 

Mortgages are used to buy property.  Mortgages generally are large long term loans but in many countries such loans are viewed as a necessity by most people who want to own a house or other property.  Many different types of mortgage exist. Interest rates may be fixed (where the interest rate is the same for a period of time) or may be floating (which adjusts up and down depending on the market).  Generally mortgages last for 25 or 30 years.  Different types of repayment schemes are available – Commonly regular payments are made to reduce the capital and the interest over the set term. 

Credit cards are a common way people incur debt.   The cards are generally issued by bank after an application by the borrower is approved.  A credit limit will be set by the card issuer.  Cardholders then use the card to pay for goods or services or to get a cash advance.    The cardholder is then sent a statement monthly setting out how much is owed to the card issuer.  At least a minimum amount set by the card issuer must be paid by a due date.  Interest is charged on any balance which is left unpaid.  A fee may be charged if the borrower is late in making the minimum payment. 

Another form of borrowing is via a pay day loan via a lender like wonga.co.za who has recently entered the South African market.    Pay day loans are typically used for an emergency – they provide money quickly to applicants on a short term basis.   These types of loan they typically carry high rates of interest because they carry high risk to the lender are for short term borrowing and are usually available to people regardless of their credit history. This type of loan can however be a useful source of money if caught short and if you need quick access to cash. 

Whatever form of loan you are dealing with – huge or small, long term or short term, they all need to be entered into knowing what you can afford and in full knowledge of the repayment terms.   Sometimes taking out a loan can be very worthwhile are and can actually improve a borrower’s quality of life. 

Insurance

7 Reasons Why You Need Renters’ Insurance

Author Bio: This article is written by Charles Henry of http://www.rentersinsurance.net/

If you are entering into a new property rental lease, or perhaps have been renting for a while without insurance, you may think that getting a renters’ insurance policy is unnecessary for you, or at least a very low financial priority. Perhaps you don’t consider your possessions to be all that valuable, and aren’t sure it is worth paying a monthly premium just in case anything happens to them. However, renters’ insurance can be highly beneficial to just about all people renting houses or apartments, and doesn’t just cover the contents of your home. Here we take a look at seven reasons why you need renters’ insurance: 

1 – Replacing even your essentials after an emergency can run to a lot of money 

While you may not think you have anything especially valuable, could you afford to buy all new furniture, a new computer, a new TV, new kitchenware and a new wardrobe all at once? While you may not own anything all that expensive on its own, if an emergency wiped out all of your stuff, leaving you with nothing, in an uninsured situation that is what you would be looking at. 

2 – Insurance can cover even minor losses 

Insurance doesn’t just have to come into play if you lose a lot of the things you own in a major incident like a fire or flood – it can also help with more minor losses. Say a problem causes your freezer to stop working and all of the food you had stored in there became unusable – certain policies will cover this. 

3 – Most people have at least a few valuables 

How a valuable is defined is different for everybody. Sure, you may not have a bunch of diamond tiaras or priceless works of art, but in line with your standard of living, something like a games console, a designer purse or even your widescreen TV can be a valuable to you, and you will definitely want to know it is protected. 

4 – It can protect you from unscrupulous landlords 

If your landlord claims damage has been done to the property, and tries to take this out of your security deposit, your insurance may protect you. Accidents can happen and wear and tear on the property and its inventory are inevitable, but if you are insured you don’t need to worry about these things costing you dearly when you move out. 

5 – It can cover your liability if anything happens to a third party on the premises 

In certain legal situations, you may be considered liable if something happens to somebody while they are on the premises you are renting. As you might imagine, this can end up being extremely expensive, as you may have to pay compensation including hospital bills and more. Renters’ insurance will cover your liability. 

6 – It can cover your belongings even when they aren’t in your home 

Some policies will cover your belongings even when they aren’t at the insured address. This means that if you get mugged on the street, or items belonging to you get damaged while traveling, for example, you can still claim on your insurance. 

7 – If you need to stay in a hotel because your home is uninhabitable, your insurer will pay 

Another thing your insurance will cover is accommodation for you if your home becomes uninhabitable, for example after an emergency, or because of other problems with the building. Even if you just need somewhere to stay for a few days for building fumigation, this can end up being an expensive, unplanned cost, so this is one area where insurance can save you a lot of money. 

Home Ownership

Six Tips To Saving Money In Every Aspect Of Your Home

Home, it’s where the heart is and it’s where you spend a lot of time. You want your home to be a relaxing and happy place where you can come home from work and put your feet up.

Instead, for a lot of people, home is where you come back from work to find bills you need to pay and messes you need to clean up. Pretty much, you come home from work to work.

While bills can be a pain, there are many things you can do in and around your home to help you save some money and some time. From organization projects to ways to cut the bills back, here are some things you may want to try in your own home to make life just a little more tolerable.

Start With Organizing Your Bills

There’s more to planning a budget than just writing down what you owe and what you have coming in. You also need to organize your bills. Sometimes you have extra bills that aren’t always on the budget plan, like that magazine subscription you just had to have.

Start off by making sure you have a place to keep your bills, and that it is someplace visible. You don’t want them to be out of sight, out of mind. On top of that, always make sure you open all of your bills.

One things that may help is to set up automatic payments, and then just keep a list of what comes out when so you make sure you don’t overdraft your account. Not only does this guarantee bills are always paid on time, it cuts down on waste in your home by going paperless.

Once your bills are all organized and you’ve done the whole budgeting thing everyone does each month, you will be able to see where you could, or should, cut down on expenses.

Cutting Down Your Monthly Expenses

Once you know what bills your have coming and compare that to your income, you can decide what things need to go and what needs to stay. Obviously everyone needs food, shelter, heat and water, but are there ways you can save on those things?

To save money on the electric bill it helps to be more energy efficient. That doesn’t just mean changing your light bulbs though. look for energy efficient appliances when it’s time to invest in new ones. Also, don’t leave things plugged in all the time if you are not using them. They’ll continue to draw energy.

Saving money on the heating bill can be as easy as keeping the heat turned down and bundling up a little bit more when it’s chilly out. You can also have your insulation checked. Good insulation helps hold heat in your home allowing you to keep the thermostat lower.

It’s a similar thing with air conditioning. Only run it when you need to, like when the sun is at it’s highest. Have windows open on cooler days instead. Keep shades closed so the sun doesn’t heat up rooms. And, of course, cook on the grill often to save from heating the stove up.

Saving On Entertainment In Home

If you have a high speed internet service, you may be able to cut out cable all together. Learn more here about some of the high speed internet services that are available. With a good service you can have Netflix and HuluPlus to watch your favorite TV shows and movies.

Look for services that don’t have any hidden costs for using too much bandwidth, which is something you’ll do using things like Netflix. But you’ll go from $30 or more for cable packages to under ten dollars a month for a streaming service.

In order to stream without watching on your laptop or home computer, you will want to invest in a WiFi ready BluRay player. But with that you can also save money on entertainment by purchasing DVDs and BluRay discs when you see a good sale, instead of spending theater prices.

It’s pretty easy to save money on bills if you just take some time to do the math. You may still have a messy house to clean when you come home from work, but at least you’ll have less bills to worry about and more time for fun with your family.

Employment

10 Best Promising Careers in Finance Sector

A career in finance isn’t all about being a “money man”. However, there exists a very awry notion about finance professionals. An academic degree is where it all begins, followed by exploring accessible professional alternatives matching the stupendous demands of the new age business.

The sector is multifarious and multifaceted, enabling an assortment of opportunities to individuals with diverse skill sets and vision of making it big in life. Even couple of decades back careers like “Budget Administrator”, “Financial Advisor”, “Equity Specialists” existed only on books. However with the changing demand pattern of the financial geographies, the young wave of professionals have realized the potentials of the Finance sector and quite gleefully greeted this Wind of Change!

If you are an aspiring young professional seeking a promising career in the Finance sector you must be reading this article, as today we present the 10 Best Promising Careers in Finance Sector

1.     Financial Controller

Any company’s financial planning and debt financing objectives are best represented by a financial controller. Organizing the budget management prospects in an extensive manner is another crucial task handled in this context. Advanced accounting methods are chosen to implement latest industry practices to obtain maximum profits in a consistent manner. Realizing such a career is best possible by pursuing a suitable course at bryantstratton.edu

2.     Tax Manager

Reporting and planning taxes on a regular basis is the major objective considered by a tax manager. The process of filing tax returns of the entire firm is undertaken without fail by such a dedicated professional. Implementing the local as well as international tax laws is best achieved by such professionals.

3.     Senior Accountant

Taking care of an organization’s liabilities in detail is creditably considered by a senior accountant effectively. The biggest responsibility shouldered by an accountant in the organization is that of examining latest financial trends on a regular basis. Realizing a glorious future in the financial sector is best possible at Bryantstratton with this career option.

4.     Financial Specialist

Investments have become completely logical with it requiring expert thinking entity behind regarding every financial decision taken. It is necessary to be a financial specialist in order to understand better about the share markets and their performances in a comprehensive manner.

5.     Valuation Analyst

Comprehensive business valuation needs to be performed on a regular basis to track the assets and liabilities of the concerned firm. The profession demands more with the concerned professional having maximum knowledge about various aspects such as accounting and taxing in an integrated manner.

6.     Investment Banker

Choosing the best performing firms on a regular basis with a strategic view is something that is best possible for those professionals in investment banking. Making huge profits is best possible in case the predictions go right for them. In contrast, severe losses are accrued if the decisions taken are not fruitful. Several of the students who pursued a course through Bryantstratton are now in responsible positions.

7.     Portfolio Manager

Dealing with the uncertainties of stock market in an extensive manner is the task cutover for a portfolio manager. Such a responsible professional is expected to manage multiple portfolios in a flexible manner with the sole aim of driving the concerned firm towards the path of profit in an assured way.

8.     Trading Analyst

Deciding about all those channels that are known to generate potential income on a strategic basis is the biggest objective of any trading analyst. Maximum understanding about the trading of stocks irrespective of the market condition has to be maintained so that no financial setbacks are experienced for sure. Generating maximum profits is best possible in this regard for you in an ultimate manner.

9.     Chief Financial Officer

Running a company towards a profitable path is what a Chief Financial Officer aims at. Multiple objectives have to be considered in this regard by any CFO in order to realize the best results in an effective manner. Maximum care has to be taken in this regard as the decision taken by a CFO is final.

10.   Financial Consultant

Starting a consultancy offering valuable tips and support to business owners who are willing forward to expand their firms to realize best growth irrespective of market conditions is very much beneficial. A glorious career to the level of an entrepreneur could be expected with this career choice.

Several other career options are available at Bryantstratton. for the exclusive needs of those planning to make it big in the finance domain. Developing skills and maintaining standards are some of the additional benefits that could be realized through the excellent services and features offered at the website in an exclusive manner. Seeking best career guidance too is easily possible with advanced options included for instant reference.