Posts Tagged ‘Business Finance’

Weigh the Pros and Cons of Debt Relief Options

January 31st, 2012 by ryanj | Comments Off | Filed in bankruptcy

Save yourself from yet digging a deeper debt hole. Know your options before you get yourself into more financial trouble.

People in debt are inclined and are likely to make rash and uniformed decisions when it comes to dealing with their debt troubles. For one, the stress and pressure brought about by their situation makes them desperate for a solution to end their problems. They feel weak and defenseless so when a seemingly promising solution presents itself, they grab it without weighing how it could be helpful or damaging to their condition.

For example, you are overwhelmed with multiple debt and personal loans that need to be settled. You read an online advertisement or an article that sells the idea of making a loan to pay off all your debts. The solution sounds promising so you decide to avail of a secured debt consolidation loan. Since you have a house, you use it against the loan as this is the prerequisite needed. You get the loan and pay off your creditors, and then you are left with just this one loan to pay. Practical and orderly, you say. But what happens if you fall short of keeping up with the charges and you fail to finish the program because it requires payment higher than what you can afford? Alongside paying for the loan, you also need to provide for your necessities and you have basic expenses to attend to. To make matters worse, you used your house as collateral and losing your home now is more than what you can emotionally handle.

This scenario does not impart that secured debt consolidation loans are not possible solutions. This only illustrates the importance of addressing your problem in a systematic manner. Know what your problem is, assess your finances, know all options, and then make the decision. You should consider all factors and inform yourself. This way, you prevent yourself from aggravating your already difficult situation.

It is important to study the available debt relief solutions that suggest assistance in managing and settling your debts. Problems have different points and concerns to be answered and not all solutions work the same way. Yes, one approach may resolve your crisis. But what if another option that you did not look into would have produced better results and have given you more benefits in the long run? Or worse, what if the solution you chose got you into more serious trouble? Weighing the pros and cons of each approach would help you make a more informed decision, and that decision might prove to be the beginning of a better financial life for you.

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Invoice Factoring is your Business Solution

January 24th, 2012 by iamronnietaylor | Comments Off | Filed in general

Invoice finance companies are quickly becoming a solution for many companies which are suffering in these economic times. Granted the economy is on its way to getting better, but one little thing can have it heading back into the difficult zone. We are teetering on a precipice if you want to look at it through an analogy. Since most companies are involved in the financial cycle it means when one thing starts to fall it eventually affects others.

The subprime mortgage market is a good example of this. In the banking industry many loans became defaulted. It meant that the banks started failing and thus there was not enough money to help out other businesses which were at the beginnings of trouble. Banks started loaning money and therefore people who needed it either needed a different product or they had to close.

If you are still suffering from the financial cycle that is on the mend but definitely not as strong yet then consider invoice factoring. It is one option you have to help improve your cash flow situation. It is not a magic answer. There are advantages and disadvantages to the concept; however, you may find it has more advantages for your business and its current situation than it does disadvantages.

To be more explicit, with invoice finance companies you will sell them your ledger of open invoices. They will provide you with at least 85 per cent of the amount the invoices are for. They keep 15 per cent as their fee. You have a fee to set up the concept and some companies may charge interest too. The point is you obtain funds that can be of help to you. These funds can be used how you see fit, but for the best advantage it should be in a way that will not harm the company.

In other words, if your clients do not pay their open invoices you will have to pay the money back to the finance company. If you spend the funds on unnecessary items, which do not help you grow your cash flow it can be an issue. No matter what you do in business you should make certain it will grow your cash flow without getting you further into debt. Let factoring work for you by helping you increase your cash, but not so much as to get into debt with yet another company.

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Setting Up a New Business After Chapter 7 Bankruptcy

January 17th, 2012 by Anya Bennett | Comments Off | Filed in general

As a business owner you may want to file for bankruptcy if you are drowned in a sea of credit problems, and there is no way out. But before you take your final decision, consider consulting anon profit debt relief agency to to settle debt on credit card. A large number of such debt relief agencies across the country provide credit counseling, debt management programs and alternatives to debt consolidation – without a loan or bankruptcy.

What is chapter 7 bankruptcy and how it affects your business?

Oak view law group

Chapter 7 bankruptcy is the most common type of bankruptcy filing and is also known as liquidation – converting assets into money. If a debtor files for chapter 7 bankruptcy, all his non-exempt property is sold and the proceeds of the same are distributed to the creditors. Most debts would be discharged within months of filing a bankruptcy petition. This is also one of the faster way of starting your business afresh. The court not only appoints a trustee but also creates a “bankruptcy estate”. Mostly, a chapter 7 trustee is responsible for selling the assets and distributing the proceeds to the creditors, after paying off the administrative and legal expenses. But practically, after bankruptcy, the business is over. However, life gives you a second chance. After bankruptcy, you can always start a new business and even your existing business can take a new turn. Although the new business may operate under the same name as the previous one, it is a better idea to start afresh with a new identity. This will prevent any negative credit information from hampering your new business.

Opening a new business after bankruptcy

Bankruptcy remains on an individual’s credit report from 7 to 10 years. Getting a loan during this time frame might be difficult but not impossible. Generally, all business loans need a personal guarantee from an officer of the business. The credit rating of a person is used as the basis for approval or rejection of a business loan. Following are a few tips to get a business loan after bankruptcy:

  • Accounts Receivable Loans

In order to survive each and every business has to have some income. They offer terms to clients whereby they purchase a product but pay for it nearly 90 days later. This delayed income is called accounts receivable. These loans are based on the income of a business and so, a business owner’s personal credit is not taken into consideration.

  • Equipment loans

In a business that sells a product, there is equipment that is used in the production of that product. This equipment is generally highly customized for the business and may cost millions of dollars. If a business owner has filed for bankruptcy he can use this equipment as collateral for the loan to the new business. The basis for the loan will be the value of the equipment and not the business owner’s credit status.

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