How to Finance a Business Purchase in Today’s Economy

Finance a Business Purchase in Today's Economy

You’ve come to the right place if you want to understand how to finance a business. Getting your business financed can be a piece of cake if you get a complete evaluation on all potential lenders, choose the right loan for you and discover how to structure your financing. Stay tuned to learn how you can make getting your business financed a breeze.

Our current economic situation leaves many people reluctant to spend any money. Many banks are hesitant to lend money in fear they will lose their investment or gain a business in foreclosure. Protect yourself and your business by requesting a background check before you decide on one particular lender. With many banks dropping like flies from day to day, it is important that you get the protection you need for your investment. Once you’ve mastered securing a stable and reliable lender for your new business, finding the right loan for you will be the icing on the cake.

Once I’ve made a list and checked it thoroughly to find a good lender, then what? How do I know what type of loan would be best for me and my business? Your loan should fit you like a well fitted glove. It’s important to choose a loan that won’t cause you to “live beyond your means”, your business will only last if you can afford it. Choosing the right loan is important, but a proper financing structure is the key part to the purchasing process.

I found the right lender and a loan that fits my requirements, what else do I need? What else would I need to do to make my business purchase? It is important to fully analyze your finances. You need to make sure that your finances are structured for success now and in the future. Understand that the research and planning you put in now will create the foundation for success for your business.

Did you realize all the thought and planning that goes into purchasing a business in today’s economy? Getting your business financed can be a piece of cake if you get a complete evaluation on all potential lenders, choose the right loan for you, and discover how to structure your financing. Now show the world that you aren’t going to let the current economic recession crush your dreams of owning your own business today.

 

How Do Divorcees Safeguard Their Finances?

Divorcees Safeguard

A divorce, in most cases, is brought about by marital conflicts and, despite the fact that it is the legal way of parting ways, it rarely ends in a friendly manner. It is never easy for the divorcees since it tends to create a painful semi-permanent scar due to the emotional trauma that is suffered. It also causes quite a huge financial impact especially to the economically disadvantaged partner. In most cases, it is the woman who has to sacrifice their careers to tend the family as a wife and mother. Even when undergoing tough emotional strains and stress, it is imperative for one to take financial matters seriously during this process of separation. With the right strategies in place, one can be able to achieve a smooth deal that ensures financial security afterwards.

To begin with, it is very important for one to hire a good attorney to represent them. This does not call for the most expensive ones but those who will have and keep the matter to their best interest. A good attorney should produce documents that cover all the necessary aspects such as the custody of the children, their maintenance or support, and possession of properties and assets. The attorney should be well vast with matters concerning family law and must be able to handle and take matters in the speed that is required. The more the case drags, the higher the costs of settling it and the nastier it gets.

Also, one requires to have a bank account in his/her own name for the sake of settling the normal basic expenses. The courts never bar one from operating such marital funds thus this provides a good support for any short notices.

One may need some credit cards under their name. It is usually advised to get this credit card before things get out of hand since after a divorce, it may turn to be very difficult to get one. Getting such as card is usually very easy for those whom are still married. This card helps one to overcome the stress caused by joint accounts since one partner may opt to close it down after a divorce leaving the other party in a financial crisis.

Having a record for the financial documentation makes the process of solving financial matters easy during a divorce. It might seem unnecessary to have the documents such as financial statements when in marriage but the ex may make it difficult to acquire these papers after separation and it is not be easy to have them once divorced. Some of the documents may, out of malice, disappear.

One must learn and cope up with an adjusted and more realistic budget. It is very important for one to assess and find out how much it will cost them and the children to live on only the available resources. The style one was accustomed to may change drastically.

Lastly, it is critical for one to focus on the future other than cry over the past. Life has to go on and if one had never worked before, they need to focus on what they can do and go for it. The child support or alimony one might receive out of a divorce will quite often not be enough. The healing process calls for starting a new life and realizing new goals or previously shunned potentials.

Bad Credit Affects More Than Just Finances

Bad Credit Affects More Than Just Finances

Bad Credit Affects More Than Just Finances – Most people realize that having bad credit can create a variety of financial problems. If you have poor credit, it is difficult to be approved for any new credit accounts. Having bad credit can result in less than ideal loan terms. You might very well struggle for approval on a loan for an automobile or a new house if you have poor credit. Unfortunately, a bad credit history can reach farther than your pocketbook.

If you are in the market for auto insurance, a poor credit rating can make it difficult for you to find affordable insurance. Many insurance companies charge higher premiums for people with poor credit. This might sound like a financial issue, but it is much more than that. If you cannot find affordable car insurance, you might not be able to drive! This might not be so bad if you live in an area with public transportation but does create problems if you live where there is no or minimal public transportation.

You probably do not give your credit history much thought when you are applying for a job, but you should. A poor credit history and credit score could prevent you from being hired from a job. There are employers that will request a credit check if they are giving consideration to hiring you. If you have poor credit, the employer might believe that you are not responsible enough for the job. They will probably overlook you for sure if you will be handling finances in your job because they believe you cannot handle your own finances. A poor credit score is not something to take lightly if you are hunting for a new job.

A poor credit history can make if difficult for you to rent a home. Most landlords will request permission to request a background check. If you have a poor credit history, they are not likely to approve you as a tenant. If you have no option other than renting an apartment or house, you could face an uphill battle if you have bad credit. If you are approved to rent a property, it will probably not live up to the same level of quality as a house or apartment you could have rented if you had good credit.

Having bad credit can affect the way you feel about yourself. You might feel as if you are failing your family or yourself if you have not been able to establish good credit. You might even feel embarrassed by your credit problems. This makes it difficult to stay positive and motivated enough to improve your credit rating.

A poor credit history can affect you if you have children who are ready to go to college. Most students do not receive enough scholarships or financial aid to cover their entire tuition and expenses. They might look to you to help them secure loans for college. If you have poor credit, this might not be possible.

Parents often like to help their children when they buy their first new car or their first home. Many parents do cosign for their adult children who need a significant loan. This is something that you will not be able to do if you have very poor credit when they need your help.

It is important to work to build good credit or to rebuild your credit if it is currently poor. Poor credit will have a negative impact on many aspects of your life. It will affect far more than just your pocketbook. Start making responsible financial choices today.

Eliminate Debt by Going on a Spending Fast

Eliminate Debt by Going on a Spending Fast

Consumer debt is at a all-time high. Families are living above their means and using credit to cover the expenses they can not afford. If you are reading this article, I will assume you are at a point where you are tired of debt running your life and ready to eliminate it.

Fasting is traditionally known as a time without food. People in the Bible used a Fast as a time with no food to seek direction through prayer from God. A spending fast can help your family seek direction on your finances by eliminating your current spending habits.

Here are 5 steps to complete a spending or financial fast to eliminate debt

  1. Pick an upcoming month to do the spending fast. Make sure you pick a month that you are able to complete it. Do not pick a month that you know you are going to have some issues with. If you make an exception for one item or event it will be too easy for you to slip off of the spending fast.
  2. Make a list of the expenditures that you truly need for a month and make a vow to not spend over this amount. For example you need gas for your car to get back and forth to work but you do not need gas for your car to travel for entertainment or other events. You need groceries but try to make a vow to only spend a certain amount per week. Attempt to make as many meals as you can out of your pantry. By separating your needs from wants before the month starts you have set the rules and groundwork for your spending fast.
  3. During your month long financial fast make some tough decisions. If a friend calls and asks you to go out to dinner, explain to them what you are doing and that you are attempting eliminate some debt. Ask the friends to come over after dinner to play cards. Cutting entertainment like going out to eat, movies, and even cable can save you lots of money that can be used at the end of the month to pay debt. If something in your house breaks that is not an emergency, try to find a solution to fixing it that is inexpensive. Be creative, look on line for some solutions to different household problems.
  4. Keep a journal. Write down those things that you did not miss and those that you did during the month. Maybe you did not miss going out to lunch at work but did miss taking your kids to a movie. These journals and note entries can be used later to reset your budget. If your spending fast can identify some areas that you spend money carelessly with no real gain then it will prove to be a life changing event.
  5. Track your savings each week and write a check to pay a debt at the end of each week. By using your surplus to eliminate debt weekly you will encourage yourself to continue and get the money out of your checkbook to not be tempted to spend more when the spending fast is completed.

A spending fast to eliminate debt can help a family to pay down debt during their spending fast month and also encourage new habits to be formed that can help them permanently change how they save money. A website with Christian roots that you can sign up for a 30 day spending fast is www.financialfast.com This Christian ministry will pray for you during the fast and send you some encouraging materials to help you along the way.

Good luck on your plans to eliminate debt and I hope a spending fast can get you their faster!

How to Use a Commercial Factoring Company to Finance a Business

Finance a Business

Factoring is designed to increase cash flow when funds are limited and accounts receivable are high. It is short-term financing to solve short-term cash flow bottlenecks. The cash-poor company sells its accounts receivable at a discount to a commercial finance company known as a factor. Cash is made available to the entrepreneur as soon as proof of shipment is provided or on the average due date of the invoice. Most factoring arrangements are made for one year.

Factors make their money by acquiring a company’s invoices and collecting on them, charging the business a fee. Unlike banks, factors buy, pay for, and own the receivables outright. If your creditors don’t pay, the factor may incur a loss. Some factors require that the entrepreneur establish a reserve for bad debt of approximately 5% of the account. If the account is not collected within 120 days, the factor will draw against the reserve. If the receivables eventually are collected, the factor’s return on investment exceeds that of conventional lenders.

Many business owners use factoring when their banker turns down a loan request that they had tried to guarantee with their accounts receivable as collateral. Under factoring, accounts receivable are not used as collateral against a loan but instead are sold directly, at a discounted value, to a factoring company. For example, if the factoring company uses a one-time charge and discounts 6%, then for every $1,000 in receivables, the seller receives $940.

Some factors discount according to a schedule, paying a smaller percentage up front and then paying an additional percentage depending on whether the receivables are collected within 30, 60, or 90 days.

The factor takes over the entire collection procedure, including mailing the invoices and doing the bookkeeping. Each of your customers is notified that the account is owned by and payable to the factor.

If you are a new business and your accounts receivable are evaluated as marginal credit risks, you may not be able to find a factor that will accept your accounts receivable. Let’s face it: although they take greater risks and are more liberal lenders than commercial banks, factors need to be assured that your customers will pay their bills. They will execute substantial credit checks on each debtor and carefully analyze the quality and value of the invoice before buying it; they look to the strengtMof the receivables and creditworthiness of the invoices that you are selling them. Factors will also establish credit limits for each customer.

Factoring is not the cheapest way to obtain money, but it does quickly turn receivables into cash. The advantages of factoring are receiving a cash injection quickly, paying bills in a more timely manner, obtaining more credit, and fostering better growth than traditional borrowing. Also, the fee is an expense and offsets taxable income. Essentially, the entrepreneur is buying insurance against bad debt.

The chief disadvantage of factoring is the high cost of money relative to traditional borrowing. Also, to many entrepreneurs, factors receive outrageously high returns. A business concerned with cash flow but not with collection might want to pursue the less costly route of using accounts receivable as collateral for a commercial bank loan.

Overall, factoring can be compared with using a credit card for your business. Factors work best with businesses that have cash flow problems because of long delays between making and selling goods and then collecting cash. Start-up ventures, emerging businesses, and service companies are prime candidates for factoring. For recommendations and references about which factoring companies to use, talk to your trade associations, to members of the infrastructure, and to other entrepreneurs in your industry.

 

Instant Loans – Funds by Applying Online and Gaining Quick Sanction

Funds by Applying Online

When you need to go to office everyday, you have very little time for other things in your life. This thing may also happen when you are facing the problem of credit scarcity. What can be done in such a situation? Such a person can apply for instant loans without any apprehensions. With the help of this fiscal service, the borrower would get hold of funds by applying online and would be gaining quick sanction.

The mode of financial transfer that is followed here is electronic wiring, this would make the documentation completely nil. One would not waste his time in any undesirable filling and faxing of papers in this process of money lending.

If you want to apply for instant loans, you can put into use the free of cost and no obligation application form that would be given on the website of the money lenders. You should fill this form with your authentic personal information. The borrower would get a rapid approval, as and when the process of verification would be over. In as quick as 24 hours, the money would get transferred into your bank account.

Depending on your settlement ability as well as monetary ability, you can grab small cash advance that falls in the range of £80 to £1500. You have to pay this credit aid back in the comfortable repayment tenure of 1 to 30 days. One can do a number tasks that hold importance for him. You can pay the credit card installments, can pay the household and utility bills, can get small house modifications done, can send the car for a repair job and so on.

There is no need for you to give credit confirmation. IVA, arrears, insolvency, bankruptcy, foreclosures, CCJs and so on are no-issues at all for the lenders.

Student Guide: Managing your Loans and Finances

Managing your Student Finances

Going to university (or college) can be a liberating experience. No parents to tell you when to get up in the morning, or teachers to give you detention when you don’t get your work in on time. However, it’s easy to fall into this hedonistic lifestyle of partying all night and sleeping all day and spending all your money in the process.

You wouldn’t believe how many institutions will be falling over backwards to loan you as much money as your beer belly desires. The banks will throw overdrafts at you and there are more loans and grants than you can shake a stick at.

Be warned however, although it seems so at the time, this is not free money, and you will one day have to pay it all back. So with that in mind, here are a few tips to help you keep those finances in order.

The Banks

When you head to the fresher’s fair, you find every bank under the sun, advertising their ‘new’ amazing student offer; a free toaster, puke bucket and young person’s bus pass for every new account and an overdraft that will pay for your new Nintendo Wii AS WELL AS 204 nights on the lash.

At this stage, the banks may seem all sweetness and honey, but the moment you are no longer enrolled they’ll come after you gnashing their teeth like hungry piranhas. Therefore it’s best, if you can possibly manage it, to steer clear of your overdraft. Of course you might use a few pennies in times of starvation, but look at more as a last measure than a luxurious freebie.

Student Loans

The ludicrous bureaucracy that accompanies the process of applying for your student loan is tedious and tear-your-hair-out irritating, but unless your parents bathe in rivers of gold, your loan is likely to be essential. The Student Loans Company website is where the magic happens, and it’s worth taking the time to familiarize yourself with the site before sending off your form as the slightest mistake could mean an extra month of living on leftovers.

The loan is low interest and you don’t have to think about paying it back until you’re earning at least £15,000 per year. Having said that, the monthly repayments are noticeable so it’s worth saving as much as you can. If you do take a student loan, which the vast majority of students will, then you’ll find yourself paying for it later. Loans are means-tested, but you can expect £1,200 three times per year (barely enough to cover the rent).

Student Grants

Brilliant. If you happen to be over 21 our generous government will afford you and extra £2,500 or so each year which you DON’T have to pay back. This grant is essential if you don’t want to spend every waking minute outside of University working in Uncle Joe’s Kebab Parlour, however, although it may sound like a lot of money it really doesn’t go far. It is just about possible to live off your loan and grant, but finding a job is an excellent way of subsidising your partying habit.

Bursaries

Most University’s offer means tested bursaries to help students who come from low income families. They’re quite sneaky about these and you’re unlikely to hear about them until late on in your first year, so as soon as you arrive at Uni, it’s worth popping down to the main office, or the Student’s Union and asking someone the best way to apply for bursaries. Bursaries can mean an extra £1,200 each year.

Most students are likely to spend their University lives without two pennies to rub together, but they’ll have a great time nevertheless. The problem for students, in terms of their finances, is lack of foresight. With just a small amount of planning, perhaps a part time job, and researching the right institutions, students are likely to enter the big bad world in much better financial health.

Student Finances Need Not Be a Minefield

Students are increasingly finding it expensive to get a college or university education with increased tuition fees and living expenses. Thinking about student financing can also be time consuming and requiring extensive research to get the best deal and finance package to suit the student’s needs. For those students who feel they can put off thinking about financing for “later,” they may just find they make decisions which can be costly for them.

Being a student can be a very memorable period of an individual’s life, but it can also be a time when the student is constantly thinking about student financing and mounting student loan debts. A student need not be broke all the time, and carefree student days also need not be relegated to history. Instead, with a bit of financial planning, a student can have a good time without worrying about incurring large student debt.

There are institutions that are ready to help a student look at his/her financial requirements and compile an appropriate finance plan. Students who are fortunate to have financial support from parents could also benefit from obtaining additional information. However, for the majority of students heading off to college and university, the issue of student finance and student loans becomes a looming reality.

Student Debt

Going to college or university may well be getting more expensive, but it is also becoming a requisite for many students. Many believe that getting a degree or vocational qualifications will enhance their prospects in a competitive and increasingly global job market. However, this desire to undertake studies comes at a price which increases each academic year.

According to Changeboard, more than 50% of all graduates in the USA will have student loans totaling $20,000 by the time they graduate. This statistic is reaffirmed by The National Centre for Education Statistics, who reports that two thirds of all College students have student loans after graduation with an average of $19,237. Additionally, a quarter of undergraduates borrow more than $25,000 and one tenth borrow more than $35,000

In the UK, the picture is reflective of the changing times in the UK education system. According to university research organisation Push, the average student graduating in July 2017 will find themselves with nearly £22,000 in debt. Many will be paying student loans well into their 30s and in some cases, even into their 40s.

Planning student financing can help to manage student debt better. Many students are now coming out of colleges and universities with increased levels of debt and are starting their working lives saddled with debt they incurred as students.

For many students, working part time and studying full time has become the norm, despite protestations from professors and other teaching staff. Teaching staff believe that holding down working commitments impacts the grades and overall learning experience for students.

Sources for Student Funding

The following highlights potential sources of funding for students

  • Private student loans (account for nearly 25% of all student loans in the USA)
  • Federal Student loans
  • College scholarships
  • Parents and friends
  • Personal savings
  • Working during studies
  • Charities
  • Religious institutions
  • Bursaries
  • Employer sponsorship for vocational and further degree qualifications
  • Global institutions like the Soros Foundation, World Health Organisation, AMIDEAST, and the United Nations

Where scholarships are concerned, the student may find that s/he may need to submit and an essay or other written pieces of work. Each institution awarding a scholarship will have the necessary details and background and qualifying requirements.

The onus falls upon the student to get the best student financing information and deals. Therefore, planning and preparation is imperative, even though the student may be tempted to leave this to the last minute. The downside of leaving financial planning for studies to the last minute will mean decisions will be made in haste and may not serve the student in the long run.

College Loans

Further information for students in the USA and UK can be found below:

  • Student Federal Loans
  • The Student Aid website also contains a checklist for prospective students and their parents
  • Direct Consolidation Loans

Information on student financing in the UK can be found from the following sources:

  • Student Loans Company
  • Direct Gov

There are many financial companies offering cheap student loans, but as a word of caution, students pursuing this option may be best advised to read the small print before signing on the dotted line.

As the student population continues to explode globally, so will the number of financial and non financial, reputable and non reputable companies offering an array of financial services and products to the student market. A student who engages in financial planning, research and preparation will be the one who succeeds in the long run.

Student Finance England Loan Deadlines 2016/17: When Students Should Apply for Non-Means Tested & Income Based Loans

Students planning to start or resume full-time courses at colleges and universities for the 2016/11 academic year may find it useful to apply for Student Finance England loans earlier rather than later. Those that hit government deadlines will stand a far better chance of being paid their loan on time for the start of term. What are the deadlines for student finance this year?

Student Finance England Deadlines for Non-Means Tested Loan Applications

If a student is making an application for finance that doesn’t need to be means tested then they are being asked to apply by the 23rd of April 2016. These applications are based on circumstances where the parental/household income will not need to be checked during the loans process.

Student Loans Applications That Will be Based on Income Assessment

If a student is making an application that will be means tested then their application date is the 21st of May 2016. The finance given here may be based on the income of the household.

What do the Student Finance Application Deadlines Mean?

The recommended deadlines are based on giving a better chance that a loan will be paid in time for the start of the student’s academic year. There may be, as was evidenced in recent years, no guarantee that finance will be processed on time but hitting the deadline may give the best chance of this happening. Applying later may delay the payment process.

Should Student Loan Applications be Made Through Student Finance England, Student Finance Direct or DirectGov?

Online applications are now initially made via the government’s DirectGov website. Students can also download a paper-based application from the site’s student areas if they prefer not to apply via the Internet.

The official name of the UK’s student loans company has now changed from Student Finance Direct to Student Finance England. The base organisation remains the same and any student that has applied for a loan previously can use the same details for new applications.

What if the Student Hasn’t Been Offered a Place Yet?

The DirectGov website recommends that students try to meet the application deadlines even if they haven’t got a firm offer of a university or college place yet. Students can simply enter their first choice on the form and change it later if necessary.

Using a Student Finance Calculator May be Useful

Those that are unsure how much finance they may be qualified to be given can use the DirectGov student finance calculator. This gives an estimate (but not a guarantee) of options including student loans, grants, scholarships and bursaries. This may be worth doing to help assess income before starting college.

General Money Management Tips for Students

Those about to leave home to study for the first time may need to set up financial accounts and to think about budgeting their money. Choosing the best student bank accounts and other financial products such as credit cards can help with this process. Thinking about how they will manage their money at university may also give them a good start.

Top Reasons Why Owners are Refusing Seller-Financed Mortgages

Why would an owner refuse any offer in today’s market when homes are on the market for months or years at a time? Why would the term seller-financed mortgage cause fear and hardship to a seller faced with losing his home? The top reasons owners are refusing seller-financed mortgages are alienation clauses, common sense, insurance policy complications and fear of appraisal problems.

Word of mouth or previous experience will show many sellers the problems involved in handling loans or mortgages on their own. Seller financed mortgages or land contracts may cause more harm than good to sellers and buyers alike.

The Difference Between Land Contracts and Seller Financing

Land contracts and seller financing are the same thing. Years ago the phrase “land contract” was established to help buyers qualify for a home loan easily by allowing the seller to be the bank or mortgage company. This occurred when interest rates were sky high and qualifying for a loan was near impossible for many homeowners.

Problems arose when there was poor understanding of how to handle a land contract properly. Many sellers were sued by the banks and by the purchaser of the property. At first the whole concept of land contracts seemed to be an easy answer to helping both buyers and sellers in selling and buying homes.

When deals went sour, the use of “land contracts” was eliminated and more and more turned to banks that had become easier to deal with when applying for a loan. In the 1990’s again loans were tight and banks were turning away qualified buyers. So to rectify this problem, the new term “seller financed mortgages” was adopted with smarter escrow companies and experienced Realtors.

What caused such huge problems in earlier years with the “land contracts” had now been rectified with smarter Realtors who realized where their predecessors went wrong. They now knew how to protect their clients and covered all the side effects of such dealings, so they thought.

What is Alienation and Due on Sale Clause?

The top reason sellers are refusing offers for seller financed mortgages is due to the “alienation or due on sale clause” in their mortgage contracts. This clause states that if the owner or seller of the property ever transfers the home without the bank’s authorization, the bank has the right to call the entire note due and payable.

This is also the main reason “land contracts” failed years ago. Sellers and buyers had no knowledge of such a contingency and thus allowed the buyers to call the bank to check on the mortgage being current. The banks then realized the property had been transferred and realized they were losing lots of money. At this point the new clause was added to mortgage contracts called “alienation or due on sale clause.”

Insurance Policies Must Remain in Seller’s Name

The insurance policy must remain in the seller’s name due to the fact that all new policies must go to the mortgage company. Once the mortgage company received a new policy with the new buyer’s name on, the bank called the loan due and exercised their right in the “due on sale clause.”

Once the insurance policy stayed in the seller’s name, the owner or seller must accept responsibility for all losses and claims on the property. The owner or seller must claim that he was present when the destruction or accident occurred, thus causing further liability.

Common Sense in Offers for Seller Financing

Another reason for owners turning down a seller financing deal is pure common sense. If the buyer is offering a large down payment and large monthly payments, then why can’t the buyer qualify for a conventional type loan? Poor credit and high debts may cause the buyer to default on any type mortgage. It is imperative that the seller screen the buyer thoroughly before accepting any type of seller financing.

A $10,000 down payment will not cover legal fees to evict the tenant from the home. Even if escrow papers stipulate eviction procedures after 30 days, removal of the buyer may be very difficult. Having proper representation and knowledge of current mortgage rates may save future headaches in this type of transaction.

Fear of Appraisal Values in the Future

With prices falling and banks refusing more and more loans, it is quite possible that appraisals will not match sales prices next year or five years from now. The fear that the appraisal will not come in may cause many owners to refuse such offers which include seller financing as a contingency.

In seller financing contracts the seller or owner agrees to sell the home to the buyer for ever and never require refinancing of the property. The buyer however has the right to refinance at any given time. Should the buyer decide to refinance on his own to avoid a higher interest rate and payment, he may run into appraisal problems.