Understanding Small Business Finance

If you are an entrepreneur, then you know that there is always a need for small business finance to keep things going. Being able to get the money that is needed for your business means that you need to make several financial and non-financial considerations.

Firstly, before you search for funding for your business, it is important to know what type of financing required. Would the business need debt financing (a loan for running your business) or equity financing (money that is taken from savings or investors)?

Small business finance through debt financing means taking loans from credit unions, banks and other traditional financial institutions. Among the loans that are available are short-term loans which must be repaid, with interest, within a specific period of time. Such loans may be termed as demand loans as the lender can call in the loan for repayment any time. Small business finance longer debt loans are normally used for financing assets like renovations or investments in equipment.

There are many businesses that make use of lines of credit as a source of small business finance. They make arrangements with lending institutions for a set amount of available credit that they can draw upon when need arises. Lines of credit allows businesses to use the cash when they need it and they only need to pay back the amount that has been used and interest is paid on the outstanding balance of the line of credit. Numerous lending institutions offer credit cards as a means of small business financing. These cards are used by establishments to finance their operating expenses. But, credit cards can be expensive because of the interest rates. The cards are ideal for use if the balance is paid in full monthly.

Small business finance through equity is normally used in a limited manner. Informal source of equity funding includes friends and family; while the formal sources include venture capitalists. Venture capitalists generally have a considerable pool of resources that allow them to finance ventures and participate in some of the more crucial decisions in the business. However, these capitalists conduct studies before making the decision to provide funding.

There is also some equity small business finance that are received from people who are called as “angel investors”. These are normally people who have deep pockets and are willing to provide funding.

Small Business Finance – The Next Big Banking Problem?

For the past year, most banks and lenders have been subject to both disastrous operating results and negative publicity. Actual commercial lending activity reported by banks conflicts with the usual attempt by politicians and bankers to portray banks as normal and healthy. Most bank financial results have been disappointing after working hard to solve massive residential loan problems. It is reasonable to ask if commercial banking has more potential disasters about to emerge based on what has been seen and reported so far.

Based on a number of business financing statistics, commercial lending to small businesses is already on life support. In many cases, without government bailouts many commercial banks would have already failed. As bad as that perspective might sound, this report will provide an even more negative outlook for the future of small business finance programs. Unfortunately for banks and lenders, it does appear that business loans will be the next big problem.

During the past year or so, several banking problems have received significant publicity. The largely avoidable difficulties were primarily tied to increasing home foreclosures which in turn caused various investments tied to home loans to decrease in value. Such investments lost value so rapidly that they became known as toxic assets. When banks stopped making many loans (including small business financing), the federal government provided bailout funding to many banks to enable them to keep operating. While most observers would argue that the bailouts were made with the implicit understanding that bank lending would resume in some normal fashion, the banks seem to be hoarding these taxpayer-provided funds for a rainy day. By almost any objective standard, commercial lending activities have all but abandoned small business finance needs.

Small business financing appears to already look like the next big problem based on commercial finance statistics recently released by many banks. The general decline in commercial real estate values during the past several years is a major factor in this conclusion. Because many large commercial real estate owners could not make their commercial mortgage loan payments or refinance business debt, this has resulted in some significant bankruptcies. The resulting bank losses are clearly having an impact now on commercial lending to small business owners even though these difficulties were primarily happening with large real estate owners and did not usually involve small businesses.

Bank losses on large commercial real estate loans have caused many banks to reduce or stop their small business financing activities, and this has clear similarities to the earlier situation of residential mortgage loan toxic assets causing banks to stop normal lending because of capital shortages. The bank losses from large commercial property investors are producing a ripple effect that has caused small business financing to effectively disappear until further notice. While small business owners did not cause this problem, they are suffering the immediate consequences when banks are unable or unwilling to provide normal levels of commercial financing to them. This bad situation is made even worse when we learn that many banks are hoarding cash and approving fewer commercial loans to allow them to quickly pay bailout funds back to the federal government. The primary logic for this approach is that it will allow banks to resume excessive bonuses and compensation to their executives.

Unfortunately one problem will lead to another, as is common with complex circumstances. The failure to obtain normal business financing will most likely lead to an increasing number of commercial loan defaults by small businesses. Prudent business owners should begin to take action now in a timely manner to avoid such negative consequences. The most serious small business finance problems can be anticipated and avoided with appropriate action.

Even if they do nothing else, business owners should have a straightforward conversation with a small business finance expert to assess how exposed their business might be to the brewing commercial banking problems. If recent events are any indication, the banks themselves will not be very forthcoming about problems with their commercial lending practices. For many small businesses, the most objective business financing expert is not likely to be their current banker. To increase the chances that they receive sufficient small business loans in the face of ongoing lending problems, a healthy amount of skepticism and caution will be helpful for business owners.

Essential Money-Saving Travel Tips for Beginners

Any plans of taking a break after a few months of stressful work? Then, travelling out of town might be a good idea. To ensure that the hard-earned money will go far, here are some of the budget travel tips to keep in mind:

• Call the hotel first before booking it through the Internet. Though it’s convenient to make travel arrangements online, it doesn’t guarantee to give travellers the best possible deals. It’s recommended to call the hotel depending on the expected time of arrival and speak with a supervisor or manager on duty.

Ask if they can offer an affordable package during the stay. Normally, some hotels would give discounts to travellers who prefer rooms that aren’t as coveted as the others. And for those who are celebrating their birthdays or anniversaries, some hotels offer complimentary upgrades for a night.

• Compare prices of airline tickets. People will prefer to purchase tickets online than over the phone because it’s more convenient. However, it’s essential to make a comparison first by calling the airline and check if the ticket price is similar to what is displayed on the Internet. When purchasing tickets, it’s also recommended to consider the extra fees. Once all of this has been made, go for the one that offers a lower rate.

• Book everything alone. Third parties such as travel agents and booking websites offering services to arrange everything seldom work for free. Normally, there’s an equivalent fee that will go to them. Travellers will save more money by booking each and every element separately through contacting their preferred hotel and airline. By doing so, they will also have the option to contact other choices for price comparison.

• Ask for repositioning cruises or flights. Airlines and cruise lines usually reposition their trips from time to time. it’s cheaper than the traditional trips but also offers similar services to customers. One thing to note though, travel time for repositioned trips may take longer than the usual.

• Avoid travelling during peak seasons. As the number of tourists goes up, the travel cost also does. Though visiting a certain country during Christmas time is a perfect idea, travellers can save hundreds of dollars on flights and hotel accommodations if they can wait to visit once the season is over.

• Share a room with a friend. Stay at the hotel is another essential thing to consider on budget when travelling. There are hotels where room rates for a single person is also the same as the cost of rooms for two persons. Instead taking separate rooms for this situation, why not get a room for two? Aside from the saved money, this will also be a good time to spend bonding moments with a friend while on vacation. Forget about the loud snoring during bedtime though.

• Travel like the locals. As tourists, riding glitzy air-conditioned buses with movies on-board is a convenient option but often comes with a hefty price. Doing this might take away the money that should be spent on exploring other places around the area.

Travelling should not be expensive. All it takes is just the right preparation, timing and budgeting. By keeping all these budget travel tips in mind, everyone can have a wonderful vacation without shedding out too much money from their pockets.

Small Business Financing Options – Despite the Credit Crunch

There’s no question that the financial crisis and ensuing credit crunch have made it more difficult than ever to secure small business financing and raise capital. This is especially true for fast-growth companies, which tend to consume more resources in order to feed their growth. If they aren’t careful, they can literally grow themselves right out of business.

Amidst all the gloom and doom, however, it’s important to keep one thing in mind: There are still options available for small business financing. It’s simply a matter of knowing where to look and how to prepare.

Where to Look

There are three main sources you can turn to for small business financing:

Commercial Banks – These are the first source most owners think of when they think about small business financing. Banks loan money that must be repaid with interest and usually secured by collateral pledged by the business in case it can’t repay the loan.

On the positive side, debt is relatively inexpensive, especially in today’s low-interest-rate environment. Community banks are often a good place to start your search for small business financing today, since they are generally in better financial condition than big banks. If you do visit a big bank, be sure to talk to someone in the area of the bank that focuses on small business financing and lending.

Keep in mind that it takes more diligence and transparency on the part of small businesses in order to maintain a lending relationship in today’s credit environment. Most banks have expanded their reporting and recordkeeping requirements considerably and are looking more closely at collateral to make sure businesses are capable of repaying the amount of money requested.

Venture Capital Companies – Unlike banks, which loan money and are paid interest, venture capital companies are investors who receive shares of ownership in the companies they invest in. This type of small business financing is known as equity financing. Private equity firms and angel investors are specialized types of venture capital companies.

While equity financing does not have to be repaid like a bank loan, it can end up costing much more in the long run. Why? Because each share of ownership you give to a venture capital company in exchange for small business financing is an ownership share with an unknown future value that’s no longer yours. Also, venture capital companies sometimes place restrictive terms and conditions on financing, and they expect a very high rate of return on their investments.

Commercial Finance Companies – These non-traditional money lenders provide a specialized type of small business financing known as asset-based lending (or ABL). There are two primary types of ABL: factoring and accounts receivable (A/R) financing.

With factoring, companies sell their outstanding receivables to the finance company at a discount of usually between 2-5%. So if you sold a $10,000 receivable to a factor, for example, you might receive between $9,500-$9,800. The benefit is that you would receive this cash right away, instead of waiting 30, 60 or 90 days (or longer). Factoring companies also perform credit checks on customers and analyze credit reports to uncover bad risks and set appropriate credit limits.

With A/R financing, you would borrow money from the finance company and use your accounts receivable as collateral. Companies that want to borrow in this way should be able to demonstrate strong financial reporting capabilities and a diverse customer base without a high concentration of sales to any one customer.

How to Prepare

Regardless of which type of small business financing you decide to pursue, your preparation before you approach a potential lender or investor will be critical to your success. Banks, in particular, are taking a much more critical look at small business loan applications than many did in the past. They are requesting more background from potential borrowers in the way of tax returns (both business and personal), financial statements and business plans.

Lenders are focusing on what are sometimes referred to as the five Cs of credit:

o Character: Does the company have a strong reputation in its community and industry?

o Capital: Lenders usually like to see that owners have invested some of their personal money in the business, or that they have some of their own “skin in the game.”

o Capacity: Financial ratios help lenders determine how much debt a company should be able to take on without stressing the finances.

o Collateral: This is a secondary source of repayment in case a borrower defaults on the loan. Most lenders prefer collateral that is relatively easy to convert to cash, especially equipment and real estate.

o Conditions: Conditions in the borrower’s industry and the overall economy in general will play a big factor in a lender’s decisions.

Before you meet with any type of lender or investor, be prepared to explain to them specifically why you believe you need financing or capital, as well as how much capital you need and when and how you will pay it back (if a loan) or what kind of return on investment a venture capital company can expect. Also be prepared to discuss specifically what the money will be used for and what kind of collateral you are prepared to pledge to support the loan, as well as your sources of repayment and what measures you will take to ensure repayment if your finances get tight.

You should also ensure that your financial statements and records are current and that your internal control systems are adequate for handling the level of accounting and bookkeeping lenders and investors expect.

Dudhwa National Park – A Treat for Nature Enthusiasts

Residing in the Lakhimpur and Kheri districts in Uttar Pradesh, the Dudhwa National Park is home to a large number of threatened animal species such as the Rhino and the tiger. This tiger reserve houses two beautiful sanctuaries – the Kishanpur and Katerniaghat Wildlife sanctuaries, where you can spot a large number of birds and animal species. Dudhwa is a magnificent wildlife park which offers its visitors excellent views of its lush greenery and beautiful terrains.

Dudhwa is one of the richest bio-reserves in India; the adjacent Indo-Gangetic plains are credited for the flourishing fauna and flora in this region. This wildlife Park spreads over a vast grassland and dense forest. Over 16 species of reptiles, 38 species of mammals and several species of birds are protected here.

Popular Activities in Dudhwa National Park
• Safaris – The Park offers Safari services for visitors, but you can also explore the place on your own by hiring a jeep or a mini bus.
• Jumbo rides – Elephant rides are a popular attraction at the park; the mahouts will be your tour guide, and they will give you a tour of the park on the majestic animal.
• Tharu Village Visit – Tharu is a small tribal community residing inside the Park. Meeting the tribal village is a great opportunity for outsiders to learn about a unique ethnicity and rich culture.

Best time to visit Dudhwa National Park
December to April is the perfect time to visit the park. Since Northern part of India follows the extreme climate pattern, the summers are going to be boiling, and the winters will be freezing. The park stays open from 15th November-15th June.

How to reach?
• Flight – Lucknow is the closest airport to the Park. You can hop on a taxi from the airport to get to the Park.
• Road – Dudhwa has an excellent road connection most of the major cities and States. There are plenty of State-owned as well as private bus services from neighbouring cities like Bareilly, Delhi, Lakhimpur, Kheri, and Shahjahanpur.
• Train – The nearest railway station to the park is nearly four km away. Other railway stations include Palia which is ten km away and Mailani which is 37kms away from the park.

Where to stay?
Accommodation is not an issue in Dudhwa because visitors have plenty of Dudhwa forest resorts to choose from. Apart from the resorts, you can also find forest lodges, dormitory or forest huts to stay. The Dudhwa forest resorts ensure luxurious comfort so that visitors can experience nature with ease. Camping in Dudhwa National Park is a haven for nature-lovers. If you love wildlife, then you will love the Dudhwa National Park.

Benefits of the Referral Process With a Unique Small Business Financing Program

This unique small business financing program offers many benefits, and not just to small business owners. This program allows referrals, and this can help you make a nice sum simply for referring small business owners to the program. The referral program is a situation where everyone involved wins, and there are no losers. This program requires no credit checks, tax returns, or any of the other documentation that is usually required. It is one of the best available small business financing options, and the referral program means that you can earn extra money simply by telling other small business owners about this fantastic program.

Referrals are paid for by the lender to help identify other small business owners who could benefit from this program. Many small business owners have networks of other small business owners, who may belong to the same trade groups or associations. In addition, many of us know people who own a small business and could really use financing right now to help in these tough economic conditions. The referral process is very easy, and takes almost no time at all. Anyone you refer will put your name as the referral source on the paperwork, and when your referral qualifies for the financing then you are paid a referral fee. You get money simply for helping an acquaintance or friend get the money they need for their small business. This financing program is risk free, because the processing fee is completely refundable if you are not one hundred percent satisfied with the amount of financing offered.

The referral program offered by this financing opportunity means you can help out any small business owner you know or meet, and benefit from it. The extra income you can make from referrals can really come in handy, especially with the slow economy and financial crisis that is raging. The best part is that this small business financing program sells itself, because of all the benefits offered and the fact that there are no disadvantages. You do not not to push to sell the benefits of this financing program, once small business owners realize the enormous potential and the ease and convenience offered. Financing is critical for any small business to grow and expand, and the financial crisis has made getting this financing extremely difficult from banks and other traditional lenders.

This new and unique small business financing program is a lifeline to small business who need financing but do not meet the perfect credit and documentation requirements that are needed in the current climate. The referral program means that you can get the small business financing you need plus earn some for telling people about the program you use. Unlike all the other financing options, this program is very flexible, and requires a small amount of documentation. Bad credit is okay and can still get approval. This program has helped many small businesses get back on their feet by providing the financing needed. The fact that you can earn money for telling people about this fabulous financing program is just another benefit, for a program that has many.

7 Things to Know Before Visiting Cusco Peru Tours

Cusco is one of the tourist destinations that many Peruvians choose when to pack up and travel, but there is great uncertainty about whether the budget will reach to know one of the places that houses one of the seven modern wonders like Machu Picchu.

If you are visiting Machu Picchu, in Cusco, for the first time, you will experience some knew things and here are some tips that will improve your whole adventure in strange situations.

Choose the time: You must note that from April to October is the dry season with the cloudless sky. Since November, the clouds and rains that reach their peak in December through March.

Meeting hours: The Cusco Peru tourslasts a whole day. We will move out quickly as we can, to seize the day and avoid the crowds. Another thing you can do is go out in the evening and sleep in AguesClient’s, from there to Machu Picchu the next day morning. You can change Aguesclients’ to Ollantaytambo if you like.

Trekking: Some might want to get walking, but it is not an easy task. You can choose the Inca Trail, Salkantay Trekking to Machu Picchu and Coffee Route. Always accompanied by excellent guides and book your space with several months in advance.

Clothing and accessories: It is advisable to take only what is necessary. Water, a jacket for warmth, sunscreen, hat, insect repellent, and camera. Always have a rain jacket and windbreaker. Machu Picchu is jungle and warm, but the weather changes in minutes, and can rain, cloud and spend a little cold.

Lunch and drinks: It is advisable to get the food in the village of aguesclients before climbing to Machu Picchu. You can also bring your little taper.

You must ask the locals where they eat them, do not go where tourists eat or nearby restaurants to tourist sites, these are commercial, expensive and bad. Explore the markets, eat llama, and enjoy the best experience in a country as lovely as Peru.

About the currency

The currency used in the country is the Peruvian Nuevo Sol (three suns roughly equivalent to one dollar). There are many places where you can change money, for example switched smoothly on the same bus terminal in Tacna. It goes without saying that always look established places to spare potential problems.

Vaccines

You will not need any special vaccinations to enter the country. But keep in mind that if you visit Amazon regions, the Ministry of Health of Peru recommended the yellow fever vaccine. For example, if you go to the city of Iquitos, in full jungle Peru, it is better as a preventive measure you perform the vaccine.