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Car Finance Tips That You Should Know About

Car Finance Tips That You Should Know About

Planning is the best idea to do before buying a new car especially in paying for it. One of the biggest mistakes of most car buyers is when they use the finance deal offered by the car dealer. Compared to the average interest rate on dealer’s car finance, personal loan on the market is much better. It is because the average rate on a dealer’s car finance is 3% higher. In addition, personal loans that can be found in the market are 7.4% available. To know more about car finance, here are some helpful tips that can provide you a better idea before purchasing a new car.

The first hint is to KNOW WHAT TYPE OF CAR OTHERS ARE PAYING FOR. One should search what car models are most people are buying. With this, you can gather ideas about the average price that such individuals are paying for.

Second is to LOOK OUT FOR FINANCE. Search all the companies that are offering loans, remortgaging, and credit cards. You must also know their advantages and disadvantages. After doing this, choose one of them which is the best.

Third is to GET YOUR FINANCE WELL ORGANIZED BEFORE LOOKING FOR A CAR. Prior to checking out cars, it is important to know your highest budget. The buyer is in a good situation to bargain if he already knows his maximum budget.

The fourth hint is to NEGOTIATE. Trying to negotiate the price of a car is not bad. Actually, this is one of the best things to do in purchasing a new car. If the buyer gets the price as low as the dealer goes, he can try to get a little extras like mats and GPS.

Fifth is to BE BRAVE ENOUGH TO WALK AWAY. Do not hesitate to walk away if you feel that you do not get a great deal. There are lots of companies that are offering cars so there is a big chance that you can get a good deal. Make sure that you do a good decision because you are paying a big amount of money for a new car.

The last is to KNOW THE RIGHT TIME. There are times when a car dealer is not concerned about making a huge profit and searching to achieve their bonus targets. This time only happens at the end of the month. This is the right time to look for a new car.

If one will follow these tips, he can get a good deal. He can also get the car that he likes without any problems.…

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Successfully Managing Your First Credit Card

Successfully Managing Your First Credit Card

Congratulations on getting your first credit card.  Now, you are responsible for successfully managing your credit card.  Some difficulties face you, but with good habits you can create a positive credit history.

Whatever happens from here on will have enduring consequences for your credit history.  Let’s not mess up.  Here’s some sound advice.

o Your first credit card is not for fixing your financial woes.  This card is a tool to be used in establishing a good credit history to build on for future financial success.  When you make a purchase, pay before the due date.  Do not carry forward a balance, as higher interest rates will be attached to the balance.  Check your balances on-line and sign up for alerts to remind you when you need to make a payment.  Always pay on time.

o Do not apply for any more cards.  For the time being, you need only one single credit card.  Avoid the confusion and temptation of numerous cards.

o Take advantage of automatic payment options.  Set up an automatic payment account through your bank.  This way, you will never be late with a payment.  Always keep enough money in your bank account for the automatic payment to clear.

o Keep your credit limits low.  Don’t approve a high credit limit because it could tempt you to overspend and force you to carry over a balance.  High credit limits are also a temptation to minimum payments.

o Begin slowly, with small purchases.  You need to get used to using your credit card and to paying the balances in full when they come due.

o Do not let anyone else use your card.  The reasons should be obvious.

o Your card must be used to remain active.  Do not lock it away somewhere.  Use your card for small purchases that you will pay in full before the due date.

o Do not use your card for cash advances.  The interest rates on cash advances are prohibitive.  If you need cash, get it out of your bank account.

o Create a spending strategy.  Your purchase, normally, should not be higher than twenty five percent of your net earnings a month.

o If you have big trouble with your credit card, discontinue using it and pay the balance fully.

Manage your finances maturely and it will help you succeed into the future.  Manage your finances poorly and your future is a bit less bright.  Blunt words, but true.…

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Short Term Personal Loans

Short Term Personal Loans

When people need extra cash to carry them through emergencies, there are several approaches to take. One of the most common alternatives to a small business loan is the short-term personal loan. Such arrangements definitely have their advantages, but you should also be aware of their disadvantages.

Short-term personal loans can be obtained from a number of sources, but they all have one thing in common: They feature higher interest rates and must be paid back sooner than a typical small business loan would, for example. Educating yourself about general lending practices is a wise idea.

If you need money in a hurry, can afford to pay the higher interest rate, and are willing to face the consequences, then a short-term personal loan might be a good choice. Unfortunately, in many situations, people who take out such loans find themselves in even more financial trouble down the road. Keep in mind that personal business loans have serious upside but also a good amount of downside as well. Over the last several decades, the financial sector has witnessed an astonishing growth in the use of short-term personal loans. Even when the economy is doing well, the market for personal loans thrives.

The way consumer laws are written, entities that make short-term personal loans are allowed to charge higher interest rates. When you consider the amount of money you pay for the loan, it might change your mind. The time to use such a loan is when you need a small amount of money, have no other sources of funds, and can handle the eventual repayment of the loan itself.

Perhaps the biggest benefit of short-term personal loans is that you do not need any collateral. Even if you default on the loan, you need not worry about your assets being attached or repossessed.

One of the most common reasons people use such a loan arrangement is low credit ratings. Borrowers who have such low credit scores that they cannot get funds anywhere else often turn to the personal loan sector. Yes, interest is high, sometimes very high, and yes, you will have to pay the money back soon. But, if your back is against the wall and you have no other source of funding, you might have no choice. Usually, a small business loan from a traditional lender is out of the question for borrowers with bad credit and no collateral.…

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Gross Margin Doesn’t Live Here Anymore – How Does This Affect Bottom Line Profit?

Gross Margin Doesn’t Live Here Anymore – How Does This Affect Bottom Line Profit?

Remember the time when all wholesale manufacturer’s prices were accompanied by the user-friendly statement, “suggested list price”? In some cases the statement is still present, but the user can no longer use it! How does the Gross Margin affect the bottom line Profit?

The small business operator could simply ticket his products, knowing the list price included a comfortable Gross Margin – all worked out by the manufacturer to make a necessary bottom line Profit. Ah, the good old days!

With the advent of the mega discount stores of the past decades, one is often left puzzled with the question: “how can they sell it for so low a price when there is no more Gross Margin?”

Of course the answer is found in the volume and competition. The Gross Margin is cut to a bare minimum percentage ratio that leaves just enough to cover operating expenses – if at all. Bottom line Profits are consequently reduced.

Depending on the type of business, some are more affected than others, and of course, now, we have a whole different set of rules again with the Internet business, particularly in the area of digital products.

Some time ago, I was discussing this subject with a young entrepreneur who operates a small manufacturing business. He could not understand the issue, insisting the solution was found in getting better prices on raw materials and overhead costs.

That is obvious, of course. Making Profit has always been a matter of keeping overhead and expenses down. But he had no idea what Gross Margin was on an operating statement.

There was a time when the price of the product or service was standard pretty well everywhere you went. In the last twenty-thirty years, there has been an increasingly eroding effect on “list prices”. Often loss leaders have become the pace setters of today’s pricing.

John Doe Electrical Company decides to put forth a selling motion 20% below standard industry prices. The buyer picks up on that and eventually expects or demands the same from Electrical Co. #2 and #3, and all the rest of them have to follow suit.

As a matter of fact, today, companies offer a “we will not be undersold” policy that will refund the difference if you see the same product somewhere else at a lower price. And many will even add to the refund another 5%! Unfortunately the small business cannot compete with the margins of the mega box stores.

Over decades, the spiraling of the selling prices created a thinning of the built-in pre-calculated mark-up costs. There comes a point when the selling price dictated by the indiscriminate competition no longer supports the wisdom of the purchasing powers of raw materials and direct overhead costs.

Take for example the fascinating case of the computer retail and service industry. A few years ago, a graphics house could get its linotronic outputs at a service bureau for $18.00. Then someone else advertised them for $15. That became $12. Soon it was $8, $7 and even $6. True story. This last rate held steady for many years until this early technology was replaced. But the machines doing the output were still in the same price range to buy.

How much output does any service need to spit out per month, in order to cover the equipment investment, considering the average output takes about half an hour, and more if there are technical problems to deal with, plus labor? The suggested list price was calculated at $18 by common business accounting practice and included Gross margin and bottom line Profit. Now it has been knocked down to $6 or less!

What does this all mean?

Companies are making less and less. They have to run increasingly leaner; but where does that lead to when it runs out of meat? Dry bones! Less bottom line Profit. Job cutting. Employee cut back.

There are of course new waves of technological companies that show healthy ratios of pricing, costing and profit making. The gap between those and the traditional businesses, as we have known them during the industrial revolution, has grown bigger in this information/technology revolution age.

Gross Margin doesn’t live here anymore. She has been run over by tumbling selling prices. May be one day, even her very trace will be erased altogether from the standard financial statements of conventional businesses because there will no longer be a place for her. Or has that already happened? Who’s even searching for Gross Margin anymore? Bottom line Profit has to thrive alone now.…

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Chattel Mortgage Explained

Chattel Mortgage Explained

When a business needs to purchase new equipment, there are several financing options available. One of these is what is known as a Chattel Mortgage, and this offers the business a range of benefits throughout its term.

Simply put, a Chattel mortgage is one where the goods bought constitute the collateral on the mortgage. The finance company provides the cash to pay the supplier, and the business receives the goods. In this regard, the sale is classed as a cash sale and this means that the business may be able to negotiate a healthy discount and all of the GST is often claimed back in the business’ first BAS.

Where the business reports their Quarterly BAS on a “cash” basis, it is essential to use a Chattel Mortgage in order to be able to claim the GST back as a complete lump sum. Larger companies who report their Quarterly BAS on an “accruals” basis may also use a similar loan structure known as a Commercial Hire Purchase agreement, and still claim the GST back as a complete lump sum.

It’s possible to finance the complete purchase through a chattel mortgage, or to include a deposit of the business’s choice. Chattel mortgage can be used to purchase an array of items such as machinery and vehicles, which are large assets with a service life of several years or more. If the goods required are to replace existing – for example the replacement of a defunct photocopier with a new, state of the art model – many arrangements allow the old equipment to be used as a trade in, in place of a deposit.

A residual payment at the end of the term can be arranged. This would represent the value of the goods purchased at that time, and mean that the payment amounts through the period would be smaller. This could be good for early start up cash flow. Of course, some businesses would prefer that the payments clear the debt: what is termed a fully amortized chattel mortgage.

For tax purposes, the business can claim depreciation on the goods, running costs and interest payments against its business income. Furthermore, Chattel mortgage is ideal for smaller businesses who are under the simplified tax system (STS) and have a turnover less than $2 million. This is due to the fact that you are able to pool assets and claim the one depreciation rate of 15% in the first year, and 30% diminishing value after that, no matter what type of asset is being financed.

With so many advantages, using a chattel mortgage for your business equipment requirements could be the right solution for you. Before making such a decision, it’s wise to seek the advice of an experienced business finance advisor who can guide you through the whole process and will be able to answer any questions you may have.…

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Ten Rules For Getting Financing Or How to Make Your Asset-Based Lender Think You’re a Hot Date

Ten Rules For Getting Financing Or How to Make Your Asset-Based Lender Think You’re a Hot Date

Once upon a time, in a land far away, businessmen went to banks to borrow money as well as to deposit it. ‘Twas an enchanted land, where money flowed freely and businessmen gamboled in the sunny fields every day until their limousines took them back to their adoring wives and families. We can only imagine what that world must have been like. In our world, there are no fairy tales or happy endings, just bankers looking fearfully outside their office doors concerned that they might meet a borrower.

Fortunately, there are still many specialty lenders who, because of their familiarity with their own lending niches, are comfortable working in a world of shrunken liquidity. Those specialties include invoice factoring, purchase order finance, letters of credit, business or merchant cash advances, and even inventory finance. If you have a business that could grow more effectively with a little financial help, here are the Ten Rules to follow that will make you more appealing to the lender you need. In the Art of War, written two thousand years ago, Sun Tzu writes: “Know thyself, know thy enemy. A thousand battles, a thousand victories.” Lenders may not be your enemy. Yet. But they ARE sitting on the other side of the table.

Rule 1. Remember that you are not unique, and learn to love lenders’ paperwork. The funding company has seen plenty of people like you before. It’s their job to look at applicants. If they want forms filled out, give them forms filled out. Why make things tough for the people who can give you what you want? Just as you size up the people with whom you do business, so do they. But they do it partly with paper, so that they can show that they took an educated, rational risk just in case you turn into their favorite mistake.

Rule 2. Take the time to understand how you will probably look to a lender. The Scottish poet Robert Burns wrote: “O would some Power the Gift to Give Us, to see ourselves as others see us.” Granted, Burns wrote this when he saw a bug on a lady’s bonnet in church, but it applies in the business world too. If you think about how you look from a lender’s point of view, you can begin to improve your presentation. Almost everyone has problems of one sort or another. What speaks most eloquently to a lender is how YOU are handling YOUR problems. This is not to say that you will automatically get funded just for being straightforward. But if your case is borderline, your attitude and preparation may well be the tipping point in your favor.

Rule 3. You don’t ask, you don’t get. But ask effectively. Have a clear story and a clear idea of what you need. Funding people appreciate applicants who know what they need and who can express it. They don’t want to help you tell your story, or guess what you want to do. The more precisely and clearly you communicate about your funding needs, the more easily funders can approve.

Rule 4. Remember that you need them worse than they need you. It wasn’t always that way. The subprime mortgage fiasco was derived partly from mortgage lenders awash in cash who needed to write mortgages as fast as they could. “They” needed someone, anyone, breathing or not, who could apply for a mortgage. If we live to see another silly season like that, get money as fast as you can, and try to avoid being buried when things go bad.

Rule 5. Learn what funders will accept and do what you can to shape your needs to match their comfort zone. Different lenders have different styles. If you can conform your needs to match what a lender wants to do, you’ll be ahead of the game already. Likewise, if you take the time to understand how a purchase order funder will operate, you will save yourself time when you want to get things done.

Rule 6. Realize that even if the process is new to you, it’s not new to them.

Rule 7. Be honest and be especially aware of what a finance company would consider important. We had an experience several years ago where a mining company came to us seeking over $20 million to revive a dormant mine. Two months of hedge fund due diligence later, we were one week from closing. The fund analyst had one final mandatory call, wherein he asked the company owners if there was anything negative in their past that they wanted to disclose. The owners said no, there was nothing to disclose. When the background check turned up bankruptcy …

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Considerations When Looking For Car Finance by Location

Considerations When Looking For Car Finance by Location

When looking into car finance options it may be confusing as there are so many offers and deals out there. You may want to take what might seem to be the easiest option of walking into a dealership to buy a vehicle and take the finance deal they offer. However, this might not necessarily be the cheapest way of obtaining the finance needed to purchase a car. You may want to compare the cost of interest rates online and there are specialist motoring websites that search for car finance by location for you and allow you to look for a new or used vehicle in your area too.

If you choose the option above to look for a vehicle and car finance by location then of course this may save a great deal of time. Usually you are able to browse through new and used cars in your area and if you find what you are looking for, you are able to compare the best deals on your finance. If you do not understand APR then this may be the ideal choice for you as you may be sure that they find you the best deals possible. When you purchase a vehicle this way, usually everything is taken care of for you and all you do is pick up the car from the dealer.

When looking for a vehicle and car finance by location you then have to decide how much you are able to repay each month. To help keep the loan affordable you may be tempted to stretch out the term of the loan. When considering this you may want to use a loan calculator to work out how much you have to pay in interest and in total. It may help if you are able to pay something towards the cost of the vehicle so if you do have savings you may be able to borrow less and so you pay less in interest. Another bonus to taking a personal loan to finance your car is that the vehicle is yours and providing you keep the repayments up to date, or pay off the loan, you are able to sell or trade in the vehicle whenever you wish.

Of course, if you are going to take the traditional method of buying your car by going into a dealership on foot, the dealer usually offers car finance. When taking finance this way it is called hire purchase. As the name might suggest the vehicle is not yours until the final payment has been made, until then you are just “hiring” the car. You also usually have to put down a deposit on the car. As the vehicle is not yours until you have paid the final installment you are unable to sell the car or trade it in until this time.

Whichever method of car finance by location you choose, reading the terms of the contract is essential so you know exactly how much the vehicle is going to cost in total with added interest.…

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Helpful Cost Cutting Tips For Small Business Owners

Helpful Cost Cutting Tips For Small Business Owners

The secret to having a successful small business or home base business is to create a new way to monitor costs. You also need to realize that business spending can sometimes immediately increase and also decrease the income, and your business will not see any progress.

Most of the business owners realize that they generate income from the business, but they do not recognize where the money spent to. This problem will definitely affect the cash flow of their businesses. Successful business owners know that they have to regularly review their expenses within certain period of time. From this action, they are able to arrange the cash flow smartly and create more saving in their business.

You may review below lists for your consideration in creating good cash flow on your business.

– You can purchase the last year model of your operational needs such as computers, fax, furniture, or others for your office because these needs will always be newly produced by the manufactures every year and the costs of buying them will be higher. From here you can do the saving of you operational needs.

– You can start to purchase stocks in larger quantities and buy them in advance. Larger quantities means lower costs. Repurchase your needs before the stocks run out. And with purchasing them in advance, you will have more opportunity to gain the benefit of sales.

– Try to combine product shipment with consolidating them into one period of time. You can cut your mail cost from this consolidation.

– Turn your preference to probably products that is produced by national manufactures. It means that you can start to use national products to save money.

– Most of smart entrepreneur is aware when and where to buy a stock or products for lower prices. One of the options of have these are to gain the benefit from discounted products. Some companies provides discounts to their member on certain services such as travel, insurance, cargo services, telephone, or others. Taking advantage from the offers of some credit card providers is also a good option for your cash flow.…

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Private Investors For Startup Small Business Wanted – Think This Ad Has a Chance in This Economy?

“Private Investors For Startup Small Business Wanted” – Think This Ad Has a Chance in This Economy?

If you are thinking of finding private investors for your startup of a small business, the current recession will make your efforts more difficult.  Many private investors are very wary of investing in new businesses, but there are ways if you have a solid business plan, good credit and find the right investor.

There are many stories of great wealth that was created during hard financial times.  The bad economy has, understandably, greatly reduced the number of people launching new businesses.  There are people that are still willing to invest in small business start ups because the potential return on their investment can be significantly higher than what a risky stock market can produce.

The kind of private investor that will be willing to lend money during a recession is will probably require that the business plan be nearly bullet proof.   Placing an ad like the title to this article is likely to not be very successful. A small business entrepreneur looking for private investors will need to seek out the investor rather than just hoping that they will respond to an ad.

There are many ways to find investors and the type of business that is being started will limit the possibilities.  One of the best places to go for a business loan would be to a small commercial bank.  Oftentimes, small commercial lenders have more wiggle room in lending requirements than larger regional or national banks have.  Getting a loan from a bank, however, will require significant assets pledged as security for the loan.  Small banks will often require that the borrower give a personal guarantee which will increase the financial exposure for the business owner.

There are also lending clubs that can be found that pool the resources of numerous private investors to provide loans to small business owners.  These lending clubs can be found on the internet or through referrals from other business owners or business investment firms. 

There are also venture capital firms and angel investors that will invest in small business start ups, but these investors will want to be involved or at least monitor the start up of the business to make sure that their investment is safe.  The cost of these types of loans can often be high, but the right investors will often be a huge asset as their desire to protect their investment may also increase the business’ chance for success.  Angel investors and venture capitalists are often not shy in offering advice if it will protect their investment.

One of the best ways to get a private investor for a small business start up is to find an investor that will be willing to be a partner.  This partner can be a silent partner or can be involved in the business, but such an agreement should be put together by an attorney so that the business owner can have a buyout option once the business is successful.  Giving up equity in a business start up is often difficult for a budding entrepreneur, but it may be the easiest way to find money to get a new business up and running.

Placing an ad that says “Private Investors For Startup Small Business Wanted” is not likely to be that effective in a difficult economy.  Once a solid business plan has been completed, the future business owner should plan to spend a fair amount of time seeking out investors for the new business.  Selling the plan to the future investor may be the most difficult part of starting the business, but the efforts will hopefully pay off and result in a post recession boom for the business owner and the investor.…