Finance Archives - Page 4 of 6

SEC Adopts Rules for Regulation Crowdfunding- A Review (Content Princess)

Usually, the only things I review are actual products, but today’s review is a little bit different. This review involves the Securities and Exchange Commission (SEC) and its adoption of rules involving crowdfunding and the selling of securities via this method.

What is Crowdfunding?

In case you are unfamiliar with the term, crowdfunding is a method of raising money through the Internet. Crowdfunding is used by individuals for a variety of reasons.

One purpose could be to raise money to put a product into development or production. It could also be used by individuals in dire need, whereby individuals could donate to help a person pay for expenses.

What is Regulation Crowdfunding?

Regulation Crowdfunding is just part of proposed amendments to certain rules involving the selling of securities by companies. Part of the JOBS Act was to amend certain rules put in place by the SEC.

These amendments would allow companies to sell securities through the crowdfunding method. Although this could be a matter of concern for many people (and for a good reason), there are quite a few regulations in place for both buyers and sellers of securities, along with the portals through which these transactions take place.

Rules for Sellers

Some of the rules for sellers of securities are as follows:
Sellers must provide the prices of the securities being sold.
Sellers must provide their company’s financial status.
Sellers must provide financial statements to investors.
Sellers must provide this information to the SEC and the entity that provides the medium for crowdfunding services.

Rules for Investors

Investors have certain regulations as well, mostly in place to protect them from fraud or substantial losses. This is mostly in the form of a limitation as to how much they can invest in a 12-month period. The amount allowed to be invested is based on income.

Regardless of income levels, an investor is limited to an investment of $100,000 for a 12-month period.

Rules for Funding Portals

Funding portals are the regulated, registered intermediaries through which securities crowdfunding takes place. Some of the requirements of these portals are:

Inform investors on how the process works as well as the offered securities.
Ensure companies using their portal are in good standing and keep proper records to use their portal.
Post all required disclosure information from the seller to the public at least 3 weeks before the securities begin selling.
Allow for communication about all offerings available via the portal.
Require investors to create and open an account before making any transactions.
Portals are ineligible from participating in the purchasing of securities by any company that uses that portal.
Comply with any rules and regulations set forth by the SEC to operate or continue operating.

My Assessment and Conclusion

Investors rightly should be concerned about buying securities through crowdfunding, but the rules and proposed amendments set forth by the SEC seem to have all the bases covered, thereby eliminating the majority of fraudulent actions by a company or portal and offering more than reasonable protections to investors.

Since crowdfunding is a popular method of buying and investing, there is no foreseeable good reason why the selling of securities should not take place in this way.

The requirements of each party listed in the sections above are not all the requirements set forth by the SEC. For full information on what sellers, investors, and portals are required to do and are limited by, please click here to be directed to the SEC web page regarding this matter.

Accenture and Oracle’s Hospitality Finance Cloud Solution Assists Clients in Improving Financial Management Performance (Content Princess)

Innovations in the Hospitality Industry

One of the most vibrant sectors of the economy is the hospitality industry. It is large and varying and amasses a huge amount of money every year. However, many of the different processes and responsibilities that are required of hotels, casinos, and other hospitality businesses take up valuable time and financial resources. There is a strong need and desire for these processes to be streamlined into something that is faster, easier, and more efficient. Accenture and Oracle have joined to create the Hospitality Finance Cloud Solution to help solve these problems.

What is the Hospitality Finance Cloud Solution?

Out of this joint venture, Accenture and Oracle have created a program to streamline the process of financial management and tracking. With this cloud program, businesses can access financial data and information from multiple sources, and connect it to on-property systems. The Cloud Program means that no matter where your financial data is at, or what kind it is, you can instantly stream it to your systems on the property. The program can automate workflow and operations processes easily and quickly.

Advantages of the Hospitality Finance Cloud Solution

There are many advantages to using the Hospitality Finance Cloud Solution. Because it opens up cloud integration to businesses, there is a wider variety of advantages and benefits open to users.

Cloud integration – With cloud integration, businesses can unite information from across hotel brands, property portfolios, property systems, and infrastructure forms.
Access to financial information can help businesses make better informed financial decisions.
Cloud integration also allows for real-time access to a variety of tools, including computers, mobile devices, and tablets.
With easier access to financial information, you can reduce the amount of risk you are taking with each decision.
Using the cloud system, you can simplify the infrastructure that is necessary to access all of your different financial information, reducing the amount of money you spend on infrastructure.
The process of reporting and tracking your financial information is easier with the faster access to all of your information, even if the information is stored in varying storage locations.
With easier access to financial information at all levels of your business, your business will, as a result, have an increased sense of transparency, which will aid you in how you run your business.

The Perfect Tool for Financial Management and Performance

If you are currently running a business in the hospitality industry, you are more than likely trying to find a way to streamline your internal operations and processes, cutting costs, and increase your profit margin. The Hospitality Finance Cloud Solution tool created by a joint venture from Accenture and Oracle can help you accomplish that task. You will be able to make better informed financial decisions because you will know the state of your finances at all times, in real time. You will not need to waste time, money, and effort on managing multiple formats and programs any longer.

Why is working capital the backbone of a business? (Content Princess – SEO)

What is working capital?

Simply put, working capital is funds available to the business for day-to-day use. It is the excess of current assets over current liabilities. A positive working capital reflects the ability of a company to pay off short-term debt. Some businesses cannot cover their regular operations without additional working capital obtained through funding options.

Ways to build a good amount of working capital

A few lucky entrepreneurs are financially stable. They have savings and sales to cover their expenses. Others, however, will need some help to get the business running. The financial backing can come from a variety of courses.

Regardless of the situation, businesses may need to increase their capital during certain circumstances. Some companies will use working capital to expand their business by hiring new employees, increasing their inventory, or investing in technological advances. Others will use the loan to prepare for an upcoming busy season.

How strong is your working capital?

As Entrepreneur suggests, a company can calculate its operating cycle and use that information to analyse its financial needs. The time elapsed during the accounts receivable and the inventory cycle is compared to the length of the accounts payable cycle. A lower working capital during the first two cycles could prompt a business to look at financing options.

Does the Business Need a Loan or a Cash Advance?

Loans and cash advances are the two primary funding options. Each has its advantages and disadvantages, and each can be procured from several establishments. Below is a summary of each option.

Loans

Legally binding
May be dependent on credit history
Possibility of low-interest rates
Can be approved and funded quickly
No hidden fees

Before signing for a loan, the business owner must be eligible for it. The requirements vary by lender, but they are essentially verifying that the owner will repay the loan on time.

Cash Advances

Less regulated than loans
Offered by non-banking corporations
May be easier to obtain for new businesses
Different payback system than loans
May have high-interest rates
Can be approved and funded quickly
May have hidden fees

Look out for the funding options at Capital Float

The size of your company and eligibility

Capital Float will accept businesses that are as young as one year old, granted they have an annual turnover of 25,00,000 rupees and are based in India. Loans begin at 1,00,000 rupees, go to up to 1,00,00,000 rupees for online sellers, and are capped at 50,00,00,000 rupees for larger businesses. Interest rates can be as low as 18{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}, and funding can be approved in one week.

How much of your inventory can be financed?

Inventory financing is available for companies that have been running for two years with an annual turnover of 1,00,00,000 rupees. Up to 80{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of the invoice value can be loaned. The loan can be repaid in one payment, or over the course of up to 180 days.

Cash advance for your business needs

Additionally, cash advances are distributed to companies with annual turnovers of 20,00,000 rupees, when 12,00,000 of that is done by credit card. The loan can be between 50{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} and 150{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of the applicant’s monthly credit card volume, repayable in up to one year.

Managing the Cash Flow for Improved Sales

When sales are going well, and expenses are being covered, the business has a positive cash flow. This is the desired flow for a company. Having a negative cash flow means that the business is spending more than it can repay, and this is risky behaviour.

Factors affecting working capital

Working capital management is essential for the business to run smoothly. To properly manage the cash flow, factors like accounts receivable, inventory, and accounts payable need to be considered in addition to the profit or loss of the company. Generally speaking, a positive cash flow means the business is profitable. A low inventory level frees up working capital for other uses. Sending out invoices promptly will speed up customer payments.

Identify difficulties and resolve problems in time

Having a cash flow spreadsheet allows the owner to quickly identify challenges that may be faced, such as unexpected large orders, cancelled orders, or late payments. When the repercussions are shown with numerical values, plans can be made in anticipation of those events.

As business owners learn to control their cash flow, working capital will be more readily available, and funding options will not be required as often.

Primary keyword: Working capital

LSI keywords:

Variants: additional working capital, lower working capital, working capital management, positive working capital

Antonyms and synonyms: cash flow, financing options, funding options, financial backing, regular operations, operating cycle, financial needs, inventory financing

https://www.kabbage.com/blog/merchant-cash-advances/

https://www.entrepreneur.com/article/225658

http://www.investinganswers.com/financial-dictionary/financial-statement-analysis/working-capital-869

http://fitsmallbusiness.com/working-capital/

http://www.profitbooks.net/manage-cash-flow-small-business/

What You Should Look For in Unsecured Business Loans (Content Princess – SEO)

Unsecured business loans allow a small business to obtain funding without putting up collateral. This is a viable option for many businesses who may not have anything of ‘value’ to put up as collateral e.g. expensive equipment or property. It is also a viable option for companies that may not wish to borrow much in the way of cash.

As with other types of loan out there, you will find that there are many lenders to choose from. Some of these lenders may be perfect for your business. Other lenders may not be quite as advantageouss. As a small business owner, it is your job to select a lender who is right for the business that you are operating. This blog post will provide you with details on how to do this.

Benefits of Unsecured Business Loans

There are various benefits to unsecured small business loans. You will be able to see a quick round up of the advantages on Chron. It, essentially, boils down to the following:

Easier to obtain than traditional loans as you will not have to supply collateral.
In the event of bankruptcy, unsecured loans tend to be ‘discharged’ whereas secured loans are typically not.
The lender will not be able to seize your possessions should you be unable to pay the loan back.

Steps to Obtaining a Small Business Loan

Obtaining an unsecured loan for your small business will rest strongly on the way in which you manage your business and your finances. Before you apply for a small unsecured business loan, you should read the article at Investopedia. It goes in depth on what is expected of you when you apply for a loan. It can be summarised as follows:

Ensure that your cash flow predictions are accurate. This will have a significant impact on whether you can obtain a loan or not.
Ensure that your credit score is accurate. Try to boost it if possible. An excellent guide to follow can be found on inc.com.
Put together a solid business plan
Research potential lenders. We will give you information on how to select a lender in the next section.

What should you look for in an unsecured small business loan provider?

Your small business is unique. This means the short-term financing that you obtain for your business should be unique too. Therefore, it is important that you select a loan provider who can offer flexible loans. Capital Float can provide you with the following:

Customised loan products. This way you will be able to tailor the loan package to suit your specific business.
Flexible financing options. This includes invoice financing and e-commerce finance.
Term finance where you have the ability to set the length of the short term business loan.

Small business lending on both invoices and e-commerce values are a great way to boost your chances of being successful with your loan application. Invoice financing allows you to borrow capital against the number of outstanding invoices that you currently have. E-commerce financing allows you to borrow money for your small business against your average total sales for your online company.

Unsecured business loans without collateral tend to be a bit ‘riskier’ for a lender. Also, you may find it slightly more difficult to obtain a loan with competitive interest rates. However, if you look at various websites, you may not find a satisfactory interest rate. But we here at Capital Float, provide you with competitive interest rates as low as 1.33{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}. Low interest rates mean that your business will be paying back ‘less’. This means paying back the loan will have a lower financial impact on the firm.

Applying for the loan

Once you have found somewhere to provide you with your unsecured loan for your business, it is important that you get the application process right. This will increase your chances of being selected. At Capital Float, we will process your application and provide you with the money that your small business needs within just three days. However, to ensure this, you will need to make sure that you have all of your paperwork in order.

Primary keyword: Unsecured business loan

LSI keywords:

Variants: unsecured small business loans, Small Business Loan, small business unsecured loan, unsecured small business loan provider

Antonyms and synonyms: collateral, traditional loans, secured loans, short term financing, financing options, Term finance, short term business loan

Sources:

http://smallbusiness.chron.com/advantages-disadvantages-unsecured-business-loan-34986.html

http://www.wahm.com/articles/the-pros-and-cons-of-unsecured-small-business-loans.html

http://www.investopedia.com/articles/personal-finance/082616/4-steps-getting-small-business-loan-without-collateral.asp

http://www.inc.com/rohit-arora/eight-ways-to-raise-your-business-credit-score.html

https://www.nationalfunding.com/unsecured-business-loans/

http://www.comcapfactoring.com/blog/what-is-invoice-financing/

https://www.fundingoptions.com/knowledge/finance-for-ecommerce/?utm_expid=52061910-29.EPoOv9CRSBeI-fZQil1s0A.0&utm_referrer=https:{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}2F{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}2Fwww.google.se{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}2F

https://safe.capitalfloat.com/cf/offers/businessLoan?utm_source=Social&utm_medium=Facebook_Post&utm_campaign=GIFF-UBL-Flash-Sale-5Aug_ARM

http://fitsmallbusiness.com/how-to-apply-for-an-sba-loan/

https://lendedu.com/blog/difference-between-secured-and-unsecured-loan/

Grow Your Business With Reliable Invoice Finance Factoring Services Offered By KredX (Rank Princess)

With the concept of Make in India spreading across the country more and more young minds are establishing their start-ups. And why shouldn’t they? It is generating employment for many people and helping the economy of India to flourish.

What a start-up needs the most during its initial phase of growth is venture capital investment. Poor cash flow can damage the success rate of any SME or MSMEs. To prevent your venture from crashing it is of paramount importance that you have the working capital set aside.

Slow paying invoices from customers can affect your business adversely. Usually, it takes anywhere between 60 – 90 days to clear the invoice. This means you have to wait for at least two months before making another investment.

What KredX Can Do For You

We all know companies cannot grow without making investments. This is where KredX comes in the picture. What KredX can do for you is bridge the duration of invoice payment, thereby catalysing your further investments by a simple process called Invoice Financing.

By using the Invoice factoring solutions offered by KredX, you can be at an advantageous position and make significant benefits financially. Instead of waiting for 60 – 90 days to receive your payment, you can opt for invoice financing and prevent your money from getting frozen.

Invoice financing can act as an incubator for your independent business venture and help in generating liquid cash. While invoice factoring assists SME, it offers many perks even for well-established corporate groups.

Benefits Of Invoice Financing For MNCs

Let’s take a closer look at the benefits of invoice financing for MNCs.

Release Cash Flow – All companies whether small or big need a constant cash flow for them to operate smoothly. By using the aid of invoice financing, you can release almost 80- 90{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of your invoice bill within a day instead of waiting for 60 days or more.
Hassel Free Funding – While you can opt for loans from other financial institutions it always comes with a lot of baggage and a repertoire of requirements for you to qualify. Invoice financing solutions offered by KredX allows you to obtain the cash quickly with minimum paperwork.
Ultra Short Term Finance – KredX lends you cash with minimum ARR, hence delivering maximum returns for your corporation.
Reduced Risks – With the proprietary credit risk assessment model for borrowers and tech platforms, KredX enables quick, unobtrusive, and safe transactions.
No Collateral Concept – Don’t have any assets to put up as collateral? Well, don’t worry about it. With the invoice financing services of KredX, no collateral is needed. You will only need to submit your unpaid invoice slips.
Extended Credit Period – While you can obtain the much-needed cash to liquidate your finances via KredX, you can also increase the credit period for your customer. This helps build a healthy relationship with your customer, while you get your working capital.
Higher Funding Limits – Usually financial institutions like banks evaluate your outstanding invoices and lend anywhere between 30 to 40{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of the value. With the invoice financing solutions offered by KredX, you can receive up to 90{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of the outstanding invoice amount.

The bottom line of benefits of invoice financing is pretty clear with the above-mentioned points. Be it a small or medium sized enterprise getting funded against your outstanding invoices is the best solution to cover the operational costs.

And with current positive testimonials, KredX was able to deliver maximum returns with reduced risks in lowest maturity period. Some clients were even able to receive up to 20{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} annualized returns which make KredX a preferred option for financial backing.

GST and Invoice Discounting India: Prospects of the Future (Rank Princess)

The goods and services tax is soon set to become a reality in India. It will change the taxation system drastically.

Despite some controversies like the inter-State tax (that was later dropped), the GST has been hailed as a positive move.

Benefits of the GST

The main advantage that has already been pointed out in the media is that this is a single comprehensive tax that brings into its purview all existing taxes. Customs taxes, VAT, everything, is included under one heading.

Another significant advantage is that the tax will be applied at a single point, that is, the end consumer will pay the tax. This enables the suppliers, manufacturers, and retailers to recover GST incurred costs as a tax credit. This will also reduce ‘double counted’ taxes and will end up reducing tax burdens on small businesses as well.

In the long term, due to decreased transaction costs, prices of goods may become lower without causing any loss for manufacturers or businesses; this will increase consumption and end up increasing revenue.

GST and Invoice Discounting: Cheaper Capital?

Given that invoice discounting aims at solving immediate cash-flow issues for companies, it will be convenient to have a single point tax. It reduces the tax burden as every point of exchange will not be taxed.

Invoice discounting provides working capital for a business and charges a ‘service fee,’ for it. Given that the taxation in GST will not differentiate between goods and services, it may end up being cheaper and more profitable to work in invoice discounting as there will be a single tax and other costs incurred for GST will be tax deductible.

Increased consumption is good for businesses, but they will require increased capital to keep up with demand, and discount invoicing companies can take advantage of this need to expand their own business and also assist their clients.

Indirect Benefits

A major indirect benefit of the one point tax system to invoice discounting will be reduced transaction efforts.

While this is not directly reflected in the bottom line, when providing working capital there are transaction costs involved which complicate matters.

Calculating how much of the debt is owed to the discounting company for service fees, and also counting taxes and other government fees and what is thus owed to the other business is a complicated matter. A simpler transaction is possible with the GST if invoice discounting companies take advantage of the oncoming tax regime to make a similarly lean system for themselves.

Equality of tax treatment on goods and services will also mean that there will no longer be separate conditions for businesses according to whether they manufacture or provide goods. This will lead to lower transaction efforts for the invoice discounting company.

Another indirect benefit is that with increased transparency and efficiency, there will be a boost in the market. Entrepreneurial efforts are expected to increase, which will lead to an increased desire for working capital.

A Primer On Unsecured Business Loans: A Leg Up for SMEs (Rank Princess – SEO)

Unsecured business loans are loans which exist without collateral assets on the line. This is great for SMEs and start-ups because it gives them the required push. CapitalFloat, in particular, has unique benefits to offer.

Unsecured business loans are a great way to move forward in the business world. Below are a few common questions people have about these loans, and their answers.

What are unsecured business loans?

Unsecured business loans meaning is that money is lent to you without any collateral assets at stake.

Most loans work like this. Money is lent to a business, and they have to pay it back with interest within a stipulated time frame. Some asset (like a house) is kept as collateral. If the business defaults on these loans, the collateral asset is taken away by the lender.

But this is different. Unsecured business loan lenders give you money on the sole creditworthiness or reliability of the business which is asking for the money. These are also known as signature loans or personal loans.

What happens when you default an unsecured business loan?

The lender can sue the defaulter for the money owed (principal and interest) as well as additional penalties and costs as a punishment for defaulting on the loan.

What are the interest rates like on unsecured loans?

The unsecured business loan interest rates offered vary from bank to bank. However, some Non-Banking Finance Companies (NBFCs) also offer highly competitive interest rates.

An unsecured business loan interest rate comparison would show thatCapitalFloat offers attractive interest rates starting at 1.33{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} per month. Of course, this is a general figure. The amount of money lent varies depending on the type of loan.

What are the different types of unsecured business loans?

Loans, in general, are only usually distinguishable regarding purpose, interest rates, and length.

Specifically, we find that CapitalFloat offers three kinds of loans: term finance, invoice finance, and online seller finance.

How’s the Term Finance loan CapitalFloat offers?

The features are:

You don’t have to give any prepayment charges.
The tenure is flexible and ranges from 6 months to 3 years.
The amount you want to borrow ranges from 1 lac to 50 lacs INR.

All these benefits are provided in exchange for really small unsecured business loan requirements like three years’ operational history, a 650+ CIBIL score, and an annual turnover of over one crore (or) impeccably audited financials.

It is important to note that other lenders often expect much more from you, especially regarding collateral.

What about the Online Seller loan?

This is most suitable for companies who are expanding their market sales or moving to new markets. Companies in transition to becoming something bigger.

You can borrow for 90 to 180 days.
The amount can range from INR 1 lac to 1 crore, depending on your needs. Also, it can be twice as high as the borrower’s monthly sales.
The repayments have to be done fortnightly.

Aside from basic KYC expectations, all you have to show is one year of running a business, at least INR 25000 sales each quarter, and partnership vintage between 3-6 months at least.

Finally, what are invoice finance loans? Are they useful?

Invoice finance is loan that lenders like CapitalFloat give you on the basis of your invoice. That is, on the basis of how much money you expect to get from your customers.

The CapitalFloat invoice loans look as follows:

You can borrow from 30 to 180 days.
A maximum of 80{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of the invoice value is lent, and this amount should be between 1 lac and one crore.
You have the option of one-time bullet repayment.

Expectations from the borrower’s side are minimum two years of functioning business, vintage of over three months, and an annual turnover of over one crore.

Are unsecured business loans financially safe?

In short, yes. Especially, for small to medium businesses, unsecured loans can be helpful.

You have no collateral, fast funding, the flexibility of repayment (within reasonable limits), and high approval rates. Also in the unsecured business loan, bad credit isn’t that harmful because the lenders often believe in helping the business.

All of this is great for SMEs because it’s difficult to give valuable assets as collateral, and loans are crucial in expanding and improving business.

Further reading:

LSI Keywords: unsecured business loan lenders, unsecured business loan interest rates, unsecured business loan meaning, unsecured business loan bad credit, unsecured business loan interest rate comparison, unsecured business loan requirements

Measuring the Health of your Business through Working Capital (Rank Princess – SEO)

The revenue or fund that your business has to run the daily, weekly and monthly operations is called the working capital. This includes maintenance costs, rent, office materials and utilities.

The absence of a working capital causes a business to fail; hence it has an intricate relationship with the health of business.

Working capital is also scrutinised by investors to assess your company’s financial well-being. It also identifies the liquidity of the business, i.e., the ease with which the company’s assets can be sold to convert to cash.

Calculating Working Capital

Working capital for businesses can be found through a simple formula,

Working Capital = Current Assets – Current Liabilities

The amount of working capital of your business indicates your capability to pay off short-term debts and expenses on a daily basis. The higher the working capital, the healthier your business is. If your working capital is on the lower side, then you should reassess your commercial model and business strategy.

Working capital can also be found using a ratio,

Working Capital Ratio = Current Assets / Current Liabilities

If the working capital ratio you calculated is less than 1, then your liabilities exceed your assets. This negative working capital is a sign of an unhealthy business. However, if this ratio is a very high number, then your business has too much inventory or assets on hand. Some of these assets can be invested on a long-term basis to help the company grow.

The ideal working capital ratio varies based on the industry that your business services. But, if this value is on an average between 1.2 and 2.0, then your business is running on a healthy note.

Purpose of Working Capital Management

The principal objectives of working capital management are,

Ensuring the smooth operation of the working capital operating cycle

The operating cycle here is the business lifecycle in its entirety. This includes the acquisition of raw materials, smooth production processes and delivery of products. One of the main objectives of the concept is to ensure smoothness in end-to-end processes.

Reducing cost of capital

The amount that is spent on maintaining the working capital is called cost of capital. These costs need to be carefully monitored and managed.

Maximising returns on asset investments

The ROI on assets that are currently invested should be greater than the weighted average cost of capital to ensure that wealth is maximised.

Working Capital Management – Approaches

There are three strategies that are commonly employed for the management of working capital.

The Conservative Approach

As per this approach, in addition to the everlasting working capital, the variable working capital is also funded from long-term sources. This implies an increase in cost capital, but the risk of fluctuations in interest rates are lower.

The Aggressive Approach

In this strategy, the variable working capital, the whole or parts of the permanent working capital and, at times, the fixed assets are financed from short-term sources. The cost capital is hence decreased, resulting in maximum profits, but it holds significantly higher risks.

The Hedging Approach

The fixed assets and the stable working capital are funded from long-term resources, while the variable working capital is supplied from short-term sources. This ensures moderate risks and moderate profitability.

Importance of Working Capital to a Business

Businesses with a lower working capital will enable shareholders to benefit from a higher return on every dollar invested.
Appropriate working capital management will allow businesses to pay their short-term obligations on time and improve their credit profile and solvency.
Working capital management drives the profitability of small businesses.
Good working capital management allows businesses to allocate resources efficiently and improve liquidity.
It also results in higher business valuation and favourable financing conditions.
Businesses with good working capital management can ensure uninterrupted production and will be immune to peak demands. Studies have shown that they have a distinct competitive advantage in the industry.

LSI Keywords: Working Capital, Current Assets, Current Liabilities, Working Capital Management, Importance of Working Capital, returns on asset investments, working capital operating cycle

References

https://www.efinancemanagement.com/working-capital-financing/importance-of-working-capital-management

http://www.investopedia.com/ask/answers/100715/why-working-capital-management-important-company.asp

http://accountlearning.blogspot.in/2011/06/need-and-importance-of-working-capital.html

https://www.linkedin.com/pulse/importance-good-working-capital-management-business-fareed

https://www.kashoo.com/blog/what-is-working-capital-and-why-is-it-important

https://www.paychex.com/articles/finance/why-is-working-capital-important-for-business-success

http://smallbusiness.chron.com/importance-working-capital-management-avoiding-bankruptcy-39031.html

https://www.cleverism.com/working-capital-management-everything-need-know/

http://www.yourarticlelibrary.com/finance/importance-of-sufficient-working-capital/26225/

Six Cool Ways to Ditch Leather (Rank Princess – SEO)

Organic accessories are becoming a new lifestyle. More and more people are shunning products manufactured unethically or cruelly. It started with Vegan diets, which had its roots in the grave matter of animal cruelty. Then the ghastly truth about blood diamonds was revealed, leading to further more pressure. Now it’s finally shoes, belts, and bags.

The world now consists of two types of people. Individuals who have changed with sincerity and raised their voices against sweatshops, natural resources’ exploitation, deforestation, pollution and various other global issues. The others, well you know they are surfing Pinterest & Instagram sharing the same.

It was because of the efforts of the former that brands are now becoming conscious of their customers’ preferences. Brands have taken up the causes, mixed them with their strategies, and have come out with organic/ ethical/ vegan products in every form. The latest trend picking up are vegan/ organic shoes and bags.

Why Give Up on Leather?

Many large brands are accused of exporting their products from such sweatshops.
Leather puts stress on animal cruelty and the environment.
Tanning of leather requires the use of many chemicals. The industrial waste is then dumped into rivers or land, causing these chemicals to harm the environment.
Another reason to shun leather is that animal farming for their hide is a grave threat to animals.

The Age of Vegan Leather

Vegan leather is faux/ artificial/ eco-friendly alternatives to leather. If you believe, that without leather you can’t make a style statement, then you are in for a surprise.

We have a list of alternative leather that will give a new meaning to your lifestyle.

Paper

A hot trend of tightly knit wash made from the bark of Kozo trees. This is then cut and lined for making women’s bags. Many top fashion houses such as Bottega Veneta, Engage Green, etc. have incorporated this in their accessories’ lines.

Cork

Corks have been long used to keep your favourite champagne fresh, but now they are used to manufacture women’s bags, men’s shoes, as wells as umbrellas. Christian Louboutin and Chanel are already making a statement with corks.

Pinatex

Not a very popular fruit, but makes an awesome dress! Our next vegan leather on the list is made from waste parts of the pineapple bush. The material feels and looks like leather, is water-resistant and very durable.

Recycled Rubber

Fashion houses have taken up the challenge to make recycled rubber a sought after fashion material. Recycled rubber can be given a leather texture that’s glossy and chic. Paguro makes stylish unisex bags and cuffs for men from this easy-to-care-for material.

Waxed Cotton

Tote bags are old names, say hello to organic waxed Cotton. Marc Jacobs have picked up cotton and made it into a water-resistant uber cool material to make shoes and bags for both men and women.

Tree Bark Leather

After reading about cork, this one should go down quickly. The leather is made from sustainable timber. The wood leather is durable, robust and unique due to its natural ingredients, making it suitable for coats and trousers. D & G have even used it to make women’s bags.

Keyword- vegan leather

LSI- women’s bags, men’s shoes, men’s accessories, water-resistant, animal cruelty, organic accessories

Small Business Financing-A Simplified Breakdown

Small business financing is an important part of any company’s start-up process. After all, how can one kick start a successful business venture without the capital to back it up? Luckily there are things in place to help make business dreams a reality; it’s simply a matter of understanding how business financing can work for you.

What Are SBA Loans?

SBA (or the U.S. Small Business Administration) is a government agency dedicated to providing loan guarantees and other support to help promote healthy business and company growth across the country. It was established in 1953 and has since helped secure over 20 million loans.

Often considered one of the easiest ways to secure small business financing for start-up companies looking to make their mark, it’s important to understand how they work. Small business financing can be risky, and the less ignorance displayed when applying for the loan, the better.

One important thing to remember when applying is this: these loans do not come directly from the SBA. They are primarily outsourced by banks and vendors that participate in the SBA program. This essentially guarantees you’ll be offered cheap and fair interest rates in the end, but individual terms may vary from bank to bank and vendor to vendor.

For this, we’ll be analysing the 7(a) SBA Loan Program in particular.

Picking It Apart

There are various reasons you may find you and your company looking for small business financing. To help clarify some of the reasons, let’s pick it apart a bit.

Equipment Financing

It almost goes without saying, but you may find yourself in need of equipment for your start up business. Luckily, if your company is focusing on any of the following:

Construction
Office and Computer Work
Food Service
Landscaping
Transportation

There are many financing options available through SBA lenders to companies needing equipment financing. Let’s face it- there’s a good chance your business falls into one of the above categories.

BAL (Business Acquisition Loans)

Business Acquisition Loans are arguably the trickiest to score since the Great Recession in 2008 (a dramatic fiscal climate that shook the business world to its core, making it even harder at times to secure small business financing). That’s not to say it’s impossible- if you can manage lower financing rates (a company that once financed up to 80{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} will more than likely not go above 50{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}) and larger down payments, you’ll be fine.

Commercial Loans

Commercial loans are arrangements typically used to finance major expenditures or help recoup operational costs that could potentially sink you into crippling debt. These are used for:

Purchasing Real Estate
Refinancing Commercial Real Estate Assets
Refinancing Businesses With Real Estate

Due to the nature of these types of loans, making deals and structuring agreements can be difficult and at times.

The Inner Workings of Fees and The Interest Rates (aka The Boring Stuff)

A guarantee fee is a fee based on the loan’s maturity and the dollar amount guaranteed, not the actual dollar amount being loaned. The lender will pay the guarantee fee initially, but they retain the option to pass the expense on to the borrower at closing.

For any loan under $150,000, the feeis set at zero percent. Any loan greater than that but with a maturity of one year or less, the fee is 0.25{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}. On loans with a maturity greater than one year, the fee is at 3{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}. If the loan is more than $700,000, the fee is 3.5{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}. There is an additional fee of 0.25{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} on any portion of more than $1,000,000.

Typically, SBA loans come with fixed or variable interest rates. It is the bank lender who determines this part of the process depending on things such as your current credit score and the current nature of the loan arrangements. To help protect you, SBA has implemented a cap on loan rates by limiting what a bank is allowed to add to the top of the base interest rates.

To delve a bit deeper, if your loan term is less than a seven year period you’ll wind up paying a rate of roughly 6-13{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}.

Where to Find Your Loan

That’s certainly a lot of information to swallow at once- all you need to do is jump start a corporate dream, right? Luckily, there are numerous fine lenders available that specialise in helping secure small business financing for companies (Biz2Credit being a great example), and even more information outlets available online that can help you understand the technical jargon of the finer details of these loan agreements.

Primary keyword: small business financing

LSI keywords:

Variants: secure small business financing, small business financing for companies, looking for small business financing

Antonyms/Synonyms: SBA Loans, business venture, financing, Small Business Administration, lender, bank lender, loan arrangements, commercial loans

Sources:

https://www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs/general-small-business-loans-7a

https://www.fundera.com/business-loans/sba-loans

http://fitsmallbusiness.com/sba-loan-rates/

https://www.nerdwallet.com/blog/small-business/start-up-business-loans-for-bad-credit/

https://www.shopify.com/blog/low-investment-business-ideas

Category: Finance