Author Archives: admin

Asset And Sales Finance Can Aid Business Development

When it comes to setting up a new business, it can be difficult to come to terms with business terminology – especially if the process of setting up and running a company is completely alien to you. For instance, speaking to your bank about asset and sales finance may be a daunting notion in itself; but when you consider the possibility of getting tangled up in the jargon – and perhaps even losing credibility with your bank – the experience seems even more intimidating. However, if you keep your wits about you and make sure that you’re up to date on the latest financial terms, your bank’s asset and finance solutions are sure to benefit your business.

Make sure you begin with the basics: for starters, familiarize yourself with what asset and sales finance is. Essentially, asset and sales finance is a service through which banks can help businesses obtain a range of equipment – including plant and machinery, IT equipment, commercial vehicles, office furniture and cars, among a range of other necessary business items. The fundamental difference between asset financing and sales financing is that sales financing will help businesses obtain quick access to cash, while asset financing helps companies fund business equipment.

Cost-effective and expedient sales financing solutions will help businesses find enough working capital for operation. Factoring and invoice discounting are two important sales financing solutions. With factoring, for instance, up to 95 per cent of the value of approved invoices can be advanced within a certain time period, with the balance being paid on receipt. Invoice discounting involves a similar process, but with one crucial difference: in factoring, the client’s customers are aware of the bank’s involvement, whereas in invoice discounting they are unaware.

Asset financing is important because it will help business owners acquire assets in a financially viable way, without eating into vital cash reserves. Many banks and financial providers will offer a range of asset financing solutions to its customers. Hire Purchase is one example of an asset financing solution; this can help businesses obtain the asset they need immediately, but payments may be spread across the life of the asset in question. Hire purchase schemes will often allow you to keep the asset in question for a certain fee at the end of your term. Another important asset financing solution, called Operating lease, will allow a business to benefit from a particular asset, while the bank itself will take on the risk of the depreciating value of the asset.

Various banks and financial providers will offer a range of asset and sales finance solutions to their customers, regardless of the business tools and supplies that are needed. For example, some asset and sales finance providers, like Barclays Asset and Sales Finance will offer two separate leases: a Technology Lease to help a business’ technology needs and an Agricultural Lease which offers finance towards the purchase of machinery, land and vehicles, as well as a range of other benefits.

Financing A Home In NY – New York

Owning a New York home can be a lot of people’s dream. New York is a bustling city which can possibly provide a wide range of opportunities for everyone. Even if you’re a businessman or artist, you’ll surely find something that could give you a good life in New York. Luckily, amidst the high cost of houses in New York, you’ll be able to find a home financing scheme that would fit your budget.

A New York home and other real estate properties are relatively more expensive compared to homes in other states. The cost of living in New York will drive those middle income homeowners into the suburbs. To be able to get yourself a decent New York home, you’ll need good income and a high credit score so you’ll qualify for attractive home financing schemes.

But still, you shouldn’t just jump right away to the enticing home financing deal the first financial institution you approached offers. For somebody who signs up for any home financing without prior knowledge of how the process works is like a soldier who doesn’t know how to shoot using his own gun. Financing a home is not something that should be done impulsively. You need to think it over several times and weigh all possible solutions. Lack of preparation may just possibly lead to a repossession of your dream home and leave you without any other choice but to declare bankruptcy.

Homes are expensive purchases, especially those located in NY. They could be the most expensive property you can possibly buy in your entire lifetime. Your home financing decisions would not only affect your life now but also how you’re going to live in the next thirty to fifty years or so.

In NY there are several agencies which offer home financing. Each of them have their own specializations. Even if you have the dollars to spend, you need to carefully choose your home financing agency, or else, you might find yourself paying more than what the house is really worth for. Of course, other things to consider are the agencies reliability and any hidden charges they could possibly include.

The price of NY homes vary largely, depending on their exact location and size. The first thing you should do is find one that fits your budget. Compare one home against other homes in the vicinity. You should also consider things such as accessibility. You wouldn’t want to live too far away from your work, right?

Next, start looking for home financing agencies. You can ask your friends and coworkers to refer you to an agency which offered them a good deal. But your best option is to conduct the research manually yourself. Be aware of home financing advertisements in the daily newspaper. Financial institutions frequently advertise new and attractive home financing offers in the paper to lure more homeowners. You can also research on the internet for reliable home financing agencies which could provide your financing needs.

The New York state is a big city and their real estate business is always growing. You’ll probably notice how these financing agencies are so competitive with each other. If you’re patient enough, you should be able to find one that would offer you the best interest rate possible.

Applying for a home financing in NY is fast and convenient. Financial companies have drastically improved their process in the hopes of getting the biggest share of the market. With just one application, you can obtain quotes from numerous agencies. Even those online agencies can compete very well with the traditional ones in terms of giving you professional service and better home financing deals.

Usually, you’d get better chance of obtaining a good home financing scheme if you have been pre-approved for home financing. Getting pre-approved is also quick and easy. Even online agencies can pre-approve you for a home financing. Once you’re pre-approved, you can just start applying for home financing. The most convenient way is to apply online. Within few hours, you’d probably receive a call from a representative of these agencies. Make sure that you get all relevant data about their offers so you can make wise comparisons.

These New York home financing agencies would want to offer you the best deal possible so you can realize your financial potential. Owning a New York home is a very good investment. NY homes continually appreciate their values, and with low interest rates, there’s probably no better time than now to go ahead and buy yourself a new home.

RV Financing Frequently Asked Questions

It’s that time of the year again, when many people are considering purchasing an RV. When I was a sales manager and finance manager for an RV dealership I would get asked lots of questions about financing RV’s. I organized some of these questions and included them in the RV financing section of my book, “The RV Book”. Here is an excerpt from my book on RV financing FAQ.

Will one RV lender offer better interest rates than another RV lender?

Interest rates change frequently. If the prime rate goes up RV finance rates will go up too. RV lenders send updated rate sheets to RV dealers whenever their finance rates change. RV specialty lenders watch each other closely and if one lender lowers rates the other lenders will generally follow suit. They will usually stay within a quarter to a half point of each other.

Are there other factors that will determine what interest rate I get?

Yes, there are several factors that will determine the rate you get.
1) It depends if the RV is new or used. A used RV (normally over 3 or 4 years old) will get a higher interest rate than a new RV.
2) Your down payment will affect your interest rate. If you finance the RV on a zero down program the interest rate will be higher.
3) The term of the loan will affect the interest rate. The shorter the term the higher the rate, the longer the term the lower the rate.
4) The amount financed will affect the interest rate. The lower the dollar amount the higher the rate, the higher the dollar amount the lower the rate.
5) Your credit history (credit rating or score) will affect the rate. The higher your credit score is the lower the interest rate will be.

Should I shop around for a better rate, or will the rate a dealer offers be the best rate I can get?

You should be aware of what the current rates are for RV loans, and based on the criteria listed determine if you are getting the best possible rate you can get. If you think you qualify for a lower rate, by all means try securing a better rate elsewhere. There are several RV specialty lenders on the internet that would like your business and will offer competitive rates. Do not however let too many lenders run a credit check on you to try and get a lower rate. This can backfire so be selective about who, and how often your credit is being checked.

Can you explain more about financing an RV with no money down?

There are usually a couple of RV lenders that will offer no money down finance programs. These programs will have certain guidelines to qualify. The type of RV, dollar amount, term of the loan and your credit rating can all factor into these types of programs. The finance rate will usually be higher too.

What length of term can I expect to get on an RV loan?

The term of the loan will be based on the dollar amount financed and the age of the RV. Some RV lenders are offering 20 year loans on new RV’s with financed amounts over $100,000 and loans ranging from $25,000 to $99,000 can qualify for 15 year loans. Loan amounts between $10,000 and $25,000 may qualify for 10 to 12 years loan terms.

Why would anybody want to pay the interest on a 15 or 20 year loan?

Nobody wants to, but the biggest advantage of a long term loan is you get a lower monthly payment. Financing $100,000 for 240 months at 7% interest would be $775 a month. The same loan for 120 months would be $1,161 a month. You save almost $400.00 a month. But keep in mind you will have little or no equity if you try to trade within the first several years.

Can I finance an RV with below average credit?

RV’s are basically considered a luxury item, so the criteria to finance an RV are more stringent than it is to finance an automobile. There are lenders that will finance below average credit but interest rates will be higher.

How is the interest on an RV loan calculated?

The majority of RV loans from RV specialty lenders are simple interest fixed rate loans. What this means is you will only pay interest on the principle owed, and in most cases there is no penalty for paying the loan off early. If you choose to pay more than your required monthly payment you can shorten the term of the loan and save on interest.

Can I write the interest off on my income taxes?

Yes, a fully self contained RV is considered a 2nd home and the interest paid is deductible, if you are not already deducting the interest on a 2nd home. At the time of this writing an RV is considered a qualified residence if it is one of the two residences chosen by the taxpayer for purposes of deductibility. To qualify it must provide basic living accommodations; meaning it has cooking, sleeping and bathroom facilities with fresh water and waste water holding tanks. Talk to your tax advisor about what is required to write the interest off on your RV.

Will I need a down payment and if so how much?

Down payments will vary slightly between RV lenders but 10 to 20% down, in the form of cash or a trade-in, is usually the range. There are programs that offer low down, or no down payment but this will usually increase the interest rate. Most banks want to see your good faith commitment to the loan.

Do I need to have insurance on the RV to get a loan?

Yes, insurance is required when you close on the loan. The bank will not loan the money until they have proof of insurance.

Should I finance the RV or pay cash?

It is my personal opinion that it makes more sense to finance your RV purchase. If you finance the RV you can maintain your personal financial status without liquidating any assets. You can also take advantage of writing off the interest on your income taxes if the RV qualifies.

These questions don’t cover everything you need to know about financing an RV, but hopefully they will provide you with a good understanding on the subject and help you when it comes time to purchase your RV.

Happy Camping,

Mark

Copyright 2007 by Mark J. Polk owner of RV Education 101

Accounts Receivable Financing – Be Inspired

Benjamin Zander and his wife wrote a book entitled: “The Art of Possibility; Transforming Professional and Personal Life”. Their idea is that “you can create a passionate energy permeating The Art of Possibility that will be a true force in your life. You can make your own rules.” Their book is inspirational. You will be inspired if you buy and read it. The question is: how does this pertain to accounts receivable financing?

It’s all about attitude, enthusiasm and point of view regarding how to conduct your business. Can you make your own rules regarding how banks, commercial finance companies and other financial entities operate? Of course not. Can you make your own rules regarding how you utilize the financial recourses that are available to finance your business? Absolutely!

Here are three examples how to harness the power of accounts receivable financing sometimes with other types of financing to grow your B2B business.

Case Study One:

A Solar Energy Company that designed and supervised the installation of renewable energy systems was unable to obtain bank financing. They were one of the area’s lowest cost providers of solar panels, system design and supervision. One of their biggest assets was State Solar Tax Credits that are paid to homeowners who install the solar energy systems. An obligation from a State to a consumer is not within the definition of an account receivable. In other words, it could not be financed because it was not an obligation to a business. Using the art of possibility, the homeowners were persuaded to assign their solar tax credits to the Solar Energy Company. This transformed a consumer receivable into a commercial accounts receivable. Voila! The Solar Energy Company received accounts receivable financing it needed to grow.

Case Study Two:

An individual purchased an Importing Company that had been financed with a bank’s SBA loan. As collateral for the loan, the bank placed a UCC1 filing on the accounts receivable and inventory of the business. UCC refers to the Uniform Commercial Code in effect throughout the United States of America. In some respects, it simplifies the process of lending, selling and borrowing nationally. In other ways it is very complex. A UCC1 filing by a bank usually prevents any further financing because there is no collateral left to be financed. It is similar to a first mortgage loan on a house. If you have a 95% loan on your house, no other financing is available on the house because there is no equity to lend on. Using the art of possibility, the Importing Company was successful in convincing the bank to subordinate their UCC1 filing to another commercial lender’s UCC1. The Importing Company convinced the bank that it would be mutually beneficial to lower the bank’s UCC1 lien to a secondary position to allow a commercial finance company to offer new accounts receivable financing and inventory financing. Voila! The Importing business has a new credit line available for growth. It is now more profitable and the bank is more likely to be repaid. This is a win-win situation.

Case Study Three:

A start-up Clothing Company involved in manufacturing, distributing and designing T-shirts landed a substantial purchase order for their product. The product was to be made in China, and the Clothing Company lacked sufficient funds to pay for the costs of manufacture and distribution. Using the art of possibility, the Clothing Company obtained a letter of credit to guarantee the Chinese factory of payment, purchase order financing to pay for the T- shirts upon delivery, and accounts receivable financing to pay the purchase order company upon delivery of the goods to the customer in the US.

Accounts receivable financing can help your B2B business realize the art of possibility for growth and profits. Voila!