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Friday November 24th 2017

10 Personal Finance Basics

What are the big things you are going to need to buy in the next few years? A car? A house? Financial goals are not as hard to establish as you may think, and they are the only realistic way to work toward the things you really need in life.

1. Identify Reasonable Goals

Financial stability means different things to different people. Figure out what you want to do with your money that would make you feel the most comfortable in the long run. Make a list of the goals you want to accomplish in the next ten years, and then make a list of the average expenses of each goal.

2. Prioritize

Once you have your list of goals put together, look at each item and rank it in order of importance. For example, sending your son to college would probably rank higher than taking a cruise to Alaska. Rearrange the list so that the things you want the most are at the top.

3. Make the Tough Choices

Not all of your big financial goals are going to fit nicely together. You may have to sacrifice one in order to keep another. Remember that every dollar you spend on one item is a dollar you won’t have available to spend on something that might be more important to you in the long run.

4. Plan Ahead

Give yourself plenty of time to achieve your financial goals. Take advantage of savings accounts and investments that will help your money grow over time so that you will have more when you need it later.

5. Practical Considerations

Remember to include goals that will help keep you and your family financially secure. Think about creating an emergency fund for unexpected expenses. Begin to build tuition funds for young children. Create retirement savings that will take care of you in your older days.

6. Include everyone who is Directly Affected

If you are married, make sure that you discuss your financial goals with your spouse. Talk with your children about the financial goals that include them.

7. Begin Right Away

Getting your finances in order is like going on a diet. It’s really easy to say you’ll start next week or next month and then never get around to it. Once you choose to create a solid financial plan, put it in order and start using it as soon as possible.

8. Maintain Discipline

Daily spending is the hardest to control. Every time you think about making a big purchase, remember what your goals are. If the goals are really important to you, they will be enough to keep you from blowing your cash on something you don’t really need.

9. Give Yourself some Breathing Room

Budget in some walking around money so that you never feel too limited. It’s important to have a little flexibility to purchase less expensive items when you want them.

10. Make Changes as Time Passes

As you and your family get older, your financial situation and goals will change. Revisit your plan every three to five years and make changes so that it fits reality.


Small Business Lending Basics

Businesses of all sizes frequently acquire loans for numerous needs. Before journeying into the world of company management and ownership, individuals require some knowledge of small business lending basics. Some lenders prefer to work with companies established for 3 to 5 years, while others readily assume the risk of new business ventures. Lenders provide various loan types to accommodate different business aspects including start-up expenses, cash flow, expansion, investments and inventory.

Small business owners must understand that each loan application, regardless of intention, automatically transfers to the individual’s credit report. Here, other creditors have the opportunity to view a company’s borrowing and payment history. For this reason, ensure loan acceptance by filling out applications thoroughly, providing all the necessary documentation and detailed business plan or records requested.

Pre-loan Preparedness

Company owners and potential owners must prepare appropriate documentation prior to the loan application process. An applicant must prove the ability to repay the loan and the commitment to the business. Part of the paperwork a first-time business owner requires includes personal financial statements, and 3 years of tax returns.

Financiers desire a well-constructed, detailed business plan, featuring monetary requirements, cash on hand, necessary equipment and facilities, collateral, projected income and expenses, in addition to contingency plans. Include personal experience and qualifications and the experience and qualifications of associates or employees. Established business loans require similar documentation, but also include profitability and loss records in addition to the company‘s tax returns.

Choosing a Business Partner

Consider a loan officer or creditor as a business partner. During every part of the company’s lifespan, this person or institution invests in the venture and expects a return on that investment, albeit the loan amount plus fees and interest. Include a personal bank as the first place of loan inquiry. As an established client, potential or established business owners already have a relationship with the facility. Acquiring a loan from a familiar environment may improve chances of acceptance.

Before choosing a specific financier, ask the lender for references or interview other business owners. Determine which facility treats clients fairly, provides assistance with applications and documentation, supplies entire loan amounts, and how the institution handles small business hurdles. Loan brokers evaluate the needs of small businesses and provide suggestions regarding other lending institutions. Higher rates accompany these loans for services rendered. However, in many instances, the firms supply approvals not otherwise easily acquired.

Loan Types

Small business applying for loans can expect interest rates ranging from 8% to 14%, plus application fees (typically <$100) and other stipulations. Beware of low cost loans that add hidden fees that in effect cost the proprietor more in the end. Loan types vary in the amounts available and the time of repayment. If desiring to pay off a loan in its entirety prior to the projected period, ensure no early repayment penalties apply.

Term loans require monthly payments over a specified length of time. Proprietors use short-term loans for needs that ensure a quick return. Companies repay the loan in one lump sum in a year or less. Line of credit loans provide small increments of money to generate constant cash flow. Many businesses acquire and pay off these loans annually.