Understanding The Importance Of Personal Finance

Many people do not actually understand the importance of personal finance and this is part of the reason why they have financial problems most of the time. To define personal finance planning means your money; how you spend it, save it or invest it, you just have to plan wisely. If you have a personal financial plan you will be able to track your finances easily and know where your finances are standing during the month. Instead of just spending, you can stop and say “I only have so much left, I need to spend wisely”. Learn to understand the importance of personal finance so that you too can make use of the services available.

The first thing you have to do is learn to spend less than the amount you earn. This includes your monthly expenses; everything you spend in a month needs to be considerably less than you earn. If you can’t spend less than you earn you will always be in debt and you’ll more than likely become poorer as the months go by. If you have money left over after all your expenses, your house is stocked up with food, etc, you will have money left over to save or invest. It is important that you put something away every month, even if it is only a small amount, at least it is something and every month of a little something for a few years it will be quite a substantial amount after some time.

Understanding the importance of personal finance means that you will be one step closer to living a better life and being able to provide more for your family. If you make use of online templates it will be quite a bit easier than starting it on your own from scratch. Then, there are also spreadsheets that you can make use of, it all depends on what you prefer working with. It will teach you how to use a budget, which is important if you are serious about controlling your spending. Some of the programs you can get online for free, but there are also some that you will have to pay for. There are many different programs available, so you will just have to decide which of them to use.

It’s difficult to save, because they minute you see you have some extra cash you immediately think of treating the family to a nice dinner or buying that expensive handbag you saw, but this is where self control and sacrifices come in. Sure, it’s probably the worst part of controlling you personal finances, but it has to be done. If you can rather take that extra money and put it into a savings account where it will grow interest, after a few years you will have some serious cash.

The importance of managing your personal finance is a simple fact, if you don’t do it now, you never will. There is no better time than the present, start now so because the sooner you start the more chance you have of earning better money with your savings.

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Financing Business Opportunities With Fewer Restrictions

Opportunities in business can be exciting but frustrating if you don’t have the cash required to take advantage of them. On one hand, this opportunity could be too hard to pass up because of the potential growth possibility, but, it can also mean accepting the often onerous terms of the lender to acquire the cash needed.

Owners can choose from small loans, factoring or a new twist on receivables financing. The least restrictive to the business owner is the receivable financing solution. It offers an online auction marketplace designed specifically as an outlet for small to mid-sized businesses to accelerate positive cash flow while maintaining complete control of the transaction.

This online receivables marketplace allows businesses to sell their commercial accounts receivable through auction. Financing opportunities in this manner is similar to factoring but the transaction is entirely different.

The auction platform gives greater control to the seller of the receivables. On the contrary, factoring allows the factor to set the terms, including advance amount and fee. In addition, the arrangement can often carry with it an all-asset lien, which requires that all of the invoices from a particular customer be included and that your customer be notified that your receivables have been sold.

Factoring can come at a high cost with many restrictions. With factoring, not only do you lose control of pricing, but by notifying your customers, you can potentially place the relationship with your customer at risk. Seller determine which invoices to sell, the minimum advance amount and the maximum discount fee they will pay.

Also, their customer is not notified, meaning the Seller retains the relationship. Once the accounts receivable are posted to auction and the auction goes live, buyers-a global network of accredited institutional investors-bid to purchase these invoices in real-time, ensuring a competitive cost of capital.

Loans can also be quite restrictive and time-consuming for small to mid-sized businesses-and that is if they can get approved. This loan process can often take weeks and months of gathering information, filling out applications, interviewing with the loan officer and then waiting for his answer just to find out if your company has been approved.

By the time the money is made available, the price of the specialty equipment or added resources you needed has gone up, the prospective employee has found another job or the larger office space has been snapped up by another business or worse, the competition.

Another limitation of financing business opportunities with a traditional loan is that the bank sets all of the terms- the rate, payment amount and penalty, and what collateral is required. Restrictive covenants are often part of the loan terms as well.

These clauses allow the bank to dictate the actions of the business in order to satisfy the loan requirements. It protects the lender by enforcing financial compliance of the business. If anything significant changes in the financial health from the time the loan is issued, the bank can call in the loan-worse force you in default which could lead to bankruptcy-because the covenant has been broken.

By using the online auction marketplace for trading receivables, the seller gains quick and flexible access to working capital without these restrictions and without taking on additional debt. Another attractive aspect of this alternative working capital solution is that the seller can potentially receive funds in as little as 24 hours.

So, for small and mid-sized company owners, this type of receivables financing means freedom. Instead of relying on and being beholden to other lending entities, you can now dictate the terms and unlock the cash held in accounts receivable quicker, with little risk and few restrictions.

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