How To Finance A New Business

Many people dream of starting their own business, but without the right capital and finance behind them many of those dreams will never become reality. So one of the things that you will need to figure out from the beginning is how much money you need to start your business and how to get access to this funding.

Try to be very careful about not overspending in terms of things that you may not necessarily need for your business. For example, there might be a business that could very easily be based out of your home for some services, instead of having to go out and actually rent office space. So if that’s a possibility and you’re zoned for being a home-based business based on your city, then that might be a way of cutting costs.

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Try to keep your costs and your expenses down as much as possible. The money that you are coming up with I would highly recommend that once you know how much that is, that you plan for at least twice as much money as you think you’re actually going to need. Because one of the things I find from entrepreneurs all the time is it always ends up a lot taking a lot longer time to get their business started. It’s always a little bit slower than they expected. And it also costs more than they had anticipated. So you need to have a “cushion” to make sure that you can pay all your expenses on time, so that you don’t fail and go out of business before you even get started!

So, how do you go about getting the funding in the first place?. You could work at a job for a number of years to save your money. You may have had investments that you want to cash in on to start your business. Maybe you have some family member who is able to help you out. You need to be creative. While your bank or building society may be your first thought, many people are likely to be disappointed because the banks have really tightened up their lending criteria in recent times. But don’t despair. Many very successful entrepreneurs have started off from very humble beginnings, borrowing money on credit cards, payday loans or even by way of an overdraft to get their plans off the ground. In addition there may be a local scheme operating in your area to provide start-up funding. Do your research, because their are lots of specialist lenders out there such as alpha loans who may be able to come up with the package you require.

In general in these uncertain financial times saving your own money (or borrowing it) and investing in yourself is a great idea. Make sure to keep your costs down to the greatest extent possible. And definitely always make sure that you save a little extra money for your business than you thought, because many times things are more expensive than people anticipated, and sales might be slower in the first year than you thought they might be.

Posted in Business, Personal Finance

Debt Consolidation: The Pros And Cons

Lots of people these days find themselves mired in debt and finding it really difficult to meet the necessary regular payments due on credit cards, overdrafts or other forms of borrowing, such as loans from payday lenders. If you find yourself in that position then the prospect of freeing yourself from having to pay several different standing orders or direct debits every month in place of one payment on a debt consolidation loan can seem an attractive prospect. But is this the right course of action?

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The rationale behind the idea of a debt consolidation loan makes good sense – you take out a new loan from a single lender and use those funds to pay off the debts you have from a number of disparate creditors. The main idea is that you end up paying out less each month under your debt consolidation loan than you did with the previous debts you were trying hard to service each month. The downside is that your new loan will probably be taken out over a longer period of time, so as to make the monthly payments more affordable, which in turn means you will eventually end up paying more interest over the term of the loan than you would if you had perservered with your existing arrangements. You may also have to settle an early redemption fee or fees to your existing creditors for paying your accounts off early. Notwithstanding this, many people are happy with this trade-off because it makes life more manageable.

There is one thing you also need to be wary of if you do decide to go for a debt consolidation loan. Try not to let your new arrangements lull you into a false sense of security. You still owe the same amount – or maybe even a little more – than you did at the start of the process,. If you have managed to reduce your monthly payments you may be tempted to be a little more relaxed in your attitude to your outstanding debt. Try not to let this happen. If you have to consolidate your consolidation loan, then you will find yourself in an extremely difficult situation, trapped in a spiral of  debt.

Posted in Personal Finance

Banks Continue To Make Money While The Rest Of Us Struggle

Banks are the most heavily subsidised businesses in the world, specially protected by governments. While the money runs out for the rest of us, the largest private banks still thrive. This is because they get the biggest subsidy of them all – the licence to print money.

Hard to believe? Martin Wolf, the Chief Economics Editor at the Financial Times, said it recently: “The essence of the contemporary monetary system is the creation of money, out of nothing,by private banks’ often foolish lending…” You heard that right. Private banks create money out of nothing! Then they loan it to us and ask for interest on top!

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If you’ve ever wondered why the bank buildings around the world soar higher than any palace or spire ever did, you now have the answer. But the banks don’t simply print money using secret printing presses in their basements. They don’t have to. Like so many other things these days, printing money has now gone digital. With the popular use of debit cards, electronic fund transfers, and internet banking, only 3% of the money in the UK is now made of paper and metal coins. The other 97% is entirely in computers.

Electronic money is convenient for everyone, but it’s especially convenient for the private banks, since they own, run, and control the entire digital money system. And what do they do with this special privilege? Do they channel new money, the blood supply of the nation, towards the things we need like hospitals, schools, universities and public transport? Not if it doesn’t make a profit for them. Instead they use their licence to print money to gamble on the financial markets and pushing house prices out of reach of ordinary people by pumping hundreds of billions of pounds into risky mortgages. This is exactly how the banks caused the financial crisis, and now the rest of us are being asked to pay for it.

While bankers benefit from obscene bonuses- a reward for failure no less – the rest of us are having to struggle by as best we can. More and more of us are having to juggle our household budgets by making use of all types of credit facilities, from credit cards, overdrafts and even in increasingly large numbers, payday loans. In the event you need to go down this route, make sure you choose a responsible lender such as Blueskyloans.co.uk or you may end up regretting things.

If we can’t afford to run hospitals and build schools, can we really afford to subsidise the financial industry? Should we have to live with less so the bankers can have more? This is ludicrous, and it’s time to put a stop to it. The private banks can’t be trusted to hold the reins to our entire economy. We need to take away the bank’s power to create money out of nothing.  This will stop them from causing yet another financial meltdown and allow us to afford the crucial services that we as a society need.

Posted in Business, Economy, General, Personal Finance