Commercial Financing for Your Small Business

It’s common for businesses of all sizes to experience fluctuations in cash flow from time to time. Small businesses, in particular, may experience variations in market demand that necessitate a loan. These can include cash loans in the form of overdrafts, lines of credit, and other types of debt. There are a range of commercial loans available to business borrowers.

Credit Cards

Credits cards should ideally be used only to fund short term needs or as a convenient payment method for businesses. Credit cards tend to have higher interest rates and are interest-free only until the next billing cycle. Businesses seeking short term cash finance should use an overdraft or a line of credit.

Leases and Hire Purchases

These are several of the most common types of commercial financing for cars, equipment, plant, and technology. Leases and hire purchases use the leased or hire purchased asset to secure the loan and so are very easy to obtain. The business makes regular payments, over months or years, often until they obtain full ownership over the product (hire purchases). In case of leases, the business usually has the option of purchasing the vehicle or equipment at the end of the agreed lease term, for a sum set by the lease company. There are different tax implications for items bought under a lease and hire purchase agreement that businesses should stay aware of.

Overdraft Facility

Overdraft facilities are very common for businesses. They are attached to business accounts and come with a limit, known as an “overdraft limit.” Lending banks and institutions may conduct a credit assessment and ask for some form of security. An overdraft facility is one of the fast loans, an easy option that can be accessed, once the overdraft is approved, without further authorisation and used much like a debit account as long as the limit isn’t exceeded.

Line of Credit

Lines of credits are secured by a mortgage over a property, which can be your office or place of business. Lines of credit tend to have more attractive (lower) interest rates than overdrafts as they are always secured, while offering the same level of flexibility. However, unlike an overdraft, repayments that cover interest payments and associated fees must be made periodically.

Fully Drawn Advance

Fully drawn advances provide upfront financing, usually larger amounts. These advances are often used for funding longer term outlays such as capital expenditure (equipment) and investments, and are not designed for short term needs. They come with scheduled repayments for both interest and principal, and are secured with a mortgage over a property or commercial asset.

An example of a fully drawn advantage is a business home loan, where business owners can certify their own income and borrow against the value of their personal home. Borrowers can borrow in their own name, the company name, or under some other legal structure. Borrowers can borrow as much as 80 per cent of the value of their home.

Debtor Financing

It is also common for some businesses to obtain finance by securing a loan on the total amount owing to the business by customers as identified by their accounts receivable ledger. Usually the loan amount can be up to 80 per cent of the total amount owing. This is a short term financing option that allows businesses to receive needed funds well before customers make payment and assists with smoothing out the invoice cycle. It’s highly flexible and tied to the amount of business or sales made by the business.

It is Not Necessary That Your Job is Your Credit For a Car Loan – Finance Your Car Without a Job

The logic behind this particular requirement is that lenders feel if the applicant does not have a job, it is going to be difficult for the applicant to repay the money borrowed. It is a misconception, but that is the fact. That is how it goes, and the applicant does not have a choice other than to fulfill the requirements stated by the lenders. Well, let is think differently. It is not impossible. There is a way you can still avail credit even if you do not have a job. The article tries to explain how to go about getting your car loan with no job and no credit or poor credit ratings.

The importance of collateral or a guarantee

All secured loans require some sort of collateral or a guarantee. In case of mortgages it is the house that provides the collateral. While going in for car loans or automobile finance, it is the vehicle – the car – that acts as a guarantee. Lenders generally provide around 75% to 80% loan against the guarantee provided. That means if the house is evaluated at $100000, it is possible to get a loan of $75000 to $80000 max. The same is true while availing a car loan. The applicant needs to make a down payment that is approximately 20% of the car is price. The remaining 75% to 80% of the car is cost is provided by the loan provider. The fact is even with a collateral, lenders prefer the applicant to have a job. It is not important whether the borrower can come up with an alternative source of income – that does not count. To get the loan you need to have a “recognized” source of income. And in most cases, the most legit source of income is the job. In short, by just providing the collateral, the lender is not going to grant you the loan unless you have a stable job. While financing your car, as far as orthodox credit lending institutes are concerned, your job is your credit for a car loan.

Get your car loan without a job even with bad credit ratings and no collateral

When regular or standard options do not work out, one has to go in for alternative options. One cannot provide what one does not have. There is an alternative available. The answer lies in acquiring the required credit from places or people who do not need any security or credit ratings. One such place is the pawn shop. Pawn shops have existed for many years, and almost everybody knows how they operate. It is one of the best place to buy used goods that do not cost much, and it is also a place where you can offer some commodity that is not very expensive, and get some money in exchange. It is not difficult to avail credit from pawn shops, and the main advantage is you get to decide how much cash you need without presenting any documents or credit rating reports. It is worth knowing how pawn shops work.

How pawn shops work

In case of typical car title loans, the credit lending company determines the price of the car based upon the car is resale value, and provides a loan against that value. The lending company retains the car is title or ownership documents till the loan is redeemed. Generally a car title loan is of short duration, and associated with a high rate of interest. The rule is if you do not repay the loan within the stipulated time, the company can possess the car and sell it to regain the capital lent along with the loan is interest. That is how an auto title loan works.

If you possess some jewelry, or some other valuable, it is possible to “pawn” it in a pawn shop. A person evaluates your possession and comes up with an appraisal value, and lends money based upon the appraisal. You are supposed to repay the money after a certain time. The pawn shop charges interest in reference to the money given. The interest charged is usually around 10% and varies from state to state. This particular method of lending money in exchange of some “possession” is basically a loan. It is a special type of loan because the pawn shop does not require any documentation, or your credit history, while lending the money. The money can be used to buy your car. And just as in the case of a car title loan, you forfeit your pawned possession if you can not repay the money borrowed. It is an alternative way of financing a car with no job in hand. Certain pawn shops specialize in providing capital for car loans.

Online Car Finance Loans: Your Best Choice For Car Financing

For so many people, paying out a lot of cash for the purchase of an automobile is almost beyond any possibility. And even if it is possible to buy a new car, a person may not really want to deplete any savings they may have in their bank account. This leaves only two options and one is leasing an automobile, which can become another monthly expense, or the better choice will be to finance a car by applying for one of the many car finance loans available for the purpose of helping those who would like to buy an automobile, but are unable to afford the cost of buying and or leasing one.

There are plenty of people who do not have a problem with draining their bank account to purchase an automobile. However, if you are in the same situation as most people are, where you do not wish to use up your account, then your best option will be to finance the car with the car finance loan.

When you begin to shop around to find this kind of loan, you shall benefit from the use of the internet as there are quite a lot of reputable websites that advertise these loans for car financing. Looking for a good rate is a very important matter in regard to financing for an automobile, which is what you can expect to find on these sites.

One important thing to remember when searching for a loan, is to base your choice for a loan from comparing the rates from other lenders. You shall discover that these sites offer reasonable rates in regard to the interest that will be affordable. The monthly repayment plans are quite reasonable as well, making it more easier for people to use these types of loans.

Terms and conditions are another important thing to check out when looking for a car loan. When you decide to sign up for one of these car finance loans, you will agree with the terms and conditions from these lenders.

Be sure to check on anything that pertains for car financing. You will learn that they are just as reasonable as the interest rates they apply to these loans. But, still it will be very important for you to read everything carefully and understand whether or not it meets your financial needs.

Before you can be approved for one of these types of loans you shall need to meet the requirements. There are only a few and in most cases they are all met by the borrower, for such things as having proof that you are a citizen of the country where you are applying for the loan, a steady monthly source of income, proof that you are at least eighteen years of age and also you will need to have an active bank account with a local bank.

Borrowing money to purchase a car is not always an easy thing to do, as many people are unable to afford to buy off the car with one payment. When this is the case, then the best option will be to apply for one of the many car finance loans, which are available through the online websites that offer a great way to borrow for the financing of a car.

Do it Yourself, No Money Down – Bad Credit Auto Financing For Cars, Trucks Or Motorcycles

A rumor that has been spread since the 1960′s is that whatever a car dealer gets for a down payment is nothing more than profit. This rumor is in part, true.

An Example

The following example applies whether you’re buying a car, truck or motorcycle with bad credit.

Let’s say that you want to purchase a used car that has a selling price of $15000.00 and the dealer is telling you that because of your bad credit history, you have to put down a 10% down payment of $1500.00. In cases like this, it is very likely that the loan company approving you will only “advance” $13,500.00 on the vehicle in question and this is generally based on loan value. Typically, the dealer will have paid somewhere around loan value for the car and if they sell it at this price, then they aren’t making any profit. So in this common example, requesting that you make a cash down payment of $1500.00 is in fact, $1500.00 of dealer profit and nothing more.

Dealers do have to make money and $1500.00 is a reasonable profit. It’s disheartening however, to fork over a couple weeks worth of income just to make that happen, though.

How to Get A Car with No Money Down

If you have bad credit and need auto financing, and you don’t want to put any money down, there is a solution. Now, hear me out on this, because this information can really benefit you and this information comes from 20 years of experience working in car dealership finance departments…

Buying a car from a private owner. This reduces the amount financed by around 7% or whatever your local tax rates are. This reduces the amount needed to buy the car and less money that has to be borrowed. There are also no dealer “doc”¬†fee or dealer “prep” fee, which also reduces the amount needed to be loaned by $99 to $599 typically charged by car dealerships. Reducing the amount needed is good!

Negotiating with a private seller on the sale price is MUCH¬†easier than negotiating with people that do it for a living (car dealers). If the seller doesn’t have a large amount owed to the bank and is frustrated with taking time to show the car, you may be very surprised to find some really great prices on cars for sale by owner. This can be in your local newspaper, bargain paper or online classified.

“Do-It-Yourself” auto financing. This is the most important part. Bad credit doesn’t mean that you can’t get a car loan from a loan company outside of a car dealership. If you deal with a loan company directly, you’re only dealing with them on the finance side of the purchase, not the price of the car. This enables you to qualify (get approved) for a specific dollar amount that you can base your car shopping on. There are online resources to do this from the comfort and privacy of your home.

Considerations When Looking For Car Finance by Location

When looking into car finance options it may be confusing as there are so many offers and deals out there. You may want to take what might seem to be the easiest option of walking into a dealership to buy a vehicle and take the finance deal they offer. However, this might not necessarily be the cheapest way of obtaining the finance needed to purchase a car. You may want to compare the cost of interest rates online and there are specialist motoring websites that search for car finance by location for you and allow you to look for a new or used vehicle in your area too.

If you choose the option above to look for a vehicle and car finance by location then of course this may save a great deal of time. Usually you are able to browse through new and used cars in your area and if you find what you are looking for, you are able to compare the best deals on your finance. If you do not understand APR then this may be the ideal choice for you as you may be sure that they find you the best deals possible. When you purchase a vehicle this way, usually everything is taken care of for you and all you do is pick up the car from the dealer.

When looking for a vehicle and car finance by location you then have to decide how much you are able to repay each month. To help keep the loan affordable you may be tempted to stretch out the term of the loan. When considering this you may want to use a loan calculator to work out how much you have to pay in interest and in total. It may help if you are able to pay something towards the cost of the vehicle so if you do have savings you may be able to borrow less and so you pay less in interest. Another bonus to taking a personal loan to finance your car is that the vehicle is yours and providing you keep the repayments up to date, or pay off the loan, you are able to sell or trade in the vehicle whenever you wish.

Of course, if you are going to take the traditional method of buying your car by going into a dealership on foot, the dealer usually offers car finance. When taking finance this way it is called hire purchase. As the name might suggest the vehicle is not yours until the final payment has been made, until then you are just “hiring” the car. You also usually have to put down a deposit on the car. As the vehicle is not yours until you have paid the final installment you are unable to sell the car or trade it in until this time.

Whichever method of car finance by location you choose, reading the terms of the contract is essential so you know exactly how much the vehicle is going to cost in total with added interest.