Seven sources of funding your business

Are you all ready and raring to go to launch your small business, but still lack that financial boost? There are many ways to get the capital for your business idea. I have here several really good sources for finding the funds to get your business started or to make it grow. 1. Family and Friends Some people are lucky they can borrow money from friends or family to start up a businesspared to credit cards, this doesn't put your credit rating at risk, but it surely can put your family reputation on the line. 2. Government Loans (SBA) This is short for the U. S. Small Business Administration, a government agency that helps Americans start and manage small businesses by providing loans, disaster assistance, advocacy and training. 3. Peer to Peer Lending (Prosper) Prosper is an online auction site where people can lend money directly to each other. Borrowers set the maximum rate they wish to pay and lenders set the minimum rate they want. Prosper matches borrowers with lenders and manages loan repayment. Lenders can get started with as little as $50 and borrowers can receive unsecured loans up to $25,000. 4. Venture Capital Firms A venture capital firm is a financial intermediary that pools the resources of its partners and uses the funds to help entrepreneurs start up new businesses. 5. Home Equity Loan It is sometimes called a second mortgage. Borrow from a bank or mortgage company using the equity in your home as collateral. 6. Credit Cards It can be tempting to start-up your business with money from a credit card. Be careful to at least make the minimum monthly payments to protect your credit rating. 7. Angel Investors The typical angel investor is a retired business executive or business owner. Angel investors can usually provide more money than friends or family, and credit cards. The loan usually ranges from $20,000 up to 2 million. All of the above resources are equally useful in their own rights. You just have to know which one is more beneficial to your business and situation. Choose Wisely.

Personal loan fact sheet

Types of loans There are two main types of personal loans: secured and unsecured. Unsecured loans are not tied to any of your assets, but secured loans are - usually to your property, which is why they are often called homeowner loans. If you default on a secured loan, your lender can force you to sell the asset to pay off your debt. Car loans are also secured loans, with the lender using the vehicle you are buying as security for the loan. Homeowner loans are tied to a property. Photograph: Frank Baron Most lenders offer unsecured loans of between Ј5,000 and Ј25,000, although some cap borrowing at Ј15,000. Smaller loans are available if you shop around, but if your borrowing requirement runs into hundreds of pounds rather than thousands there may be better ways to borrow the money. If you want to borrow more than Ј25,000, you will need a secured loan. You will also need enough equity in your property to secure the loan. Interest rates The APR (annual percentage rate) on a loan is the amount you will pay in interest each year. Most adverts for loans tend to quote a “typical APR”; you will not necessarily get the same rate of interest when you apply. Unless you choose a lender with a “one-size-fits-all” interest rate, factors including how much you want to borrow, how long you want to borrow it for and your personal and financial circumstances will all have an influence on how much you pay. A bank has to have offered its typical APR (or a better rate) to at least 66% of potential customers. Interest rates can be fixed or variable, and it is important to know which you are signing up for. A fixed rate will remain the same for the term of the loan, which means your monthly repayments will remain the same. A variable rate will be subject to change, usually in line with the Bank of England base rate. While this is good news when rates are falling, it can be worrying if rates go up and you need to find more money than expected to make your repayments. Repaying your loan Most loans are repaid in monthly instalments & usually by direct debit - over a period agreed before you get the money. The lender will tell you how much you need to pay each month when it agrees the loan. The repayment period is usually fixed and you will have to pay a redemption penalty - for example, two months’ interest - if you want to pay it off sooner. The longer the repayment period, the more interest you will be paying, so go for the shortest you can manage. Flexible loans, which let you borrow and pay back at will, are becoming more common, but the interest rate charged is often significantly higher. If you miss a payment the lender will record the default on your credit file. Any new lender may not be put off by one or two missed payments, but if you have missed several you may struggle to get credit elsewhere. Where to get a loan The list of organisations offering loans is long and ranges from high street banks, to those that operate only on the internet or telephone, to building societies, credit unions, specialist loan companies and even doorstep lenders. Typically, cheaper deals are offered by the specialists and internet banks than are available on the high street, but this is not always the case so you should shop around, either online or by contacting lenders to get quotes. Some Doorstep loans have interest rates as high as 900%. Photograph: Garry Weaser Possibly the most expensive form of credit is offered by doorstep lenders. Unlike mainstream lenders, they will often offer sums of less than Ј50 - typically used to cover unexpected purchases - and collect payments weekly. However, APRs can be as high as 900% so borrowers who have a choice will tend to avoid them. Credit unions are an alternative to mainstream lenders and can be an attractive option for some borrowers because they cannot charge more than 2% a month on the reducing balance of the loan (an APR of 26.8%), and most charge just 1% a month (12.7% APR). Most credit unions offer unsecured loans for up to five years and secured loans for up to 10 years. Getting into difficulty Sometimes things go wrong and it is difficult to meet your monthly repayments. If this happens to you, do not ignore letters arriving through your front door. The best course of action is to get in touch with your lender immediately. Banks and building societies are often willing to help and might offer to freeze the loan temporarily or extend the repayment period. Their ultimate aim is to recoup their money, but it is usually more advantageous, including cheaper, for them to reschedule your repayments than to take action against you. It is particularly important to be upfront with your lender if you have a loan secured on your house or another asset, because if things go wrong you may have to sell up to pay back the loan.

Loans helping or hurting your credit

All around the world, there are many individuals who are worried about their credit. In the past, a person’s credit only use to be taken into consideration when trying to obtain financing, but things have since changed. Your credit may be examined when you are applying for a job or looking to rent an apartment. Your credit score is determined by a combination of factors. One of those factors is whether or not you have taken out a loan in the past. If you have attended college, bought a house, or purchased a new vehicle, it is likely that you have obtained a loan before. If you have yet to obtain a loan, it is likely that you will need one in the future. When it comes to loans, there are many individuals who are concerned with what they will do their credit. In most cases, having a loan will help to improve your credit, but there are times when it may hurt it. Whether or not a loan will help or hurt your credit is completely up to you. If you are like most individuals, you will want a loan to have a positive impact on your overall credit score. There are a number of ways that this can be done. The first step is to do business with a reputable financial lender. Reputable financial lenders often come in the form of local banks or online lenders. You will need to make sure that your financial lender will report your payment history to a credit bureau. If you make all of your loan payments on time, you will notice that your credit score will remain solid or even improve. A few late payments may not have a negative impact, but you never know. Each lender is likely to report payment histories in different ways. That is why it is advised that you make all of your payments on time, the earlier the better. A large number of late payments may result in you receiving a poor mark on your credit report. In addition to a poor credit report marking, it is also possible that your relationship with your financial lender may turn sour. It is important to stay in good standing with your financial lender, whether that lender is your local bank or an online lender. You never know when you may need a loan in the future. You do not want to ruin your chances of being able to obtain financing later on in life by making a number of late payments on your loan. If you know ahead of time that you will be unable to make a loan payment, it is advised that you contact your financial lender. In addition to improving your business relationship, it is likely that your lender may be able to provide you with alternative payment options. The worst thing that you can do is avoid the situation altogether. There are many individuals who get so far behind with their payments that they just do nothing. This will not make your situation go away; in fact, it may make it worse. Making on time loan payments is often easier said than done. Before you obtain a loan, you are encouraged to make sure that you can afford to make payments. If you feel that you may be unable to afford monthly payments, you are encouraged to rethink applying for a loan. It is important to take into consideration your future and what a poor credit score could do to that future.

Instant car loans benefits of car loans online

In a hurry to get approved for a car loan or just don’t have the time to schedule a visit to the bank? Instant car loans have become popular as more people are doing their loan research online. The more you know about applying for a car loan and what rates to expect, the better prepared you will be in choosing a lender. Many customers prefer online car loans because they are quick and convenient. After comparing loan rates in the comfort of your home, you can often be approved by the lender of your choice that same business day. Some lenders can even approve the loan within an hour or two. If you need a car but have little time to shop, an online car loan is right for you. Interest Rates Online lenders are well known for their low interest rates. Like home loans, you can apply for an auto loan and receive the rates of different lenders. This makes it much easier to compare different lenders without having to contact several companies. By applying for an instant car loan online, both the customer and the company benefit. The customer will most often receive rates that are lower than those offered at their bank or local credit union. There is no charge for filing an application online. There should be no surprise hidden fees or costs involved. The lending company will save time and money by being able to complete the application quicker and with much less assistance required. Lenders are able to process online applications at a much cheaper rate than an application filed in person. It takes fewer employees and less time to process online applications. The savings from the lending company are then passed on to the customer. After you have been approved for an auto loan online, your loan interest rate will usually be locked in for a period of at least thirty days. At any time during the lock in period, you can take you bank draft or check to the car dealership to make a purchase. Even if you are uncertain about what type of car to purchase, it cannot hurt to get pre-approved. Your bank draft should be honored at any car dealership thus allowing you to further compare prices.

Escape the humiliation of a credit check with no credit check loans

Much to the chagrin of borrowers with a bad credit, any loan is sanctioned only after the lenders conduct a thorough check on the borrower’s financial antecedents and his credit history. The borrowers with a poor credit find the process of credit check quite humiliating and they detest it because it shrinks their chances of getting a good loan offer. The idea of a loan without any credit check comforts them very much. But, it is a risky proposition for lenders, because they have to lend their money without having any background knowledge about the person’s creditworthiness. No credit check loans can be of two types - secured and unsecured. Secured no credit check loans take the home or any other property owned by the borrower as the collateral. The loan amounts in case of secured no credit check loans are proportionate to the value of the collateral. Secured no credit loans provide a large sum and have lower interest rates. The typical APR’s for a secured no credit check loan range from 8% to 20%. The repayment terms can also go up to 20 years in the case of secured no credit check loans. The unsecured no credit check loan do not use any collateral. This type of loan does not pose any risk on the home or any other property owned by the borrower. It is also available to those who do not own any home and live as tenants. Unsecured no credit check loan appears as a risky investment for the lenders. So they charge higher rates of interest on such loans. The typical APR varies from 16% to 30% and the loan amounts are also very small, usually below Ј1000. Unsecured no credit check loans have to be repaid within a few weeks. The repayment of this loan coincides with the salary or paycheck dates. No credit check loans can be used for any purpose by the borrowers. They can use it for any home improvement plan, for financing a car, funding a much needed weekend vacation or for that morale boosting cosmetic surgery. In fact, good lenders do not impose any restrictive preconditions on the usage of the loan amount. In the absence of a credit check option the lenders look at other avenues to ensure the viability of the borrower. Lenders ask for proofs of employment and duration of the employment before giving any no credit check loan. By enumerating a minimum salary limit on the borrowers, lenders make sure that they are dealing with people who are financially stable to a certain extent. The salary of a borrower is a deciding factor for judging the amount of loan in the case of unsecured no credit check loan. To get a good deal on no credit check loans a borrower must search for the right offers. In this IT enabled world it is very easy, because a borrower can get quotes and compare APR’s and other loan parameters at the click of a button. Almost every lending and financial institution has a website and a toll free number. A fast response is guaranteed if a borrower applies online, with all the relevant details. Of course, the loan on offer is a no credit check loan, but if the repayment schedule is followed faithfully and the loan is cleared within the stipulated time frame, it can boost a borrower’s credit ratings. This can take a borrower out of the quagmire of bad credit and help him establish a positive credit history.

A guide to bad credit home equity loans

You can obtain a home equity loan even if you have faced bankruptcy or have a bad credit rating. There are institutions that cater to this segment, however, interest rates and terms are likely to be stiffer. Additional fees also could be charged. The lender may offer high down payment and lower interest burden or vice versa. Loans with both fixed interest and variable interest are available. The maximum repayment time may be up to thirty years. Usually lenders depend on reports by credit rating agencies like TransUnion, Equifax, and Experian, together known as FICO, to evaluate an individual's credit rating on a scale of 300 to 900. The factors considered by these agencies include, past payment history, recent credit applications, and outstanding debt. A score below 600 indicates that you are in the bad risk group. It is possible that the rating of the same person given by each FICO agency differ. Some lenders score in the middle range. There are ways and means of improving the FICO rating. Certain banks also offer credit counseling. Agencies approved by the U. S. Department of Housing &Urban Development (HUD) too give free counseling, including review of your financial situation. Some lenders may not even bother with FICO ratings. In such cases the maximum loan would be only 70 percent of the net value. They may insist on the borrower paying off some of the outstanding debt with the money loaned. Do some research and see what different lenders have to offer. Don't blindly believe everything that is said. Study them, ask questions; there is no need to feel timid about your present financial situation. And be careful. There would be people waiting to exploit your seemingly desperate situation.

Student loan consolidation rates set to increase on july 1

Congress voted on and passed Feb. 1 the Deficit Reduction Act of 2005 that included massive cuts to federal student loan programs. The $11.9 billion in student loan cuts, including changes in laws regarding student loan consolidation, will negatively impact those students seeking a college education and others seeking to consolidate their higher interest loans. The industry expects a rush of students seeking to consolidate at the current low rates that are set to increase on July 1. The Deficit Reduction Act of 2005, S. 1932, was narrowly approved Feb. 1 by the House of Representatives. Passing by a two-vote margin of 216-214, S. 1932 was signed into public law Feb. 8 by President Bush, thereby approving the $11.9 billion in student loan cuts over the next five years. Students and graduates now are in jeopardy. With college costs increasing every year and the forthcoming higher interest rates on student loan consolidation, college students are rushing to consolidate before the July 1 rate increase. Student Loans Take the Hardest Hit The cuts to federal student loans are the worst among cuts to other federal programs including Medicaid, Medicare and food stamps. A majority of the legislation's provisions to student loans will take effect on July 1 and others will be implemented over time. Some provisions include an increase to 6.8 percent for federal Stafford Loans, from rates as low as 4.7 percent. PLUS fixed interest rates will jump to 8.5 percent, from 7.9 percent. The legislation leaves consolidation loans current fixed rate in place. Consolidate Student Loans Before July 1 Rate Increase With student loan consolidation rates set to skyrocket on July 1, now is the time for students and graduates to consolidate, according to NextStudent, the Phoenix-based education funding company. Students and graduates now are urged to consolidate as current consolidation rates can be as low as 2.75 percent with benefits applied. Other incentives to consolidate include a longer payment term, one monthly payment and no prepayment penalties. The following are other provisions affecting student loan consolidation that take effect July 1, 2006. Students and graduates should be aware of the new regulations so that they now can take action: Consolidation Loan Changes - Single holder rule is not changed - Eliminates in-school and spousal consolidation options. - A subsequent consolidation loan may be made in the DL Program only if the FFELP borrower wishes to obtain an income contingent repayment plan and, the borrower is trying to avoid default, but that is conditioned by the requirement that such a loan has been submitted to a guaranty agency for what used to be called "preclaims assistance" but is now labeled as "default aversion." - Also, in the Conf. Rpt. is a provision providing that only if a FFELP borrower has an application for a consolidation loan rejected by a lender or the application is rejected because the borrower wanted income-sensitive repayment terms, then the borrower can receive a direct consolidation loan. - A borrower with a defaulted loan can receive a DL consolidation loan to resolve the default. - Unless otherwise specified the terms of DL consolidation loans are the same as FFELP consolidation loans. Approval of the Deficit Reduction Act brings major cuts to student loans and a change in regulations regarding student loan consolidation. Although the legislation has changed to the detriment of those seeking a higher education, students and graduates still have the option to consolidate before the interest rate is set to increase on July 1.

Rest of small business funding know how

: Whether you're planning to launch a startup or want to expand your business, you are going to need money. Debt and equity financing are two different financial strategies you can opt for. Incurring debt entails borrowing money for your business, whereas gaining equity means injecting your own or other stakeholders’ cash into your company. Debt Financing Quite a few business owners are reluctant about borrowing from a financial institution, as it means cut in cash profits. But it could be a good option so long as you have sufficient cash flow to pay back the loans, plus interest. Equity Financing Small business owners often opt for equity financing because they are not sure about qualifying for a loan, or they don’t want to part with cash profits to service the repayment. Investors and partners can provide equity financing. Advantages of debt financing: • You do not have to part with any ownership or future profits of your business. Your lender has no control in how you run your business. • You can keep your business profits in the company, and enhance the long term value, or use those profits to pay a return to the owners of the company. • You can avail tax deduction on interest paid. Disadvantages of debt financing: • You have to maintain sufficient cash flow to repay the loans. • You will be using your cash profits to pay back the loans. You may earn profit but there won’t be cash to show for it. • The riskier the loan is, the higher the interest rate will be. • You might have to furnish some sort of guarantee as owner of the business. • Lender has rights to seize your collateral, in case of non repayment. • Too much debt might affect your credit rating and your ability to raise money in the future. Advantages of equity financing: • Equity contributions do not have to be paid back even if your company goes bankrupt. • Your business assets do not have to be pledged as collateral to obtain equity investments. • Businesses with sufficient equity will look better to lenders, investors and the IRS. • Your business will have more cash available because it will not have to make debt payments. Disadvantages of equity financing: • You will have to part with some of the ownership stake, and your business’s profits will be shared by other equity investors. • You might have to contend with different ideas on how to run the business. • No tax deduction on dividend payments. Most businesses have a mix of debt and equity financing. Too little equity could prevent you from securing or repaying loans, while carrying little or no debt could indicate that you are too risk-averse, and that your business might not grow as a result. Business Cash Advance, a Good Alternative: But is there any alternative to loans so far as the small businesses are concerned? Yes, there are many other companies that are offering business cash advance to small business owners. Business cash advance is not a loan and the organization offering this cash advance gets their money from the credit card sales that the business does in a specific period, there by reducing the burden of paying back the loan and the terms and conditions to qualify for such cash advance are also relatively simple. There are quite a few organizations which provide such cash advances. Organizations like MerchantCashDirect usually provides cash advance for working capital needs. They more often than not, target specific industries. To expand the example of above mentioned organization: They seek to provide funds to people into restaurant, retail or service industry processing at least $4000 in credit card receipts per month. I hope that I helped clear some doubts and given some useful information through my articles. If information is power, you are now empowered to succeed in your endeavor to secure loan, there by realize your dreams.

Improve financial health through bad credit debt consolidation

People tend to fall in debts in these days of easy availability of finance and liberal use of credit cards and as a consequence are labeled as having bad credit. Primary concern of these people is to eliminate debts as early as possible. An effective and popular way of eliminating previous debts, bad credit debt consolidation makes available required finance at easy terms and conditions to pay off debts. Lenders provide loan for bad credit debt consolidation taking into account different financial backgrounds of borrowers. Borrowers are called having bad credit for various reasons. Such borrowers may have filed for bankruptcy; they may have faced payment default cases and county court judgments. This adverse credibility is reflected in borrowers’ credit score. FICO credit score ranges from 300 to 850. A bad credit is when credit score falls to 580 and below while a score of 720 and above is considered as secure for a loan offer. Though it is obvious that you have bad credit and your credit score is in negative territory, still before going for bad credit debt consolidation, it would be better if efforts are made in improving credit score. Lenders may relax terms and conditions if seriousness towards clearing debts is evident. Pay those easy debts for credit score improvements. Bad credit debt consolidation is opted for clearing all debts in one time payment. The borrower takes loan that is at least equal to the amount of debts and pays off them either himself or through the new lender. There are many advantages of bad credit debt consolidation besides being debt free. Normally debts are of higher interest rate and therefore it results in higher monthly outgo towards installments. Since bad credit debt consolidation is done by taking a fresh lower interest rate loan, lots of money may be saved. As an alternate to monthly installments, borrowers can take a lump sum amount and clear debts in short period to save money on interest. Another method to lessen monthly installments is to pay interest only during debt consolidation loan period and pay balance at the end. At what interest rate loan for bad credit debt consolidation can be availed will depend on repaying capacity of the borrower. Though loan for debt consolidation is generally offered at lower interest rate, still if he produces proof of sound financial standing or any source of steady income, lender may considerably reduce interest rate. The biggest advantage of bad credit debt consolidation is that it enables borrowers in improving their credit score. Every monthly installment towards clearing off debts is recorded in credit report of the borrower. Prefer applying online as this way you get numerous loan offers from as many lenders. You can easily pick up suitable loan package that has lower interest rate. Bad credit debt consolidation enables you in eliminating all debts at low cost and in turn it improves credit score and credibility in the eyes of lenders. Make sure to pay monthly installments in time to avoid falling in yet another debt trap.

Bad debt personal loans easy way to finance your needs

Bad debt is no more considered a blot on credit report of an individual. Lenders now know that majority of the people fall into bad debt trap for no fault of theirs. Many lenders now offer loan to people with default, arrears or bankruptcy. So even if you are going thorough a lean phase you can avail a bad debt personal loan for a variety of purposes like buying a car or going on a holiday. Borrowers, however, use bad debt personal loan mostly for paying off previous debts. In fact, previous bad debts are of big concern to any borrower and he wants to get rid of them as early as possible for different reasons. One reason may be that the debt was taken at a higher interest rate, which is crushing the borrower financially because of the larger outgo. On availing new personal loan at a lower interest rate, he can pay off those previous bad debts himself or can ask the new lender to do the job. Moreover one saves valuable time that goes waste in going around to visit the different lenders just to pay the installments. Those bad debts may also be impacting the creditability of a person adversely. To improve it, there is no other better way than to take bad debt personal loan. A better management of previous debts surely helps him in many ways. However, lenders usually become cautious while offering loan to such borrowers because of their previous bad debts. To assure the lender that he can safely lend the money, the borrower shall have to put some property as a collateral with the lender. Any property such as home, car or even a saving account serves as a collateral. When opting for a secured bad debt personal loan one makes use of the equity in the property without selling it. This enables the borrower in not only getting the desired rate of interest but the required amount as well. Usually lenders provide bad debt personal loans in a range of Ј5000 to Ј75000.If the borrower is in need of a higher amount then the lender will look for the value of the property placed as a collateral. Higher the value, higher the amount one may get as loan. Lenders offer loan to such borrowers for a period of 5 to 30 years. This long duration enables borrower to choose a repayment term that suits him the most. However, lenders usually give maximum repayment term to those borrowers whose collateral in the form of property is of higher value. But, it is the interest rate that is of main concern to a bad debt personal loan seeker. The lender offers bad debt personal loan at a higher interest rate, as risk potential in such loans is higher. But there is a solution to this problem. Such borrowers can extract a lower interest rate if they put down some more cash payment. So, one strategy is to save as much as possible for a down payment. This way the interest rate may come down to desired level. For bad debt personal loan seekers it would be good if they compare rates of interest of different lenders to get a rough idea of which lender has a competitive package for them. The interest rates are offered online by many lenders. Once you have compared the rates you can request specific quotes from a handful of lenders. These tips may be of a big help to borrowers who have bad debts and are looking for a new lender to finance their requirements. They can hunt for lower interest rate and larger amount as well.