Importance and Sources of Finance In Business

November 26, 2014 Posted by admin

Finance is a key driving factor in any business. The importance of finance can be briefly described by the statement, �Finance is the Blood of Business�. It can be understood that as the human body cannot function properly without blood in the body, the same way a business cannot function properly without sufficient finance. As like human body would get sick the business would also turn out to be sick due to lack or improper management of finance. The important of finance is largely understood in the business and thus there are special departments generated within the business to look after the proper management of finance. The role of the finance department in the business is to look after the ways to get funds in business and also to constantly look after the proper utilization of existing profits in the business.
It is very important to keep the profit cycle on track for success of business. There should be a proper agenda for business to use its profits for a proper purpose as decided by the company. The company should have a rule that a certain portion of its profit would be ploughed back in business. The profit which is wisely ploughed back in business would be an investment in the company. There are several options for external sources finance, a company has to decide depending on its needs to select a proper source. There are short term and long term capital requirements of the company. A company can explore internal and external sources of finance for its needs. Internal sources of finance include Retaining Profits, Debtor Finance, Sale of existing assets and cutting down on stocks. Another external source of finance for business can be broadly divided in long term, short term and mid-term requirements. A long term financial requirement includes Shares, Debentures, Long term bank loans and Grants. Mid-term financial needs can be satisfied with Leasing, Hire Purchase and Medium term loans. On the other hand Short term financial requirements are met with Bank Overdraft, Bank Loan, Creditors and Debt Financing. A company has to wisely choose from the different sources depending on its requirement and also on its ability to repay it.
Other than the sources of finance a company can take help of trade finance and subsidies that are available to facilitate trade in the business. Fund management and financial management can determine the success and failure of the company. If a firm is wise enough to manage its funds then it can succeed with a small amount of funds and if a firm is does not take care of its finances then it would fail even after having more than sufficient finances.

Free Yourself Through Debt Consolidation Finance

November 24, 2014 Posted by admin

People…some rich…some poor…everybody is not equal in terms of finances. People with sufficient monetary support easily fulfill their dreams and desires, but….what about the people lacking funds??? Such people usually take the help of loans increasing their debts. Further again financial requirement arise, again these people go for debts. Lastly what happens is… they get surrounded by the trap of debts which becomes difficult for them to repay… This further increases trouble for them in form of a bad credit tag which gets attached to them for making defaults in repayments. There comes debt consolidation finance to the rescue.

Debt consolidation finance is meant for the consolidation or combining of all your existing debts into a single monthly repayment. This means debt consolidation finance can help you reduce the numerous repayments you make every month at variable rates to several lenders. With the loan amount, you can pay off these debts with ease. Debt consolidation finance serves you with much lower rates than what you may be paying now with large number of debts. Also, it gives you a chance to improve your credit score Debt consolidation finance offers you larger amounts between �5000 to �75000, when it is secured against some collateral. However, you can also apply for debt consolidation finance without any collateral in form of an unsecured debt consolidation financing. This type of financing comes with quicker approval and is available to people lacking security to offer to the lender. These people include non-homeowners, tenants, PG’s, people living with their parents etc. In addition to all these benefits, debt consolidation finance gives you freedom from the threatening calls from the lenders and creditors.

Debt consolidation finance works better for you when it is combined by measures such as credit counseling, debt education, hiring the services of debt consolidation agencies to manage your debts. Besides these, you can take measures from your side also such as controlling your credit card spending, working out a budget plan etc.
You can search for debt consolidation finance providers through online websites. These websites offer you free quotes from numerous lenders. You can compare these quotes through comparison tools to get the best deal out of the rest. Finally, you can fill an application form with the details about you, loan amount required, residential and employment status etc. After going through your application form lender himself will contact you with his services.


Understanding Large Cap, Mid Cap and Multi Cap Mutual Funds

November 21, 2014 Posted by admin

Understanding Large Cap, Mid Cap and Multi Cap Mutual Funds
Mutual Fund pools the savings of the investors, who share a common financial goal and then invest the corpus collected into a number of financial instruments to maximize the returns.
One of the ways to divide or identify a mutual fund is the criteria of market capitalistion.
The market capitalisation or Market Cap is the total no. of shares of a company outstanding in the stock market multiplied by the market price.

The major three types of mutual funds are Large Cap, Mid Cap and Multi Cap mutual funds.
Below we shed more light on the three types of the Mutual finds based on market cap.

Large Cap
Mutual fund houses have different parameters for choosing a large cap fund. Mostly, the companies which have got more than 1000 crore of market capitalization are taken as large cap companies and then the mutual funds invest in them accordingly. These companies have got maximum potential to grow and earn higher profit since they have large amounts of money at their disposal which can often be used.
The primary objective of the large cap mutual funds is to seek robust capital growth by investing into the stocks of large corporations and frontline blue chip companies.
Large cap mutual funds are generally less volatile than their counterparts which are Mid Cap and Multi Cap mutual funds.
However, the returns are generally low when compared with other classes as they are exposed to lesser risk, but on the long term, these funds have outperformed its peers. It is advisable to invest in Large-cap Mutual funds during volatile market conditions.


Cheap Used Car Finance – buy a car with a burden less loan

November 21, 2014 Posted by admin

You can buy a used car easily as it comes at low price. However, you may require a loan as the amount is still too high for sourcing it from own income. So, cheap used car finance becomes necessary. Cheap used car finance is called cheap because the finance is approved at lower interest rate. You can buy a used car of any make or any model through cheap used car finance.

The best way for availing lower interest rate on cheap used car finance is to offer the lender some security of the loan. The security may be any valuable asset of the borrower. Apart from the security, if the borrower has a good record of paying previous loans, his chances of getting cheap used car finance increase. So check your credit score first. An amount approved as cheap used car finance will depend on equity in the property placed as collateral. Your current repaying capacity also plays a role in determining the loan amount. Since you are buying a used car, lender will approve cheap used car finance for short repayment duration of few years. You can avail cheap used car finance without collateral but in that case the interest rate will be comparatively lower only when your credit score is excellent.

Sourcing part of cheap used car finance is important. Though you can get finance for used car from car dealers but they usually charge higher interest. It would be better therefore to go for a personal loan specifically meant for car buying. Such used car finance comes at cheaper rate of interest. You can contact cheap used car finance providers on their websites. Compare their individual interest rates for picking up a suitable lender offering cheaper rates.


Types of Mutual Funds

November 20, 2014 Posted by admin

Over the years a diverse range of mutual funds has emerged to meet a very broad range of investment objectives among the investing public.

A fund’s prime investment goals are stated in the fund’s offering prospectus and generally cover the degree of safety or risk that is acceptable, whether income or capital gain is the prime objective, and the main types of securities in the fund’s investment portfolio. From their differing investment objectives, the following main types of funds emerge:

1. Bond Funds – whose main investment goals are income and safety of principal. Investment by such funds is primarily in good quality, high yielding government and corporate debt securities, some high-yield preferred and common shares and mortgages. Their degree of volatility
is related to the degree of interest rate fluctuation.
Example: Altimira Bond Fund.

2. Mortgage Funds – investment goals are similar to those of bond funds, and unit values are affected by similar economic factors. Investors hold a share in a group of mortgages (much as bond fund investors hold a share in a group of bonds) rather than holding title to a particular
Example: Royfund Mortgage Fund.