Finance Books

When financing a classic car purchase, your best option is to choose a specialty lender that deals with classic cars and collector cars. You will likely find a better interest rate, longer loan terms, and go through less work than if you choose a typical lender. This article will show you how to finance a classic car purchase, and what pitfalls to look out for.

The main reason to shop around specialty car loan lenders is the less hassle you will have to go through. These lenders deal with classic and collector car loans all the time, and they can help guide you through the purchase. Standard lenders sometimes use Kelley Blue Book or NADA price guides for classic cars and that just won’t work, especially for hot rods and other customs or special editions. Having original parts and other unique options on a collector car can add value, and specialty lenders understand this. Specialty lenders can also extend the loan term, sometimes up to 12 to 15 years depending on the amount being requested. Typical auto lenders generally go up to five years.

Before you even start the loan process, you will want to check your credit score. If your FICA score is around 600 or lower, you may have a difficult time getting a loan. Anything in the 600’s and you may qualify, but you may have a higher interest rate. Anything above 700 and you should have no problems securing a loan, plus you will get the added benefit of having a lower interest rate. Any lender will require 20% down on a classic car loan, and usually 30% for a hot rod.

Most specialty lenders do not require you to have a car ready for purchase before applying for the loan. You generally have 30 to 60 days after being approved to find a car, otherwise you may need to go through the approval process again. When determining the loan amount, do not forget about hidden costs of purchasing a collector car. Odds are, especially if you are looking for a certain model, color, option, etc. that you will not find it in your area. The internet can be a great tool in helping you find the exact car you are looking for, but that car is probably in another state or region, requiring travel and transportation. You may want to travel to see the car, which will cost money, and you will need to transport it back if you do not want to drive it. Depending on how far away the car is, driving it may not be an option due to strict insurance restrictions. All this may be able to be rolled into the loan amount. Talk to your lender about these options.

Many lenders require an inspection of the car by a qualified inspector. The lender will be able to help with this, since they probably have certain inspectors they require you to use. Many buyers choose to have their car inspected before purchase anyhow, so make sure you talk to the lender before deciding on an inspection company. If the inspector you choose is not certified by your lender, you may be required to purchase another inspection, costing hundreds of dollars more.

Even if you have the money saved to buy a collector car outright, it may be in your best interest to pursue a classic car loan. Over the last 15 to 20 years, the value of collector and classic cars have gone up sharply, sometimes 10% or more a year. Considering a classic car loan is probably 6% or so, this makes borrowing the money an investment. But be careful during these economic down times and do your research. Rare and original models are still going up in value, but clones and other mid models are not rising in value as fast as they once did. This could change at anytime though.

There is no better feeling than driving around in your new classic car. Hopefully this article will help you in securing a low interest loan, and speed up the process so you can drive around town in your new ride, rather than dealing with headaches you may have by going through a typical lending company.

Getting a good education is crucial these days, and where you get your education is also crucial. How to access first class schooling when funds are low? Let’s face it, few people can afford the high college fees, and if you add to the list the price of books, life in the campus, and whatnot, overall cost skyrockets. So what to do? Should you give up your dreams and settle for less? No way! There is still hope for you, read on and find out more.

Make Money With Part-Time Jobs

I know what you are probably thinking, being a full time student and working at the same time can be extremely stressful, but still, there are certain part-time jobs which are ideal. It is all about choosing the correct job opportunity. Tutoring or private teaching is a great source of funds and it is not specially time consuming. Are you particularly good at one or two subjects? Make the most of it! Another good source of income are pets, people are pet-crazed nowadays, offer to walk their dogs, to bathe them, anything counts! Be creative, there are many profitable activities that do not take up much time!

Apply For A Scholarship

Scholarships exist for one reason: to help people financially and make it possible for them to attend college. There are many different types of scholarships, and surely there is one for you. People often decide not to apply for a scholarship for various reasons, most of them foolish. Some believe their GPA (grade point average) is not high enough, when most scholarships require a 3.0 average, and several do not take into account this criteria at all. Others do not know where to look for a scholarship or think they will not get one because their parents have too much money. Universities can give you information on where to apply for one and many of them are merit-based, which means that your academic achievements are what counts. As you can see, getting a scholarship is nowhere near difficult.

Loans, Do Not Be Afraid Of Them

You have tried everything else, all to no avail? Do not panic. There is still a way of financing college without resorting to desperate measures. Banks and private financial institution offer student loans which are specially tailored for students, as the name suggests. They can also be granted to the parents, which often offer better terms and lower interest rates. Payback plans are flexible, and many lenders offer a six month grace period after finishing college. Government student loans and federal student loans are also available, but they offer lower sums of money. Perhaps the idea of taking a loan does not seem appealing to you, but more and more students are thinking of loans when it comes to college funding, and it is working out for them.

Truth be told, being low of funds and in need of finance is never a walk in the park, it is up to you to find the way out of the maze and into a first class college. What you need to know is that it can be done, it may be hard sometimes, but it is not impossible.

To anyone who has been denied a bank loan for a small business, it may seem that the proverbial door of opportunity has closed. Many choose to continue looking for a solution. For most that are determined to start a small business, alternative business financing can be a feasible solution.

There are several types of alternative small business financing available to entrepreneurs, but it’s important to understand the risks involved. Some financing alternatives include factoring, commercial credit lines, advance-pay programs, purchase-order financing and supplier-guaranteed lines of credit. Even these widely accepted alternatives have risks including higher interest rates attached to private and commercial finance lines, and reduced realized profits-primarily with factoring loans and cash advances paid against Visa or MasterCard merchant account receipts.

As every situation is different, it is important to weigh these risks and how they can affect your small business’s bottom line. In the case of credit card advances, if the 7%-15% that the lender requires for each card swipe still nets your business the revenue it needs to remain profitable, then accepting a loan to get you through a rough spot could be a viable answer. Similarly, if receiving a loan for 70% – 80% of your accounts receivable balance will bring your books out of the red, then the ‘risk’ may not seem high.

There are 3 primary factors to consider when seeking alternative small business financing.

-  The first is the overall cost of the type of small business financing you are seeking to obtain. Beware of hidden fees and other costs that may not be disclosed by the lenders early in the application process. Fees typically appear during the closing, added to the total amount financed upfront.

-  The second factor to examine is how will affect your taxes. It’s often overlooked but a crucial part of consideration. If realized when it’s too late a business owner may be able to save on taxes through appropriate deductions and annual renewals.

-  Third and finally, be aware of how your small business credit score will be affected. Think about how much the small business loan will actually cost over time, with the other implications excluding the monetary expenses.

Sincerely,

Ilya Bodner

small Business Owner

Initial Underwriting Group

“Truckin got my chips cashed in. Keep truckin, like the do-dah man.

Together, more or less in line, just keep truckin on.

Arrows of neon and flashing marquees out on Main Street,

Chicago, New York, Detroit and its all on the same street.

Your typical city involved in a typical daydream

Hang it up and see what tomorrow brings…”- The Grateful Dead lyrics

to their song, Truckin’.

“There is a road, no simple highway, between the dawn and the dark of night, and if you go, no one may follow, that path is for your steps alone”- Jerry Garcia quotation.

Many books have been written about the Greateful Dead and about Jerry Garcia. It has been written that they succeeded “in spite of themselves”. The lyrics of Truckin’ suggest a meandering of purpose albeit a desire to get somewhere. One might say that Jerry Garcia was telling us that there is no simple way to success. You have to find your own way there.

One of the greatest impediments to success in the trucking business is getting paid on time. What if it takes 30 to 60 days to be paid after you have delivered the goods to your customer? How do you pay for fuel, insurance, equipment leases and wages? Accounts receivable financing may be your answer. Once you have a receipt/bill of lading for delivery and an invoice that can be confirmed, you can receive an advance of 80% to 95% of the funds due to you. When your client pays, you receive the remainder due, less applicable finance charges.

Johnny Cash wrote in his song “Further On Up the Road”:

“Now I been out in the desert, just doin’ my time

Searchin’ through the dust, lookin’ for a sign

If there’s a light up ahead well brother I don’t know

But I got this fever burnin’ in my soul

So, Let’s take the good times as they go

And I’ll meet you further on up the road”

If you are “Truckin’” accounts receivable financing may help you get “Further on Up the Road” to your financial success. Why not just go to your bank for all the funds you need to grow your business? If you have great credit, two past years of successful operations, excellent bookkeeping, and no major needs for substantial growth your bank may be the best choice.

If the bank says “no” to your growing company’s needs because you do not meet their qualifications, accounts receivable financing can accelerate your cash flow to pay your payroll, your fuel, insurance and other costs. You can take on new business opportunities and grow successfully by managing your cash with this proven method of commercial financing.

Here are some questions to ask yourself: Do you need a back office to help you with your collections and operations? If you company is a startup, you may want a commercial finance company to handle one hundred percent of your collections. If your company is established and you have administrative personnel, you may not want a third party talking to your customers regarding collections, especially if you believe these contacts may cost you business. Perhaps you want something in between regarding collections, where you can be the “good cop” and the commercial finance company’s collection department can be the “bad cop”.

Do you need credit check on prospective customers? Do you need help with legal or regulatory compliance issues? Are you in a cash crunch emergency that requires you to make a decision in a very short time such as one to three days? Do you have the time to read and compare proposed terms from several commercial finance companies just as you might if you were getting a loan on your home? Are you computer literate and will you have online access to your accounts? Lastly, is the cost of these extra back office services worth the extra expense you may be charged?

Here are a few legal issues to think about: Are you required to sell all invoices for a particular shipper or can you pick and choose which invoices you desire to sell? What does the contract say about choice of law? If you have a dispute with the commercial finance company and your headquarters is in California, will the dispute be pursuant to California law and California courts, or will you be agreeing to settle any dispute in a distant state such as New York? Can you afford to go to New York? Are you giving up your right to litigate disputes with a mandatory arbitration clause? Is there an attorney’s fee clause in the contract so if you have a dispute and win, your attorney will be paid?

The bottom line: The Grateful Dead and Johnny Cash were right: keep on trucking further on up the road with accounts receivable financing; and choose your lender wisely.

Copyright © Gregg Financial Services

www.greggfinancialservices.com

By Christopher Yuskiw, Guest Contributor

So, you’ve made it two years and are now entering your third year in business.  Congratulations!  You are no longer a start up!  If you’ve been in business for two years or longer, most banks will view you as an established business.  What does this mean?  Well, it should mean that you won’t have to jump through as many hoops as you had to while seeking out start up capital.   By now, your business should have a stable cash flow cycle and there is hard evidence of the business’s revenue.  The more stable your cash flow, the easier it is for banks to better understand your business, which should help them to be more comfortable with lending your business money.

Again, while each deal is different, there are some common things you can do to determine how likely you will be in requesting credit; you should also keep these points in mind while preparing a credit request.  You should really perform your own “acid test” prior to submitting your request so that you aren’t caught off guard by a bank’s decision.  Banks will initially use the following five metrics to determine how credit worthy the business is:

1. History

Prior year results, two or three years of year end financial statements, will be used to determine the business’s trend; banks like to see positive net income and a positive trend.  Be prepared to provide at least two years of business tax returns.

2. Debt Service Coverage

Debt Service Coverage will be used to determine how much of the business’s income is being use to pay debt.  To determine your DSC, take your free cash flow (net income + interest expense + depreciation expense) and divide this by the sum of all the debt payments (short and long term).  Banks typically like to see this number above 1.2, the higher the better though.  Don’t forget to include the projected payments of the request in your calculations.  How much of your income is being used to pay off debt?

3. Debt to Worth

Debt to Worth will help the bank to understand how leveraged your business is. To determine your DTW, divide all of the business’s liabilities (short and long) by the retained earnings (net worth) of the business.  Typically a 3 to 1 ratio or better here (i.e. 2 to 1 or less) is what a bank hopes to see.

4. Collateral Coverage

Collateral Coverage is the amount of assets that the business has to put up to secure the deal.  Collateral includes everything from real-estate, accounts receivable, inventory, equipment, etc.  Anything that has tangible value here counts.  Banks typically like to see a collateral coverage of 1.20 or higher; this means that your business has $1.20 worth of collateral for every $1.00 in debt you have. If your business doesn’t have much in terms of assets don’t worry too much!  This does not mean that you won’t be able to get financing; while this might reduce the options available, or the amount you can apply for.  There are ways to get financing when you do run into a collateral shortage; the SBA is often utilized to help with a collateral shortage.  Also, if you are purchasing real estate or equipment, this will help with collateral coverage.

5. Guarantor Strength

Guarantor Strength, i.e. credit score and personal net worth, will be factored into most decisions.  The stronger the personal guarantee, the more comfortable the bank will be.

Again, while each deal is evaluated on a case by case basis, these five things should help you get a feeling of how your credit request will go.  Other factors to be aware of include: industry risk, fall back capital, economic conditions, and institutional appetites (some banks don’t like certain risks on the books).  My advice is to start at the bank you know and go from there.  If you and your business have an existing bank relationship, then it might be factored into the decision.  Banks are becoming more conservative in today’s environment and they are not looking to lend money to new clients as aggressively as they use to.

One last note:  use the information above as guide and not as scripture.  Every bank has their own set of underwriting policies and procedures; what works for one bank might not work at another.  Also, if your business is light in one area but strong in another, then they might compensate for each other.

With 27 countries in the European Union and one of the world’s largest trading zones on our doorstep, there’s little wonder that more and more companies are turning to export as a means of boosting their business.

Exporting however, isn’t a step to be taken lightly and kick-starting an export initiative can be costly. The good news is that with thorough planning and the right finance partner, the rewards can be impressive.

A fundamental challenge facing exporters is cashflow. Demands on funds are huge and it’s easy to find them spread more thinly than is comfortable: there’s the investment required to seek out potential markets and the need to offer attractive terms of credit in order to win new contracts and customers.

Funds are also needed to finance the growth stimulated by the export drive and all this is going on against a fund-sapping back drop of varying time zones, currencies, languages and trading rules and regulations that may slow down payment and tie up funds for longer than anticipated, leaving the business starved of cash when it needs it most.

Traditionally, exporters have relied on Letters of Credit to help alleviate these pressures and protect themselves when trading with overseas customers. These could be costly to put in place, but worked well when goods were moving slowly and at irregular intervals because they ensured that the exporter would ship within a given timeframe and that the importer would pay the invoice in full by a specified date.

Today the export process is quicker and Letters of Credit are largely outdated. Goods are being shipped faster and documentation often lags behind. Thus, customers are becoming less interested in doing business with suppliers that insist on using Letters of Credit because they have to commit funding to support purchases up front and deal with an excess of paperwork. To be competitive it’s essential to be prepared to base your export initiative on ‘open account’ terms – issuing an invoice on the despatch of goods or services and giving the customer somewhere between 30 and 90 days to pay.

It’s not difficult to see how crippling this could be for the exporter. Even assuming he’s done his homework – and it’s essential to verify the credit-worthiness of potential customers as thoroughly as possible before entering into any overseas transaction – the risks of payment default are much higher than in the domestic market.

But all is not lost. The key is to find the right funding partner and funding mechanism to help alleviate the risks associated with exporting and stabilise the cash flow required to fund it.

Factoring and invoice discounting fit the bill perfectly.

These have been well documented at home; reputable providers tailor flexible funding arrangements to meet the specific needs of clients based on the value of their debtor book, releasing up to 90% of the value of outstanding invoices back to the client immediately and taking responsibility for collecting the debt when it falls due. In the past 12 months nearly 48,000 companies have used this type of funding to help stabilise their cash flow and finance growth. This this is not going unnoticed by the export market.

Increasing numbers of businesses are turning to factoring and invoice discounting to support their export initiatives because it helps them to offer competitive open account trading without the risks. Not only will a good factoring partner investigate the credit rating of a potential customer on your behalf and establish lines of credit, he will assume the credit risk, give 100% protection against write offs, manage and collect overseas receivables and provide immediate cash advances against outstanding invoices.

Too good to be true? Not really. Certainly there’s a cost associated with such a facility, but it’s a variable expense based on sales volume and those entrepreneurial enough to take the plunge overseas should consider it a fair price to pay for the peace of mind and financial stability it brings to what could otherwise be a high risk strategy.

Capital is the crucial ingredient for any business to grow. This holds true whether you are a one-person firm with minimal revenue or a 100-person company with significant sales. Yet so many entrepreneurs and business owners complain about how difficult it is to attain. Here are just five of the numerous ways to access capital taken from the informative new book, Solving the Capital Equation. Use these ideas to spark your creative thought process and get the money you need to elevate your business.

· Form strategic partnerships. Consider the following: Who is already reaching your client or customer base? Who offers products or services that may be a great fit for your client or customer base? Who has a skill set or functional expertise that your firm lacks? All of these entities would make great prospective partners. Identify them, then craft a win/win partnership. Why spend money you do not have when you have something else of value to offer them – your firm’s product and services! You can use partners to access the sales force, marketing, IT, accounting, management expertise – to name just a few – of the services you would otherwise have to pay for.

· Barter. As a business owner, you have a product or service that someone wants. Otherwise you wouldn’t be in business. You can barter these products or services for those products and services you need to grow your business or service your customer. Or you could barter for personal items that you would typically have to withdraw funds from the company to pay yourself then pay for directly. You can barter for advertising, travel, legal or accounting services, televisions, landscaping, cleaning services…

· Find a strategic investor. Is there a larger company that would benefit directly from your service or product offering? If so, contact them. If you can convince them that your company can directly or indirectly positively impact their bottom line either through a sales increase or a cost reduction, you are likely to garner financing in the form of direct equity, a loan, use of their credit, prepaid contracts, or payment of development costs. Look around. Potential strategic investors abound.

· Tap your suppliers. Are you trying to rapidly expand your business and need money to pay your suppliers? Why not ask your supplier to advance you the money? If your expansion will contribute a sizable portion of your supplier’s annual receipts, you can induce the vendor to provide a 12-18 month loan by promoting how he/she stands to benefit. At the least, negotiate a 90-day payment arrangement.

· Seller finance. Who knows the business or asset better than the person or entity selling it? If you are growing your business through acquiring other businesses, seek seller financing. Give them a lien against the business so they get the business back if you default. Suggest it as a way for you to know you are getting what you paid for. Added benefit: reduces risks that the company has hidden problems which greatly decrease its value and that the owner would start another competing business.