By Stan Prokop
Businesses need to in essence estimate the funds they will need ' over time'. We say over time because those funds will cover different periods in the company's growth.
Broadly speaking we can call this 'financial planning ', however the whole process is somewhat more complicated due to the external financial and economic environment.
Naturally after a firm develops some solid estimates around capital and growth needs the question then becomes 'How much of this funding should be borrowed via debt?'
Contrary to what management and financial mangers understand, debt is actually the cheapest for of long term financing, supplemented of course by the fact that the interest on the debt is tax deductible. So should the business owner or financial
executive take on all that debt? Clearly too much debt will restrict and potentially damage the firm, and perhaps even exposing the company to failure. Having said all that the business owner still then has a legitimate right to ask "What is the appropriate amount of debt for my company then?"
The answer is that a company has to plan towards finding a target debt ratio, or capacity that reflects their business and industry, as well as the concerns of any of the owners, re: guarantees, etc.
The essence of the business owner's analysis is the ability to understand the company cash flows which will pay down, or service that debt. Most business owners don't do enough planning in this area, and their analysis needs to be much more formalized.
Company owners quickly understand that because there is a limit to how much debt a company can take on, there has potentially to be an influx of owner or equity capital. Business owners and equity investors at that time have to have a strong sense of the value of the company both currently and on a longer term basis.
Business owners must be totally focused in the current environment of understanding the current realities of loan and debt negotiation. It is here an experienced advisor can become invaluable. Quality of the lending partner becomes key here. Most business owners eventually realize that all the banks have, give or take the same rates. They don't have the same people though! Therefore quality of service and commitment from the lender becomes ultra important.
In summary, business owners need to constantly assess their needs for debt or equity capital. Those needs are immediate, intermediate, or over the longer term. Cash flow and owner philosophy on borrowing will dictate how much capital, and as we have seen, from where it comes. Owners that plan and understand the borrowing market will be more successful than those that do not.
Friday, January 15, 2010
Financing Your Company
Vital Information on Line of Credit Home Loans
By Ignacio A. Sapalo Jr.
There are many different types of home loans to choose from, and one of them is a line of credit loan. These loans are also known as a revolving line of credit loan and have become popular because of their flexibility and the features that they include.
There are advantages and disadvantages to this type of loan. Some of the advantages are that you can access your money at anytime and the money is not locked down in anyway. Repayments may be made when you want to, and you are free to draw from your letter of credit funds however and whenever you want.
Usually these credit limit amounts are larger than what credit cards offer, and have interest rates which are lower than credit cards. You can minimize interest by using all your income to pay your loan and can consolidate debts in this type of loan.
The problem with this type of loan is that one would need discipline and knowing your financial limits. For some the discipline required would be hard to do, especially if they have no control over their spending habits, thus making them prone to missed repayments. Furthermore the interest rate on this type of loan is variable and may increase to very high amounts.
Despite its flexibility the most important element a person should have when wanting to get this form of loan is self control. Overdrawing and going beyond your limit is very easily made with this type of loan, but if you have enough discipline and self control the flexibility this loan offers may be right for you.
For more information on getting a line of credit home loan visit the experts in the field so they can provide you with advice and details on how to get this home loan, and help you to decide if this type of loan is right.
401K Loan - Is it the Right Choice?
By Beth Lyons
If you are like most Americans, you know at least one friend who has lost their job in this tough economic time. Even people who are lucky enough to still be working have suffered pay cuts, layoffs and pay freezes. So when financial advisers tell us to get rid of debt, how do we do it? Many people think of their 401k. The money is
sitting there and under most 401k plans, the worker can borrow against the account. It is an option but is it the right option? Let us explore.
The 401k Rules For a Loan
Most 401k plans have a provision for allowing a loan against your retirement account. The rules are fairly straightforward (at least in most plans). You can
borrow up to 50% of your vested account balance. Or, if you have that much, $50,000, whichever is less. For payback, you usually have a maximum of five years to repay the loan, unless you are borrowing for a first home, then the government allows a longer payback.
On the Plus Side
There appear to be some advantages to taking a loan against your 401k. First, for many people is that there is no credit check on the loan. Even if you have good credit, you don't necessarily want another inquiry showing up on your report. That is understandable. Also, the interest rate is usually low. In fact, it might be the lowest interest rate you have (or would have). So taking a a $5,000 credit card debt with a 18% interest rate and paying if off with a 401k loan at 8% seems like smart money maneuvering.
On the Minus Side
If you ask me, the minuses far out weigh the pluses. Where to begin? First: if you lose your job, or leave it voluntarily, you owe the loan back right away. Yes, no more five years to pay it back. You have (for most plans) 60 days to pay back the loan. Can you honestly say that your job is secure? Do you know, for a fact that you won't be changing jobs or cities in the next five years? Everything is so uncertain these days, why take the risk? Second, you are taking money from your future to pay for the present. Don't do it. Even if you want to use it for a first home, the benefit is negligible. These are the years when you need to be putting as much as possible into retirement. The stock market is recovering and every penny you put into retirement accounts will reward you tenfold or twentyfold in 50 years. The longer you delay retirement savings the less you will benefit.
You Can Apply For a Grant Online - What the Government Doesn't Want You to Know
By John Eells
If you were a select couple of people this year, the government could have sent you some money as part of the "stimulus package" but at the end of the day though that money is gone really quick through our day to day lives. In the full perspective of the "stimulus package" it is barely the tip of the iceberg when you compare it to
how much the government gives away to fortune 500 companies each year. The question that you have to ask yourself is, "Can anybody just apply for a grant online?"
You do not have to pay a dime back when you receive a grant. That is why a grant is one of the best opportunities anyone could receive! The government hardly looks at anything when considering, they don't take into consideration your credit rating.
They don't mind or care to say the least if there is a bankruptcy on your record you had a couple of years ago. The only potential problems you could run into is if you had issues with the IRS. A grant is not a loan either, it is the complete opposite. After all this is said and done, without question almost anyone is eligible to apply.
To apply for a grant online, for the average, the basics are you have to be a legal citizen of the United States of America, and be over the age of 18. There has been rumors going around with people that you have to be in "need", or own your own business with employees to receive aid. This is without a doubt this is not true! There are small business grants available though if you're in need of that wonderful opportunity. Everyone, with a few exceptions, is eligible for some form of financial assistance. It is as simple as asking, and it is given to you.
The government can be generous at certain times, for example if you do apply for a grant online. That certain amount of money that they do give away may be just for you. The whole process can be daunting, and stress most people out. To the point where people don't even try looking anymore for grants. The way they should go about this whole process is through a good, reputable company (usually online) that helps you sort through virtually thousands upon thousands of grants readily available. They help you find the perfect one that fits you and your current situation.
There are many grants readily available for your particular situation. They range from free government grants for college, free government grants for small business, government grants for housing. They may even help you with payments for your utilities. You can Apply Now!
Loans and Timing Essential For Student Accommodation Property Purchases
By Ignacio A. Sapalo Jr.
Every parent has the problem of their kids going off to college or university to be on their own. This is especially true if the school that they go to is too far of a commute. This is where parents often mull a purchase of student accommodation. These accommodations are usually small apartments with common areas for those staying
there to share. Thus, these student living areas are often looked at as a good alternative to renting and paying for board and lodging. This is because after their child finishes school the parents may actually be able to earn from the student accommodation by renting out the property.
However, timing is very important and preparations are very important. For parents
who plan to have their child to live in the student accommodation then the only problem is getting the home loan approved in the first place. Banks and lenders often shy away from accepting these types of loans because it is difficult to get a buyer in case of default and inability to pay the value of the loan. On the other hand, for those who are not parents but investors who would like to rent out the property immediately, then the correct timing and strategy should be made. Research on when school starts and advertising to possible tenants should be made. In this way the investor can immediately get a tenant for his student accommodation and any loan will become self liquidating. Of course if there is no school then the possibility of anyone wanting to rent the property in question becomes close to nil. This means that getting your return of investment and making the repayments becomes all the more difficult as no rental payments are forthcoming.
Thus it is essential to correctly time the purchase of your student accommodation for the best results. This will ensure easier loan approval and faster return of investment if you are in it for investment purposes. On the other hand for parents who would like their children to live in a comfortable environment, but cannot afford to pay for a unit in cash, the priority would then be to find a bank who would not mind approving a loan for the purchase of student quarters.
Same Day Cash Loans - Your Search For Short Term Assistance Ends Here
By Roben Dacon
Getting a loan is becoming so easy that you can even get a loan on the same day you apply for it. You just need to apply for the loan through the internet and the money will be in your hands in less than 24 hours time. Same day cash loans can solve your financial problems in a day's time. You will get the money on the same day you apply for this.
This is the perfect solutions for all financial crises. You will never have to wait for the money. Same day cash loans lend you money without any delay. You will be assisted in a very short time span. These are short term loans that are designed to
help you for a short time span. You can borrow £100 to £1500 for two to four weeks. You are supposed to repay the loan after you get your paycheck.
If you are running on bad credits and are facing rejections then you should apply for these loans as they may help you without any rejection. Your application will be entertained instantly and the money will be in your hands without any problems. The lender issues the loan on the basis of your current income so you don't have to bother about your past records.
Due to the high risk involved in these loans the lender charges high interest rates for these loans. So you should be careful about the amount you are borrowing. You should always try to limit your borrowing under your repaying capabilities. Late payment can cause lots of stress so always plan for the repayment in advance. The penalties for the late payments are high so paying back the loan in time is really important.
Loans For People on Disability Benefits - Fruitful Monetary Backing For Disabled People
By Quinlans Murray
Disability and financial crisis comes uncertain. If you are facing both at the same time, it can be the worst situation for anyone. As disabled benefits are not enough to live by and if you need additional finance, you can apply with loans for people on disability benefits that are mainly proposed for disabled people only. If you are
finding difficulty in meeting your needs and desires, this loan service offers you the right financial solution.
It does not matter whether you hold poor or imperfect credit scores, you can swiftly apply for loans for people on disability benefits without any hesitation. Presence of various bad credit factors like County Court Judgments, defaults, bankruptcy,
late payment, arrears and IVA are permitted. Hence, these loans can be available to anyone without ay apprehension. In order to get the simple approval of loans for people on disability benefits, the borrower needs to qualify the various specifications, such as:
1. Borrower should have a permanent citizenship of UK
2. He should be having legal age of eighteen years or more.
3. He should stay on disability benefits from last six months at least.
4. He should be able to save at least £500 per month.
5. Moreover, you must hold an active and valid and active checking account under your name.
Loans for disabled can be available to you in both secured as well as unsecured form. Anyone can avail either form according to his requirement and capability. If you can arrange a physical asset and need huge loan money, apply with secured form. On the other hand, tenants and non home owners can avail unsecured form as they are unaffordable to pledge collateral. The amount that can be availed with unsecured form ranges up to £25000 with the reimbursement period of 1 to 10 years.
Disabled people can be served well with the help of loans for people on disability benefits. To get the easy route of application and affordable deal, search an online web.
Salary Advance Loans - Use a Little Extra Between Your Paydays
By Gamin Kils
Salary advance loans give you the power to use a small part of your payday in advance. You can use a bit of your payday by paying a little fee for it. It is the best solution for all the financial problems you might be facing. You can easily get out of trouble without any problems. The beauty of these loans is that you can get the money in your account in less than 24 hours time.
It is very obvious that in an emergency all you need is the urgent cash. Salary advance loans can help you in that case. You will not have to wait for the money for a long time. Your loan will be approved without any delay. It is the reason why these loans are very popular among the UK citizens.
It is important to note that these loans are only available to the citizen of UK. You need to prove that you are a citizen of UK and are at least 18 years of age. You also need to prove that you are employed and are getting a monthly paycheck of at least 1000 pounds. All these small formalities are to assure the repayment of the loan.
If you are running on bad credits and are worried about the acceptance of your loan application then you should without thinking so much apply for these loans. These loans are approved on the basis of your monthly income. You are never bothered for your past records. So you just have to prove that you are able to pay the loan back in time. So if you are looking for short term assistance then you just need to find a computer with internet and the money will be in your hands without any hassle.
Do I Meet Face to Face With My Loan Officer Or Over the Phone-Fax-Email?
By Erika Naegelin
I have always been a big proponent of applying for a home loan in person. Sure, starting the process over the phone saves time and gas! And starting your pre-qualification over the phone is definitely the first thing to do. Are you even ready for the next step of the home loan application and consultation? This
pre-qualification process will answer that question. Be sure and read my ezine article on How to Pre-Qualify for a Home Loan, the Right Way for more information on being pre-qualified. However, the actual loan application, disclosures, and gathering of your documentation like paystubs, bank statements, etc. is so much more clear and concise when done IN PERSON.
There is tremendous value in meeting with a loan officer LIVE and in person. This means that you can look the person straight in the eye. Having an open and honest conversation with one another is very important, considering this is the largest debt of your life! I strongly urge my clients to come into the office, or meet at theirs to review their loan paperwork. Going over the bank statements, paystubs, tax returns, and the like is much more productive when a loan officer can review the items with you the consumer right up front. It's very frustrating to get your information to the loan officer, to then have them call you back days or even weeks later with questions. Why not just get it all done right away, when it is all fresh? Meeting in person is one way, that this will get done with the experienced loan officer.
Disclosures are certainly a big part of the loan application process, however, you have to remember that the disclosures are all pretty much the same from company to company because the government requires us all to disclose the same thing. They might look a little different with different company logo's, be on different size paper perhaps; but it is all the same. Each state has slightly different requirements and disclosures as well, so if you have done a home loan in one state and are moving to another you might see some differences.
One thing that I do with my clients, to save time at the in person meeting is to email or fax the loan disclosures to you before we meet. This gives you time to read over them, perhaps even sign them before you come in to the office. It helps get general questions out of the way as well, giving us more time to focus on your specific loan questions or my financial questions of you. After all, I am advising you on how to spend your huge check; so let this time really count that we have together!
Getting letters of explanations like employment history gaps, past credit issues, etc. can also be done right on the spot, which just alleviates your loan processor asking you for something to be explained later. And, quite honestly, saves you from signing one more piece of paper at your closing!
The most important part of the time that I spend with my clients in our face to face meeting is reviewing specific loan options. Going over estimates of closing costs, payments, down payments and the like is by far the most important part of my time spent with my clients. Really truly understanding what you will spend of your hard earned cash is imperative to you becoming a successful homeowner. Whatever you do, do not overspend on your home. Having too much house, and not enough cash each month is NEVER a good way to go. This is spoken by someone who knows first hand! My first home purchase was with every dollar that my husband and I were qualified for according to our loan officer. All $82,900 was spent, plus a few extra thousand for upgrades that we really were not supposed to spend. It was a very difficult 2 years of our financial lives. It felt like every dollar of our paychecks were going to pay the mortgage each month. We ended up selling this house after only 2 years, with only a few thousand dollars in our pocket from the net proceeds of the sale. All because we really quite honestly, could not afford it. This was all despite the fact that we technically, according to the loan officer's pre-qualification, COULD afford it! Obviously, this was before my entry in the mortgage industry; we were young and inexperienced in the way of our finances.
However, I do find a lot of my clients use every dollar of their pre-qualified or approved loan amount for a home. Think it through, be sure you want to spend everything. It's always better to have too much money in your pocket each month, than not enough!
The last and equally important part of the meeting that I spend with my clients, is reviewing the actual home loan process. Really understanding what the home loan process is all about is absolutely imperative for you to understand. Why we are asking for certain things, What are the next steps, Who will be working with you throughout the process, Where is the processing done, When will the loan approval be in, How is the process actually taken from one step to the next? This should all be answered in the in person loan application meeting, otherwise known as the Consultation. Personally, this is where more than half our time is spent once we have reviewed the actual numbers.
At the end of a face to face meeting (or skype meeting even!), you will be full of knowledge. Have some valuable new insights into a whole new world (yes it really is a whole new world!). You might even feel like your head has swollen from all the new information you have just taken in. I have heard this many times before in my career! But, I strongly believe too much information is never a bad thing. It is always best to KNOW and have an UNDERSTANDING than be in the dark and walk along blindly throughout the process.
Allowing a good loan officer to lead you to the light, with open eyes and full understanding is the KEY to your HOME LOAN SUCCESS!
Unemployed Tenant Loans - A Better Way to Get A Solution
By Ramsy Potin
Unemployed people often get into certain financial problem when they need money urgently with no security pledging. To provide them with the solution, there are unemployed tenant loans specially crafted for the unemployed individual fighting against serious monetary threats. These loans have the special feature that it gets
issued within a short span. At the time of immediate monetary needs, what can be a better option than this loan! Availability of the loan is quite easy and affordable. With online process of availability, borrowers do not require to face any hassles at all.
People acquiring unemployed tenant loan can use the money for various purposes which
are to be met immediately. There isn't any system of placing security against the loan amount and this feature has made the loan risk-free. Borrowers can use the loan amount for buying houses or they can use it for any other purpose. Before considering the loan, it is however, essential for all to acquire knowledge about the repayment structures. It is special about the loan is that sometimes borrowers get the flexibility of repaying the money after they are employed again. These loans are unsecured in nature and so the interest rate is a bit higher. But a good search over the net can help borrowers get a cheap loan over the net.
When people are presently out of job, they enter into feeble financial stage. Unemployed tenant loan can be quite appropriate at such stage as money can be easily available through this means. But prior attaining the loan, it is quite mandatory for borrowers to seek out the best possible options available through online process. A wide variety of lenders offer the loan at various rates. So, you should compare the different rates and then get into a final deal with the
Non Secured Loans - Collateral Free Monetary Aid For Urgency
By James Harry
Now there is no need to place your property at risk to avail small amount for short term period. People who are incapable of placing security can also avail instant funds with assist of non secured loans. This loan strategy is a landmark and has created its own reputation in the loan industry. This financial blessing is
conferred to all sorts of credit owners despite of their bad credit profile. This loan facility is easily available in the loan market.
This loan scheme is unsecured in nature that means people can grab swift amount as per their needs without placing any security. This is risk free for the borrowers
and quite risky for the lender. Thus, lender will approve non secured loans facility is relatively on higher rate of interest as compared to regular loans. But, this is not the subject of getting worried as it can be negotiated.
This loan facility sustains the borrowers by grating the amount between in the range of £1,000 and £25,000 with the reimbursement period of 1-10 years. So, you can fetch the desired amount as per your requirements and repayment capability. Make sure that the amount should be repaid on time otherwise delaying cause penalty charges. There is no restriction over the usage of borrowed amount. You may use the loan amount for fulfilling several of requirements instantly, such as:
* Pay the monthly home rent
* Sudden surgery expenses
* Purchasing domestic appliances
* Pay off credit card dues
* Unforeseen wedding expenses, etc.
Under non homeowner loans facility all sort of credit ratings like defaults, arrears, insolvency, CCJ's, IVA, foreclosure etc. are simply get approved here. Now, people can gain quick cash aid without crossing the hurdles of credit check. So, grab rapid funds with ease and comfort.
The most important part of this process can be its hassle free online application service. Now, you can handle the loan application process online with expediency from your home. Just fill an easy e-form with basic details and submit it online. Within few hours of wait the cash will get transit into your account. This process hardly consume few hours.