bookmark_borderTypes of Credit Lenders

When you do this your personal credit isn’t even looked at nor is it used for the lending decision but this is about the only exception in the business funding space.

All other funding types including advances look at and care about your personal credit. YES, you can get approved for cash flow financing and merchant advances with bad credit but your repayment terms won’t be nearly as favorable then if you had good personal credit.

SBA loans, conventional loans, most other long term loans, and credit lines do require good personal credit for approval in most cases. Collateral and asset type based financing doesn’t care about personal credit as much. This is if financing only looks at collateral for approval, not financing where collateral is required for approval.

There is no FCRA in the business world, so lenders will never disclose to you that they pull your business credit when you apply for business financing. But they DO pull your business credit!!!

Just think, you are applying for money for your business, and your business has its own credit profile and score. So of course they will want to see how the business pays its bills on top of how you do as the owner. There is A LOT of money available for business owners, more now than there has ever been in the past. You just need to know what type of financing to go after, once you know that you can more easily find what you need.

Not having establishes business credit makes you look like a rookie, a startup, a “non-established” business. This will lead to denial so insure you have at least 5-10 reported accounts and that you are paying them as agreed.

You actually have three types of credit: Personal Credit, Business Credit and Bank Credit. All three should be good to give you the best chance of approval.

bookmark_borderFast Cash Loans

Positive Features

Fast cash loans, true to their nomenclature, are really fast to come, as these are generally approved within a couple of hours, and they never take more than 24 hours to reach you. You can find many lenders online, and that makes it easier to make a choice for the mailing of your loan application. Of course, you can access those lenders in person too, but you’ll agree that an online contact is quicker and more convenient. Depending on your monthly earnings, lenders may offer your loan varying from just $100 to $1,500.

Such loans may be unsecured or secured. As you can guess, secured loans carry lower rates of interest and other fees, compared to unsecured loans. However, processing secured loans could take a bit longer due to the collateral offered by the borrower, as the lender would surely get the worth of the collateral assessed before approving the loan.

Unsecured loans, on the other hand, are approved very fast. In their case, the credit rating of the borrower is the deciding factor for the approval of loan. That happens because the lender is taking a higher risk. Good credit rating helps, as the lender would consider you capable of paying your dues within the prescribed time.

You can get two options for paying back your fast cash loan. One options is to pay back your dues to the lender through installments, the other is to ask the lender to withdraw the payments against the loan, plus the interest, straightway from the bank with which you have an account. You will find it helpful to realize that, generally, the date for paying back the loan is purposely scheduled on the day you get your paychecks.

Negative Aspects

The most important drawback of availing fast cash loan, especially the unsecured kind, is the unusually high rate of interest charged by the lenders. Another problem is the fact that, if you are unable to payback your dues as per the agreed schedule, you are forced to pay hefty fines.

Except for the above mentioned features, there are no other drawbacks of availing fast cash loans. Yet, both these drawbacks can be taken care of toa great extent by paying back your loan in time, and offering collateral at the time of taking the loan.

bookmark_borderStop Putting Off Important Financial Decisions

It is never too late (or too early for that matter) to start addressing one’s financial issues. By recognizing the need for a sound financial plan, you will be able to stop putting off important financial decisions while meeting both your current and future financial needs in the process. For all intents and purposes, this is our some list of financial reasons people tend to put off:

  • Automating one’s finances – helps individuals get into the habit of automatically saving a small percentage of their income on a regular basis.
  • Building an emergency fund – financial advisors recommend finding a savings account that offers the highest yield and making regular contributions to it.
  • Deciding when to retire – if you haven’t reached your 40’s yet, you should start saving towards retirement now because the element of time will be your best friend.
  • Deciding where to retire – you should have a plan in place for where you want to retire, otherwise you may be forced into taking what is available.
  • Developing a debt pay-off plan and sticking to it – there are a number of ways that you can prioritize your debts and start paying them off, but no matter what type of plan you develop, you need to stick to it.
  • Having life insurance – this is another financial decision that people oftentimes procrastinate about and one that could financially cover their family members in the event of their demise.

bookmark_borderImmutable Laws of Money Control

One day, a boat filled with sailors rowed past the cliff. A sailor spotted the goat, grabbed a bow and shot at him. As the goat lay dying he gasped “I thought my enemies would come by land. I never thought to look out to the sea”

Wealth is only guaranteed when your personal money making machine is made up of effective money generation and money retention system. A defect in either of these systems makes you vulnerable to poverty and financial failure. Unfortunately most people intending to make money often concentrate all their efforts on generating money with little or no attention on controlling money. This is like trying to save the life of an automobile accident victim by doing everything to get him to the hospital without stopping blood flow from his body. The truth is: he is likely going to die faster due to loss of blood than due to the injury sustained. You will remain poor more as a result of lack of money control skills than due to lack of money generation skills. This is true for individuals as well as for organizations.

Think about it this way, every time you save $100, you are automatically $100 richer. But every time you need to make $100 you will need to spend some money in other to make it, sometimes as much as $ 80. Therefore preventing yourself from losing $100 might be equivalent to making $500 or more. The first and most important skill of enduring prosperity therefore is money retention skills.

If you ask most people if they are good at controlling money, their answers will be a resounding yes. But this approach will give the kind of result you will get if you ask children if taking ice-cream is good for their health. The best way to know if you have money control problem is to answer the five questions below as sincerely as you can with a yes or a no. No one else needs to know what your answers are, but being sincere with yourself will put you on the path of enduring prosperity.

  1. Do you regularly find yourself in short-term and long-term non-business debt? E.g. You always have to borrow money or apply for IOU before the end of the month
  2. Do you find yourself borrowing money from people who earn less income than yourself? E.g. Sub-ordinates or non-working parents
  3. Do you find yourself usually involved in regret expenses? These are expenses you incurred and wished you had delayed for more important expenses
  4. Do you find yourself usually involved in emotional purchases or expenses? Buying things or spending money not because you need to but because of what people will say
  5. Do you find yourself regularly unable to meet expected and predictable bulk expenses such as: Children school fees, Maternity bills, House rents, Major car repairs
  6. Do you find yourself regularly dreaming of jackpot or sudden financial breakthrough and therefore frequently participating in different types of lottery or lucky dips

bookmark_borderFinding Financial Advisor

The fiduciary standard legally obligates advisors to put your interest before their own. Advisors that work under a fiduciary standard must disclose any conflict of interests and share with you whether they benefit from recommending any products or other professionals. They must be transparent as to fees the advisors gets for that advice.

In contrast, the suitability standard is a standard requires advisors to suggest investment products that are appropriate for you. There is no standard to conclude that the investment will help you achieve your goals or is in your legal best interest. Also, there is no requirement to fully disclose any conflicts of interest, potentially allowing an advisor to recommend products that may provide higher commissions for themselves instead of similar products with lower fees.

There are wonderful advisors and poor advisors that work under both the fiduciary and suitability standard. We work under the fiduciary standard and highly value the trust we know it provides.

An advisor’s professional designations and experience matter. It gives you great insight as to the advisor’s knowledge and areas of expertise. There are over 100 different types of credentials and they can be very confusing. If you are looking for a financial advisor, you might be well served to at least be familiar with these three credentials that reflect a broad level of training and commitment:

CFP® – CERTIFIED FINANCIAL PLANNER ®

CFP® professionals have completed university level financial planning coursework, met experience requirements, and passed the CFP® board’s rigorous exam covering 72 topics ranging from investment and risk management to tax and retirement planning, legacy management and the integration of all these disciplines. They also commit to ongoing education and a high ethical standard. More information: http://www.cfp.net

CFA® – Chartered Financial Analyst ®

To earn the CFA credential, professionals must pass 3 rigorous exams, each of which demands a minimum of 300 hours of master’s degree level study that includes financial analysis, portfolio management and wealth management. Professionals must also accumulate at least four years of qualified investment experience and annually commit to a statement of high ethics. More information: www.cfainstitute.org

CIMA® – Certified Investment Management Analyst®

CIMAs focus on asset allocation and portfolio construction. The program of study covers 5 core topic areas and applicants must meet experience, education, examination and ethical requirements. CIMAs must also commit to ongoing professional education. More information: www.imca.org

Make sure you seek out an advisor and firm that fits your needs. If you need someone to help you with your investing, you might seek out a firm that has a range of investment solutions such as an asset management firm.

If you need help assessing your current circumstances and creating a plan for you to reach various goals in your life, you might seek a financial planner. This advisor can help you consider retirement and college needs, tax strategies, risk management and possible wealth transfers.

If you need both financial planning and investment advice, then you should seek a wealth manager. This advisor has broad expertise and takes a holistic approach to guide you through comprehensive planning and portfolio management.

Don’t be shy; ask about fees! Every professional deserves to be paid for their expertise and services. By understanding how the advisor is compensated, you can determine whether the advisor’s interests align well with yours.

Commissions only – these advisors are compensated based on the investment products you choose such as mutual funds, structured products, insurance policies or annuities they buy or sell for you.

Fee only – Independent advisors often offer fee only advising. Their fee is often stated as a percentage of the assets they manage for you so that they, too, benefit if your portfolio grows and are penalized when it declines. They may also offer fixed fees for specific services.

Fee-based – these advisors may charge a fixed fee for financial planning services they provide and collect a commission on any financial product you buy or sell. These may include mutual funds, Real Estate Investment Trusts (REITs), annuities and insurance.

bookmark_borderMistakes Most Investors Make

Improper Asset Allocation

Most investors have their assets dispersed with several advisors and several financial firms. No single advisor knows what the other is doing resulting in an uncoordinated portfolio. One advisor in firm A might be selling the very asset that an advisor in firm B is buying. Unless there is one coach reviewing the entire portfolio, then your money is not coordinated.

Your asset allocation should always reflect your current position in life, your current goals, future, feelings and family characteristics. When your hard earned money is scattered to other advisors and institutions, you alone are left to properly manage your portfolio. Many individuals are not trained to monitor this correctly and consistently. Unfortunately, the overall plan suffers.

Improper Correlation Within Investments, Managers and Funds

Without saying, each investment needs to be excellent on its own. The investment, manager, or mutual fund needs to have a strong track record (I like a ten-year record). You might be able to select quality investments. That’s not the problem. Where the breakdown occurs is knowing how these investments interrelate. This is nearly impossible to track when one advisor is doing one thing, and a different advisor is doing just the opposite.

Let’s think about a recipe analogy. You might have the best ingredients to make your favorite dish. You might even have quality chefs at your beck and call, ready to make this dish for you. If you put all of these chefs in the same kitchen, but don’t let them know what the other is doing, a culinary disaster awaits. You can see that the likelihood of your dish coming out correctly is very low, no matter how good the ingredients were. Same is true with your investment portfolio.

Failure to Monitor the Consolidated Portfolio

You know life is not static. Life is constantly changing. Whether it’s your job, children, the economy, world events, new laws, unplanned expenses (and the list goes on and on), your world constantly moves. Your entire portfolio needs to be dynamic as well. When market forces move, the properly managed portfolio needs to move with it. I am not talking about day-trading, but rebalancing when and where appropriate. Additionally, your goals, future, feelings and family characteristics are changing as well. Every day is either a day closer to your goals, or not.

bookmark_borderFactors That Impact Max Credit Score

  • Your Residence – Creditors also want to know where you live. Owning your own home, whether or not it is mortgaged, is a definite plus. They’ll also take into consideration how long you have lived at your present and past residences. Moving often does nothing to help. But if you have generally lived at a particular residence, whether owned or rented, for at least two to five years between moves, you are considered to be a more responsible and stable individual.
  • Your Marital Status – Being married has a positive impact. Creditors consider a single person a higher risk, so being married is better when it comes to your credit record. But don’t get married just to improve your credit. If you are a married person with 1 to 3 dependents, creditors consider you to be a lower risk and so you’ll have a better chance of obtaining credit when you need it. Why? Possibly because you are seen as a more responsible person if you are married with children.
  • Your Open Credit Accounts – The number of open credit accounts you have impacts your credit score. Ideally, you should have 4-6 credit cards and one installment loan. As a general guideline, opt for 2-3 major credit cards and 2-3 store credit cards. An installment loan can be an auto loan, student loan or a small installment loan arranged through a credit union (emphasis on small).

The two things you should be able to see here are stability and responsibility. Creditors extend credit to those they see as having a stable job, living in a stable home, having stable relationships and showing a stable credit history. In order to obtain stability, you need to learn responsibility. This is not to say there aren’t other factors that affect your credit score, but this article is intended to give you a general idea of some of the factors that do impact your score. Again, you can attain your max credit score by learning what affects it. Having bad credit is not a sin, but that should not deter you from taking steps to improve it.

 

bookmark_borderBanking Transactions

Fixed deposit account

A customer can deposit his money with a bank for a fixed period. Such an account is called ‘Fixed Deposit Account’ . The period in fixed deposit account usually varies from three months to five years. The amount deposited cannot be withdrawn before the expiry of the fixed period. The bank normally allows as higher rate of interest on fixed deposits. The rate of interest increases with the period of deposit.

Saving Bank Account

A saving bank account provides limited withdrawal facility and carries a moderate rate of interest on deposits. Interest is allowed on the savings bank account on the lowest credit balance kept in a particular month.

Bearer and Order Cheques

A cheque may be made payable to a bearer or to order. A bearer cheque may be made payable to the bearer i.e. it can be encashed by any person who presents it to the bank for payment. The bank is under no obligation to ascertain that the payment has been made to the right person. An order cheque on the other hand is made payable to a particular person or order. An order cheque can be transferred only by endorsement and delivery.

Crossing Cheque

When a cheque is to be sent through post, it is desirable to draw two parallel lines with or without the words ” & Co.” between the lines. This is called crossing the cheques. Crossed cheques cannot be encashed at the counter but can be collected only by a bank from the drawee bank. If the payee has no banking account, he must get a person possessing a bank account to cash that cheque for him. Crossing thus provides a protection and safeguard to the owner of the cheque as by securing payment through a banker it can be easily detected to whose use the money is received.

Crossing may be general or special. A general crossing is one where two parallel lines are drawn across the face of a cheque with or without the words’ & Co.’ but not including the name of a bank.

Where a cheque is crossed generally, the paying banker shall not pay it except to a banker. Sometimes the words ‘Not negotiable’ appear in crossing. These two words do not meem that the cheque cannot be transferred. It simply means that the person holding such a cheque gets no better title than that of his transferor and cannot convey a better title to his own transferee. Sometimes the words ‘Account Payee only’ are inserted between two parallel lines constituting a crossing. This is a direction to the collecting banker to collect the cheque and to place the amount to the credit of the payee only.

A special crossing is one which requires the name of the bank to be added across the face of the cheque either with or without the words ‘not negotiable’. A special crossing makes the cheque more safer than a general crossing because the payee or holder cannot receive payment except through the banker named on the cheque. Special crossing may take anyone of the following forms.

Endorsement

Endorsement is the act of signing a cheque for the purpose of transferring it to somebody else. Under Negotiable Instruments Act it means the writing of ones name on the back of the instrument or any paper attached to it with the intention of transferring the rights therein. A bearer cheque can be transferred by mere delivery but an order cheque is transferred by endorsement and delivery. Endorsements are usually made on the back of the cheque, though they can be made on its face as well. If, however, no space is left on the instrument, it may be made on a separate paper attached to it.

Endorsement on the cheque must be made in proper fashion, otherwise the bank will not pay it.The endorser’ must sign his name exactly as it has been written on the cheque. He must sign his name with the same spellings as already appear on the cheque. He may, if he, likes put down the correct spellings after he has signed in the manner already appearing on the cheque. Where a cheque is endorsed on behalf of a company, a firm or some other institution, the person signing the endorsement must so sign as to make it clear that he is so doing on behalf of the company or the firm and not in his personal capacity.

bookmark_borderPayday Loans and Installment Loans

Payday loans are those that can be anywhere from a hundred dollars to fifteen hundred. They are meant to be short-term and paid back in 30 days or even less. Typically, the pay back is due on the upcoming payday. This is where things get tricky for the consumer as they find themselves short on the next payday, then the next. It’s best to only use this type of loan if extra funds are coming in.

The loan is usually set up by post-dating a check or by automatic withdrawal after the borrower’s paycheck has been deposited into the account used to secure the loan. There is a fee charged, and it’s usually a very high percentage so it’s best they be ready. Further, the loan is unsecured and the lender will take into consideration the borrower’s ability to repay before approving.

If for some reason the borrower can’t pay back the loan will have more fees tacked on and it will be owed in another 2 to 4 weeks.

Installment loans for poor credit $150 to thousands of dollars. They carry principal, interest and finance charges to include insurance and fees. All of it is repaid in monthly installments that are fixed and set over a set amount of months. The APR is higher than that listed on the contract usually because of the various types of credit insurance, so that’s something to pay attention to.

Another important note on installment loans for poor credit is that they can be renewed in as little time as every few months with new interest charges, credit insurance and fees. In most cases, the loan amount will reset to the first amount borrowed, and sometimes it’s increased. To secure the loan one will need to use property such as a car, electronic device, firearm, jewelry or other higher priced items. Real estate can’t be used as collateral in installment loans for poor credit.

Using this information, anyone that is looking to decide between either a payday loan or an installment loan for poor credit can make a better decision based on what they need and what they can work with. Both options can work when one is strict with repayment and keeps on top of the terms. It does take a lot of discipline, especially with a payday loan or one may find themselves in that endless cycle of borrowing and repaying.

For those with poor credit, it is a great option and can completely satisfy the immediate need for cash should that circumstance arise. As with any agreement involving money, reading and analyzing the fine print and using a well-known lender is a smart move.

bookmark_borderPersonal Finance Wealth Creation Strategies

IRA’s and 401k’s are two very common ways to put money away for retirement. When you put money into these two vehicles it is put away pre-tax. You don’t have to include the money you put into these accounts when figuring out your taxable income. The money you place in these funds will then be invested in stocks and mutual fund. Hopefully, by investing in these underlying investments your retirement account will continue to grow tax free. You will have to pay taxes on the money when you use it during retirement. For a full description of how this works, talk with your accountant or investment professional.

Investing directly in stocks and mutual funds. This is one of the most common ways of getting more savings for your retirement. Many people think that investing in the stock market is like gambling and that it is very risky. The truth is, if you are willing to take some time to learn a little bit about the process (no one is expecting you to become an expert, just know enough to ask questions and be informed) you will greatly eliminate much of the risk. Risk comes from making poor choices and making poor choices usually comes from lack of knowledge and just following along and taking advice from someone who often knows little more than you do. Mutual funds are professionally manged and you can find various funds to invest in. Again, knowledge is power. Even if you work with a financial consultant, having some knowledge of how your money is being invested is just a smart thing to do… after all, it is your money. No one is going to care about your money as much as you do!

Real estate. Again, many people will think investing in real estate is risky, but if you know what you are doing you will greatly reduce the risk. There are a few ways to invest in real estate one of the most common is to buy rental properties and rent them out. This provides you with an ongoing cash flow. That cash flow than can be invested in still other ways to ensure it’s continual growth. I personally feel it is a mistake to just turn your money over to some “professional” and hope for the best. I think it makes more sense to learn a few basic skills so you can be a partner in all wealth creation strategies. This is the best way to ensure your money grows the way you want it to.