Post about "Finance"

Reasons to Apply For a Commercial Loan

When you’re starting out in business, you might think that the capital you set aside to get started in business is all you are going to need. You plan to turn your profits back into the company and grow using your proceeds as funding. The truth of the matter is – most expansions cost a lot more than just your profit can handle. Commercial loans, even when used for the short term, are an essential part of growth. Let’s look at some of the main reasons you would want to apply for a commercial loan.First, purchasing or leasing new properties is costly. If you are looking to add new locations for your business, you will need to take out a commercial real estate loan. Banks expect this when companies are ready to expand, and that makes commercial real estate loans some of the most common kinds of commercial loans available. Being able to demonstrate a profit and a positive outlook for that to continue are important for the bank to consider.Second, if you need to buy new equipment or you are adding equipment to current or future locations, you may need a commercial loan. You may wish to consider leasing over purchasing, depending on how long you intend to keep the equipment. If it would be for as long as or longer than the loan term, then a purchase makes sense. You also can take the depreciation tax deduction as long as you are able to.Third, you might find that you need to add to your inventory, especially around the peak shopping seasons if you are a retailer. You might want to consider a very short term loan to purchase your inventory, then pay off the loan after your successful Christmas season or back to school season.Fourth, you may just need a boost to your general operating capital. These types of loans can help you weather rough financial times or get you started. Because these are more risky types of loans, the interest rate charged on them will be higher than on the short term inventory loans or even a real estate loan. But, when a business needs it, the loan is essential and can be the difference between making it or not making it.Fifth, there is your vehicle fleet to consider. You might have started your delivery business with your own pickup truck, but as you grow, it’s time to think about a bigger vehicle that is branded for your company. Here again it might be worthwhile to lease instead of purchase the vehicle, especially if you want to turn in the vehicle every two years and get a new one.All of these are kinds of debt financing. There is also equity financing, the kind businesses get from venture capital firms that typically confer a partial share of ownership to the capital lender as collateral. These are often the kind used for business owners (or potential business owners) who don’t have much startup capital of their own.Still, getting a financial boost from a commercial loan is not something to undertake lightly. Think things over, consider where you are now, where you want to be in five years, and where you want to be in ten years. Then, talk things over with a financial advisor to get his or her expertise and formulate your plan. Good luck, and may the growth be with you.

Money for a Car: A Guide to Auto Financing

Nobody wants to be the dumb buyer in a car buying deal. You have to be smart or you end up losing more money than you ought to. It is a very common scheme among car buyers to first get money in order to buy a new car.The term is called “auto financing” and it simply means how you pay for a vehicle. You can finance a car by taking out an auto loan to own a car, in which case, you have two options: You either use the money from the loan to buy the car, or use it for lease.If this isn’t your first time buying a car, you might already know that the salesman or your car dealer will be checking your credit report before starting with the negotiations. But this is not the only way you can go to get that new car of yours. The seller will try to sweeten the deal and offer you special car finance situations in exchange for throwing yourself totally at his mercy. That is not a path you have to choose.The key is preparation. Knowing what auto financing options you have before you get to the dealership will mean that you can take charge of your credit and take charge of your car loan.Just remember, when you negotiate with the salesman for the most favorable auto loan, nothing is permanent until you have it in writing. So haggle and then haggle some more. Once negotiations seem to be over, that’s when the sales contract is prepared.Inflated Interest RatesTo have the deal agreed upon by you and the salesman be put in writing in a binding contract is top on the list of the things you must do involving auto financing. Often involved at this part of the procedure is to determine monthly auto loan payments based on an interest rate. Now, as you well know, the interest rate varies from car buyer to car buyer. Your credit is only one of the factors and if the interest rate a car buyer qualifies for is inflated, then the dealership can make extra profit off your loan. That’s just one of the pitfalls in auto financing.Independent Auto FinancingWhen you have the approved auto financing option on hand, you can then proceed with the deal as a “cash buyer” so to speak as you already have the cash in hand from the loan and you are just buying the car from the dealer with that money. Car salesmen prefer customers to be “monthly payment” buyers as this makes it easier for them to obscure the total cost of the vehicle, to the detriment of your savings. So wizen up and take that independent auto financing option available.Set a Price RangeHaving a budget is the sensible thing to do. If you set a sensible price range for yourself, then you have less reason to go beyond that range and succumb to the temptation of overspending. If you’re really firm on that budget, no amount of sales talk can sway you. One good tip is to ensure that your monthly car payments and related expenses do not exceed about 20% of your monthly net income.Discounted Financing vs. RebateHere’s the dilemma to car buying: Many dealers offer an option between discounted financing or a rebate, but not both. Discounted financing means that you get zero-percent financing while rebate means that you get a certain amount of cash some time after purchase. The common error many car buyers make is that the zero-percent loan will deliver the most savings. But will it really?Get the Cash RebateIn most cases, it’s better to get the cash rebate and apply it against the purchase price of the vehicle. If you already have a pre-approved car loan, then that’s even better because you have positively no need of extra financing from your dealer. Just use your car loan to finance the car and let the rebate handle some of the charges.You will have to choose how long you want your lease to be and how much you’re willing to pay upfront. The obvious choice, of course, would be to pay as little as possible, but be sure to weigh other options as well. After that, the car is yours for the period stipulated in the lease contract.There are several other different plans those car buyers like you can adopt in order to make the most out of your money and reduce costs at the dealership. Understanding the credit process is just one way of being a smart buyer.For more information on auto financing and car loans, visit