Archive for: ‘May 2014’

Purchase Order Financing The Easy Way To A Steady Cash Flow

May 11, 2014 Posted by admin

Purchase order financing is an easy way for companies to generate steady cash flow. It enables them to access the materials they need to fulfill outstanding orders. When businesses are low on cash, it can be difficult for them to service their existing clients and it is sometimes impossible to spend the money necessary to attract new business. This is a terrible position to be in. Without incoming cash flow, a company is unable to stay afloat. If they don’t have enough money to finance present or future jobs, they will eventually be forced out of business. Purchase order financing (PO financing) is an excellent option for companies that find themselves in the aforementioned predicament.

While PO financing won’t provide a company with capital (the name is a bit misleading in this regard), it will allow them to buy the materials required for jobs they have already managed to secure. This frees them up to work and generate valuable income. It is important to note that there must be a contractual arrangement in place other wise PO financing is a no-go.

Purchase order financing requires the company to work closely with a Factor. The Factor will open up a line of credit with the company’s supplier so that they can have access to the materials needed to fulfill their contracted order. They may also opt to buy the materials out right. After this has been done, all materials will be shipped to the company who will manufacture the product and sell it. Once they have done so, they will give the Factor a portion of the profits. There are significant benefits to this form of commercial financing. We will discuss a few of them below.

� Frees Up Cash For Other Uses: When a company chooses to use purchase order financing, they are able to use their cash stores for other purposes, such as advertising, paying bills and fulfilling other jobs. They may also choose to save it. Each of these are great ways for businesses to make good use of capital, even that which is not their own.

� Provides Businesses With a Steady Source of Cash Flow: PO financing is a really great steady source of cash. As long as a company qualifies, they are able to tap into the cash sources of another business, using it for their own benefit.

� This is a Fairly Easy Method of Capital Generation: The exact requirements a company must meet to utilize purchase order financing will differ based on the Factor. It will be necessary for a company to determine what these are. A pretty uniform requirement is that the company has an iron-clad contract with their client.

Purchase order financing is an excellent option for companies that either do not have a lot of cash on hand or who would rather keep it in their bank account. It allows them to have access to another business’s funds which can be used to fulfill orders for their customers.

Bond Mutual Funds Offer A Safer Way To Invest

May 9, 2014 Posted by admin

Due to the fluctuations in the overall economy, men and women have become more investment conscious as of late. They generally take the time to investigate then make their investment in the most worthwhile vehicles. Bonds are presently a preferred choice over stocks, due to the security of the money committed to them. Bonds are generally issued by governments and corporations whenever they are looking for money. Against every single bond, the provider agrees to pay the investor a set amount each year until maturity and the principal amount at the end of the term. You can buy bonds in two distinct ways: bond mutual funds and individual bonds.

With changes in market conditions, the price of the bond also fluctuates. Thus, besides paying you a set sum every month or year, you will additionally acquire some percentage of the increase in the market value of the bond.

There are two means through which you’ll benefit from your investment in bond mutual funds:

Regular income: You are paid a set amount of money each month or at a consistent interval of time as agreed by you. The dividends from these bonds are greater in comparison with other types of investments.

Reduced risk: The money you invest in bond funds will be invested by the issuer in a number of companies. As a consequence, there is a lot less danger of losing your money as compared to stocks where all of your money is actually invested in the exact same business. This leads to reliability and much better yield, which is exactly what any investor looks for. However, it must be noted that these bonds aren’t totally risk free.

Bond Mutual Funds From Different Organizations

Certain bonds are released by the US government and they are usually considered a lot less risky as they are guaranteed by the government. The money is invested in government projects and associated agencies. A number of these bonds are not even taxable and provide a unique option to invest your money.

Cities and states likewise offer bonds. The majority of investors seek out these types of bonds since they are commonly exempt from state and federal taxes. Even so, the investment in these types of bonds is at a higher risk than in the US government bonds because municipalities have gone bankrupt in past times, subjecting the investors to a huge amount of risk.

Corporate bonds funds are riskier compared to other types of bonds however the returns are definitely pleasing. You can expect to earn plenty of income if you make investments in the right corporation. The risk occurs due to the non-availability of support from the government, and that is generally the case with other kinds of bonds.

Great Guide On How To Manage Your Finances

May 8, 2014 Posted by admin

Do not think you are saving money by not doing maintenance on your vehicle or home. Take care of your belongings on a regular basis and you will avoid larger expenses later. By taking care of items that are working, you can actually end up saving a lot of expenses in the future.

If you can do a home improvement project by yourself, do not pay someone to do it! If you’d like tutorials on the projects you’re planning, you can probably find them offered at a local home improvement store or online. You’ll learn the steps and techniques to complete your home improvements projects.

If you prefer to manage your finances through technology, use an online account management tool, instead of a paper checkbook. There are many different websites and stand-alone software programs that will help you to get your finances in order.

If your debt has been turned over to a collection agency, keep in mind that if the debt is not collected, it will eventually expire. Find out when your debts will become obsolete and refuse to pay back anyone who is trying to get money for an expired debt.

Do everything you can to keep good credit. A good credit score will help you when you apply for credit cards and loans. A low credit score can hamper your chance to rent a house and it will be harder for you to get a cell-phone plan and other utility services. Use your money intelligently to keep your credit score high.

Usually, if a product has faults, you will notice it within 90s, which is the length of most warranties. Extended warranties are great for businesses, but they aren’t great for the customer.

Try raising your credit score to 740 or above if you want to qualify for a mortgage with good rates. If this is your credit score, you will be able to get a good interest rate on your mortgage. Clean up any errors on your report and, if necessary, wait until your score improves. You should avoid seeking mortgage loans with a really poor credit score unless there is no other alternative.

Beware of spending money on products and services that promise you unrealistic earnings. It is easy for Internet marketers to fall prey to these tactics. This isn’t to say that there’s no value in taking training courses. However, remember that your goal is to make money. If you’re spending so much on study materials that you don’t make a profit, you’re wasting your money.

If you find you have extra money at the end of the month, save it instead of spending it. Avoid this by sticking to your strict budget and never allowing your personal finances to suffer again.

Find a checking account that is free. Local banks, credit unions, and online banks are all likely to have free checking offers.

If you are looking towards Christmas with a tighter budget than years past you may want to consider making your gifts. This can lower your visits to stores and save you hundreds during the holidays. You can be sure that creativity can really keep your wallet full.

Everything we do in life is affected by money. Use these tips to get ahead and be positive when it comes to personal finance.

When Is It a Mistake to Re-Finance

May 8, 2014 Posted by admin

Many homeowners make the mistake of thinking re-financing is always a viable option. However, this is not true and homeowners can actually make a significant financial mistake by re-financing at an inopportune time. There a couple of classic example of when re-financing is a mistake. This occurs when the homeowner does not stay in the property long enough to recoup the cost of re-financing and when the homeowner has had a credit score which has dropped since the original mortgage loan. Other examples are when the interest rate has not dropped enough to offset the closing costs associated with re-financing.

Recouping the Closing Costs

In determining whether or not re-financing is worthwhile the homeowner should determine how long they would have to retain the property to recoup the closing costs. This is significant especially in the case where the homeowner intends to sell the property in the near future. There are re-financing calculators readily available which will provide homeowners with the amount of time they will have to retain the property to make re-financing worthwhile. These calculators require the user to enter input such as the balance of the existing mortgage, the existing interest rate and the new interest rate and the calculator return results comparing the monthly payments on the old mortgage and the new mortgage and also supplies information about the amount of time required for the homeowner to recoup the closing costs.

When Credit Scores Drop

Most homeowners believe a drop in interest rates should immediately signal that it is time to re-finance the home. However, when these interest rates are combined with a drop in the credit score for the homeowner, the resulting re-financed mortgage may not be favorable to the homeowner. Therefore homeowners should carefully consider their credit score at the present time in comparison to the credit score at the time of the original mortgage. Depending on the amount interest rates have dropped, the homeowner may still benefit from re-financing even with a lower credit score but it is not likely. Homeowners may take advantage of free re-financing quotes to get an approximate understanding of whether or not they will benefit from re-financing.

Have the Interest Rates Dropped Enough?

Another common mistake homeowners often make in regard to re-financing is re-financing whenever there is a significant drop in interest rates. This can be a mistake because the homeowner must first carefully evaluate whether or not the interest rate has dropped enough to result in an overall cost savings for the homeowners. Homeowners often make this mistake because they neglect to consider the closing costs associated with re-financing the home. These costs may include application fees, origination fees, appraisal fees and a variety of other closing costs. These costs can add up quite quickly and may eat into the savings generated by the lower interest rate. In some cases the closing costs may even exceed the savings resulting from lower interest rates.

Re-Financing Can Be Beneficial Even When It is a “Mistake”

In reality re-financing is not always the ideal solution, but some homeowners may still opt for re-financing even when it is technically a mistake to do so. This classic example of this type of situation is when a homeowner re-finances to gain the benefit of lower interest rates even though the homeowner winds up paying more in the long run for this re-financing option. This may occur when either the interest rates drop slightly but not enough to result in an overall savings or when a homeowner consolidates a considerable amount of short term debt into a long term mortgage re-finance. Although most financial advisors may warn against this type of financial approach to re-financing, homeowners sometimes go against conventional wisdom to make a change which may increase their monthly cash flow by reducing their mortgage payments. In this situation the homeowner is making the best possible decision for his personal needs.

Debtor Finance Services and the Growth of the Financial Sector

May 8, 2014 Posted by admin

Debtor finance services can give a positive punch of cash into the exchange to help fund working capital and help, in any case it could be reasonably unreasonable and is not suitable for all organizations. As a general rule, financing includes getting a bank or pro loan specialist to give your business a loan, which is secured against the exceptional receivables of the business. In the event that you have especially long credit terms however require a moment working capital, instead of holding up for clients to pay, then financing can offer assistance. This type of financing gives an alternate approach to fund the working capital of the business without utilizing your altered stakes of the business or the particular possessions as security.
Debtor finance services have a tendency to be a more acceptable alternative for entrepreneurs or for organizations in development stage, where the holder does not wish to give their home as security to the business. This is extremely applicable where the house is not claimed by the single person at danger or, in those circumstances, where one business accomplice may claim a home and the other doesn’t. It could be especially utilitarian for organizations with no huge settled stakes who wish to fund fleeting development, and additionally organizations looking to address transient cash flow issues.
Nonetheless, since debtor financing expenses more in enthusiasm than different types of funding, its utilize needs to be carefully considered. It is frequently utilized where all different manifestations of security have been depleted or kept available for later as a choice when the business needs to fund quick development open doors and fails to offer the working funding to profit by these. The financial world has seen resurgence inside the financial business as banks and different agents have perceived the chance to furnish organizations with new manifestations of cash flow loaning and not depend simply on blocks and mortar as security.
It ought to be noted that Trade finance is not calculating. Considering viably outsources the debt collection methodology to an outsider (the agent). With figuring, debtors are made mindful that all debts have been doled out to the Factor and instalment must be made to the Factor, as opposed to the business. This can have a noteworthy effect on client connections. With debtor financing, subject to specific conditions that may exist inside gets, the client might never think about your interior funding courses of action and will keep on paying you on the concurred terms.
Both banks and other subsidiary lenders, give this type of Trade finance. Actually, the greater parts of the real banks now give this administration. In the event that your debtor’s book is solid and cash collections are short of what 45 days, then debtor financing won’t give any genuine extra funding profit and will indeed cost the business through premium charges. Debtor financing has its profits where clients are moderate to pay in excess of 60- 90 or more days. On the other hand you have to be certain those clients will pay.

Best Information To Help You Buy Mutual Funds

May 4, 2014 Posted by admin

Purchasing mutual funds online has been made very easy in recent years. A few people are already investing in those securities, and don’t even know it (yes, I’m talking about 401k)!

There are a few ways to buy mutual funds. Some of them depend on your level of technology knowledge, while other depend on your desired financial exposure. Knowing your technology means you can open an online account with a broker and trade for yourself. If that’s not a good option, you can go to a local broker’s office, and people there would be more than happy to help you.

If you do prefer to buy mutual funds yourself, there are two important paths to take. One is to open an account with the actual mutual fund company. This is a good option for people who will only buy this type of securities, and for people who will make small contributions each month, since the fees should be much lower.

For people who plan on investing in other types of securities as well, like stocks, ETFs, or other, opening an account with a broker might be a better idea. This is also a good option if you plan on having bigger investments. Do not forget that you can also go down both paths, and open an account with both a mutual fund company and an online broker. This might save you some money. The only problem here is the need to manage two separate accounts, which should not be a problem for most, but can cause some irritation for a few people.

Purchasing securities online requires some research. Not only into the fees charged by different companies, but into companies themselves. Try to ask your friends/coworkers about the brokers they are using. Do some research on the Internet, Google the company/broker name, check for negative reviews. There are a few websites that try to scam people into buying into huge returns. I’ve actually found a website once that was promising me mutual fund returns in the range of 15-20% a year! Doing some research and knowing what returns are realistic is definitely one of the required steps before you start investing.

Business Financing-Tax Credit Program

May 4, 2014 Posted by admin

Opportunities in business can be exciting but frustrating if you don’t have the cash required to take advantage of them. On one hand, this opportunity could be too hard to pass up because of the potential growth possibility, but, it can also mean accepting the often onerous terms of the lender to acquire the cash needed.

Many small business owners have used funding from friends/family to get their small business off the ground. If you are going to go this route, it makes sense to have a written agreement specifying the terms of the loan, repayment, interest, and so on. This can prevent many arguments and hurt feelings if the business struggles early on.Even the most successful businesses need a reliable source of working capital financing, so this situation is especially serious if a business cannot replace bank financing when it suddenly disappears. Even if a business still has an adequate line of credit, it is important to realize that on a widespread basis banks are reducing and eliminating business credit lines with almost no advance notice.

Owners can choose from small loans, factoring or a new twist on receivables financing. The least restrictive to the business owner is the receivable financing solution. It offers an online auction marketplace designed specifically as an outlet for small to mid-sized businesses to accelerate positive cash flow while maintaining complete control of the transaction. The business financing we are talking about can take many different forms – it might include an asset based line of credit, inventory financing or purchase order financing, a sale leaseback on unencumbered assets,, working capital term loans, or accounts receivable financing, otherwise known as factoring.

The relevance of small business financing advice is especially real when you feel you can relate to the author of the blog. Perhaps their advice is being given towards the type of business you have because they currently own a business similar to yours. So whats our bottom line in working capital business financing? It is simply there are alternatives available and you as a business owner of financial manager can assess those alternatives in terms of short term needs or long term needs.

In some cases, this involves finding a healthy bank that is willing (and able) to provide “normal” commercial loans and working capital financing. For successful commercial funding it will be necessary to explore non-bank solutions in many other instances.

The Benefits Of Mutual funds

May 4, 2014 Posted by admin

There’s no guarantee that your pension and social security checks will be able to sustain your retirement. If you’re looking for an excellent way to invest for the future, then you should certainly consider mutual funds. Here are some of their main benefits:

Diversity

One of the rules of thumb when investing is to invest using diversification. With mutual funds, you have the option of buying stocks in different sectors, without needing a separate portfolio for each one. In particular, you should look for mutual funds that include multiple sectors and industries. This will give you the best chance to maximize your profits.

Divisibility

If you’re like many investors, then you may not have the precise amount of money required to buy round amounts of stocks. Well, the good news is that with mutual funds, you can acquire them in smaller denominations than usual. This means that you won’t have to wait forever until you buy investments with higher price tags. In fact, you’ll be able to buy them immediately!

Economies of scale

Basically, the more you buy the more capital you’ll save. Think of economies of scale like buying anything else in bulk. Whether you’re purchasing sodas or donuts, the more you buy, the more money you’ll be able to save. Transaction costs are lower due to the huge amount of buying and selling that takes place. With fewer commission charges, you can save money on what you’d normally spend when buying things in bulk, such as stocks, thus your overall savings can be quite significant.

Liquidity

This is particularly important if you need to cut your losses. If you want to sell mutual funds quickly, you can typically do it. This could save you a ton of money and stress in the long term. As a word of caution, when selling mutual funds, be wary of any fees that are charged relating to the sell off.

Management by professionals

Along with buying the mutual funds, you also need to select a professional money manager. By doing your homework, you can find a money manager who has the skills, experience, and tools necessary to make the right investments for you. After doing carefully analysis, these money managers can determine which are the best stocks for you to buy and sell.

This can save you a host of potential problems. Most of us simply don’t know enough about the world of mutual funds, to make our own decisions about which ones to buy and sell. And even if we do, it’s quite likely that we don’t have enough time to research which stocks we should buy and sell. Having a solid money manager can solve that problem. Your investments are important to you, so it’s crucial that you have a trained professional to do the job and do it well.

When thinking about long-term investments, you should certainly consider including mutual funds as part of your portfolio. If you’re still uncertain about why you should choose them, then take the time to again read about the benefits already mentioned and to talk to your financial adviser