Business Finance

Financial planning is the application of planning to various aspects of finance function. Basically, business finance involves the formulation of a financial plan that states the quantum of finance required, the pattern of financing and the policies to pursue for the administration of the financial plan. A business enterprise requires short-term and long-term capital. The total capital required by a concern is called capitalization. The short-term capital or the working capital is the capital required to meet the day-to-day obligations or the operating expenses. The long-term capital is required to acquire the fixed assets. Generally, on a conservative ground, a portion of the working capital is also met out of long-term capital.

The capital required may be collected from different sources. A substantial share is raised from internally generated funds. The remaining part is raised from outside sources such as issue of shares and debentures and loans. This pattern of financing is known as capital structure. It is designed in such a way to obtain the required amount needed at the lowest possible cost. Once the required amount is raised, then the funds are allocated in the best possible way to obtain the maximum benefits.

Implementing proper control systems can ensure the efficient use of the funds. Finally, all-important matters are reported to the top management to take proper actions at the right time. The financial reports are analyzed to evaluate the performance of the firm. According to Cohen and Robin, business finance aims at determining the financial resources required meeting the company’s operating program. Business finance also forecasts the extent to which these requirements are met by internal generation of funds and the extent that they will be met from external resources. Business finance helps in establishing and maintaining a system of financial control governing the allocation and use of funds.

Business Finance Software

Business finance software is fast gaining popularity, especially in computerized financial planning systems. At the heart of a computerized financial planning system is a model that specifies the relationships relevant to the firm. A computerized financial planning system helps in preparing proforma financial statements, estimating the requirement of external funds, and calculating a variety of ratios. Such a system naturally offers a number of advantages. Once the model has been developed, the tedium of manual computations is eliminated with the help of business finance software. The circularity problem is easily tackled as the computer can quickly perform the required iterations. Finally, business finance software can be employed very conveniently to perform sensitivity analysis.

Thanks to the above advantages, the computerized financial planning system strengthens the firm’s planning ability. However, there is a potential disadvantage associated with it that may be overlooked. The ease that computations can be performed with the help of business finance software and forecasts generated may result in misdirected efforts. A large quantity of low-quality predictions may be churned out creating confusion and on the part of management. Quality may be sacrificed to quantity. To guard against this danger, greater thought should be given to the scenarios evaluated and the quality of analysis when using business finance software.

With electronic data processing, it is possible to handle large amounts of data and to make information available to a large number of people. Thus, one can obtain, analyze and organize timely data quite inexpensively by using business finance software. But it must never be forgotten that data is not necessarily information. Information must inform someone. With the help of business finance software, you can use computer graphics. It can inform visually, displaying important company information. Managers can now quickly display a colored map showing their competitive picture instead of computer printouts for information.

Financing Basics

The term financing is commonly used to explain the acquisition of loans from banks or other financial institutions. Financing is usually provided to business owners, either to be utilized as start-up capital or to support an on-going business. Some businesses may require financing to help them through a rough patch, or simply to provide some liquidity until more current assets are turned into cash. Additionally, financing is also given to companies who are expanding their businesses rapidly and require the money to support their new operations and facilities.

Due the high interests and high risks that come with financing, small business owners are often compelled to evaluate their situation from all angles before making a financing decision. This is because there is a full range of loan types available in the market, each of them for different purposes and with different interest rates, repayment terms and loan terms. Apart from that, business owners do not want to miscalculate their loan amounts, as obtaining a greater loan value will mean a higher liability to the company, while getting a smaller loan will produce a situation of inadequate financing.

Inversely, banks or financing institutions function to provide financing facilities in order to make profits from the interest payable by the borrowers. In return, they obtain a monthly repayment amount from the company, including interests. Banks usually provide loans through the pledge of fixed assets to the banks as collateral. In the event of payment default, the lender will sell the assets to recover your debt to them. However, there may be cases that lenders provide loans without the need for collateral, but with a higher interest and more stringent qualifying procedures.

Apart from obtaining financing from lenders, small business owners are also eligible for loans from government fund agencies such as the U.S. Small Business Administration (SBA) or the local state governments. These agencies provide financing to help spur the growth of small businesses in the country, and usually impose criteria that are more flexible as compared to banks. In the Small Business Loan program run by the SBA, they act as a guarantor for the borrower in order for them to obtain loans of a longer term from SBA’s lending partners.

All the financing sources mentioned thus far are generally known as debt financing. This type of financing would be ideal for companies that have a high equity to debt ratio, which means that the owners of the company has invested more capital as compared to the amount of debt obtained. However, in cases where the equity to debt ratio is low, it may be difficult for a company to obtain debt financing. Therefore, the alterative to this would be to work with equity financing instead.

Equity financing would be funding obtained from friends, family or employees in exchange for shares in the company. Additionally, venture capitalists are also another source of equity financing, which has become a common source of income especially since the dot com boom.

Venture capitalists are professional investors and are prepared to take a very high risk in exchange for their investment. However, with the involvement of a venture capitalist, more stringent management and accounting procedures may need to be adopted, in addition to the inclusion of the venture capitalist in making major decisions.

It is not easy obtaining financing from venture capitalists as they expect high rates of returns for their investment in return for the high risks incurred. Many applicants are screened through yearly, with only a handful that will actually be funded. In addition to that, venture capitalists expect to grow their companies into regional brand names within a short period of time. Getting the company publicly listed is also one of the main objectives of venture capitalists.

In short, there are many avenues in which financing can be obtained. Ultimately, it is up to the business owner to decide on the financing source that would be most suitable for the company. As there are pros and cons to each, a financial and situational evaluation on the company would be most helpful for making the right decision.

Personal Finance Online: Goal Setting With Students

Students come with a wide variety hopes, dreams and needs. While many of them share the same goal – getting an education – very few of them are prepared for this critical stage in their life when it comes to money. While they all practically live online and are permanently glued to smartphones, only the very smartest conduct their personal finance online.

Goal setting with students is relatively easy to explain because they completely understand the concepts of choosing what they want and implementing a plan to achieve it, but while they are encouraged by educators who provide them with a goal setting template by way of lectures and seminar timetables, they each have to take responsibility to create their very own goal setting worksheet, timetable, study plan, and pin it to their wall.

So why don’t people take the skills they learned while goal setting with students, and apply them to the world of personal finance? After all they ‘live’ online so why not train, learn and plan their personal finance online too? The answer comes in the tools available and knowing what to do with them.

There are four areas where personal finance online can be enhanced with students, and goal setting is only one part of a process which touches all four areas.

Earning Money As A Student

First jobs are character building for students. They get to find out what they enjoy doing, and what they hate doing. Earning money as a student allows strong developments in skills such as influencing people, task management, reading situations, and making judgments.

The best earnings goals though, are the ones which enhance entrepreneurial flair, independent choices, and return financial rewards. So many students ignore this, thinking a job equals money equals spending. The smartest thing to do when teaching goal setting with students, is to give them the skills of personal finance, knowing the value of their earning, and the ability to make money not take money.

Saving Money As A Student

Independent money is a thrill like no other for a student, and the impulse to use it to the fullest extent normally extends to living life large, in the moment.

Yet remembering the famous marshmallow test by Professor Walter Mischel, one of the core principals of sharing goal setting with students is that of delayed gratification – the skill to wait until later to enjoy the money.

Saving money as a student therefore is a pillar of personal finance online because when a student understands the concept of “Pay Yourself First” they will save. Tools which track and coach personal finance online help in this financial goal setting because it allows the student to see where their money goes, see what are expenses versus expenditure, and minimise the waste that can only come from the typical hedonistic student lifestyle.

Spending Money As A Student

Students need no help to spend money, it’s programmed into them long before concepts like personal finance online are ever introduced to them – but spending within a structured thought process is a central tenet of financial goal setting with students. Informed and considered thought before splashing out the money does not have to make a students life boring, and it can avoid a lot of pain later.

Since there is a lot of shopping online as a student, it is easy to adopt these four questions when considering personal finance matters online. This as true in London England as it is in any other place with students.

Do I need it?
Why Do I want it?
Will it impact the rest of my Month?
Does it affect my Debt?

Investing Money As A Student

Students are not known for their wealth,but considering the power of financial goal setting with students as described above, the principles of adopting personal finance online would not be complete without investing.

Even a small about of money invested while a student will grow massively due to the magical impact of interest compounding. The rewards for students who invest significantly outweigh the risks, since rather than save, they are actually giving every penny a purpose when following the principals of personal finance online because it can be seen, tracked, followed, and enjoyed all through their core activity – being glued to the internet.

Budgeting in personal finance is not the shiniest activity, but a concentration on this subject can be exponentially rewarding. Done effectively, it can become the core skill in money management and is a must-have objective while educating on goal setting with students. This way they can avoid or minimise debt, pay it back faster, live within their means and not beyond their means.

Finance Companies – Tips on How to Select the Best

Finance companies are designed to provide leasing or hire purchase contract to many business owners. They are there to help you achieve your business or investment opportunities. There are many things that you need to put into consideration when you are looking for one that will provide you with the services that you need. You will need to do research since there are many finance companies that have come up in the market, making it competitive. Some of them provide funding with the aim of marketing their products and/or services.

Others are part of major banks while there are those who are members of financing and leasing associations. Since there are many finance companies out there, it is only advisable that you search for one that has a reputable background. A good reputation and the fact that the company is a member of the finance and leasing association is the kind of company you want to deal with.

When you settle for a particular finance company it is also vital that you fully comprehend the contract you have with them. It should be in agreement with any verbal or written quotation. They should openly inform you of any penalties that may be incurred in every situation of the agreement. You should avoid companies that have hidden prepayment penalties. It is important that you are aware and understand the terms and conditions of the company before you sign on the dotted line.

If you are leasing equipment from the company, ensure that it is new or in superb condition. Be aware that once you select a finance company that you are in a long term agreement. It is advisable that you go for a company that can give you the flexibility to change between the fixed and floating rates without charging you extra.

5 Things To Look For In A Car Finance Company

Sometimes choosing a finance company can feel like something of a lottery. You look at all the deals available, choose the one you like the sound of and hope that it is a good deal and that the company offering it are sound.

But by applying a few set criteria you can actually shop around and reduce the risk of going with a company that isn’t what you are looking for in a car finance company. But what criteria should you be using?

5 Things To Look For in a Car Finance Company

Price. No matter what you read about choosing companies for finance, price has to be an important aspect of your consideration. It is a simple fact of life that no matter how good the approved auto loan offers are, we have a budget that we can’t afford to break. Stick to your budget and you’re avoid problems. So shop around and make sure that you are only dealing with companies that can give you approved car finance deals that are within your budget. Getting a good car is important, and applying for credit may help you get a better car today, instead of saving money gradually. Still you don’t want to break the bank.
Trust? Can you trust the company that are offering you approved car finance? And before you answer yes or no have you looked around and compared the deals? Every company develops a reputation, whether good or bad, so it is important that you find out what that reputation is. Ask people that you know, ask on car forums, Google their name (and remember that all companies get some complaints – and what’s even worse, many companies get fake negative ratings from competitors).
Age. You want to know that a company that is offering you approved car finance is not some shifty company that will end up going bust next month and forcing you to repay all the money you borrowed over night. So make sure that they are a company in it for the long haul… and a good indicator of this is how long they have been around.
People. Can you get in touch with actual people? It’s all well and good being offered a good deal by a company but if you can’t speak to anyone when you have a problem then that can be a huge issue. Make sure that there are REAL people involved in the company. A tell-tale sign is the presence (or a lack) of a phone number on their website.
The Fine Print. It is amazing how few people read the fine print after they sign their documents. They get too excited about the money and the car. But the fine print can be vital to any deal.

Such things as changing interest rates, fines for late payment, what control they have over the deal etc can make a massive difference to what you thought was a basic auto loan offer. So apply your due diligence and check out what they are really offering you by reading the fine print and asking questions.

Finance Online Help – How to Manage Your Personal Finances Using Online Services

Finding Finance Online Help is possible if you need help in dealing with money troubles or other financial difficulties. You can find a great deal of financial help for your household finances, online loan applications and even applying for a personal loan online with online finance help sites, without paying the cost of high fees.

Dealing with financial planning is not something most of us enjoy, particularly if there is not so much coming in to actually plan with. However, it is necessary to properly manage our personal finances otherwise it could be too late once a downturn or emergency hits us.

Most of us turn to credit and bank institutions to help us through, which can compound the problems. Seeking out help from online financial help sites, blogs and services is a good place to start to discover valuable ideas to consolidate debts in order to lessen your payments or how to manage your tight budget as well as how to bring in some extra money from other sources.

If you want to seek out free finance online help websites you will be surprised to find you can organize your household finances and personal money issues for wealth building without paying a cent. It has never been easier to get help online and there are a ton of tools and articles that can help guide you to success.

The type of help you can expect to find with online finance sites will come in the from informative articles on managing your personal loan online, household budgeting, free personal accounting software downloads, to advice on debt consolidation, refinancing and getting financial aid, household finances and online loan applications. You’ll even find budgeting spreadsheets as well as free software to download as well.

Let us cover a few of the best online help services for managing your personal finances:

• First is YouTube. There are plenty of resourceful people giving so much advice and how tools on all sorts of money issues.

• Second is the Mint.com. It is a completely free website to help with personal finances, budgeting and expense tracking that includes a number of helpful tools and suggestions for reducing your expenses and tracking you’re spending.

• And of course there is always Google Search: This search engine contains millions of sites that give a wealth of information on just about anything from experts covering on topics from investing in gold to bad credit repair.

The benefits of getting online financial help means you don’t have to sit through presentations, waste your gas, pay for parking, or worst, waste your time and money, getting the wrong type of advice.

Car Finance Company

Having a new car is one of the biggest achievements that most people can have. Other than financing education and buying a home, there is really nothing else that can compare to the huge expenditure that comes with purchasing a new car.

Therefore, only a few people can really afford to pay for a car outright. Most people rely on car financing in order to purchase a new car. But with the many car financing options available nowadays, it is wise to research thoroughly for a car financing company that offers the best rates.

Most car financing companies offer better deals compared to local car dealers. While it is convenient to have your car dealer provide you with the loan and plan, it is still better to get pre-approval from a car financing company because they offer more reasonable interest rates and payment options. To choose the car financing company with which to conduct your transactions, you have to consider two things: their rates and reliability.

Car financing companies vary on the interest rates they offer to customers. If they have seen that you have good credit history, the interest rate on your car financing loan may not be as high compared to a person with bad credit history. And if you really want to secure car financing with low interest rates, you should try looking for an online car financing company. By applying for your loan online, you save the company time and money, thus the savings from the cost of doing business are passed on to you.

In addition, you should also check the credibility of the company, especially if you want to do your transactions online. You have to make sure that the company you choose has been in operation for years. Aside from this, you can also ask your colleagues and friends who have already secured car financing from a car financing company about their experiences in loan application. They can recommend a suitable company to you.

Finding a car financing company for your loan application can be difficult if you do not know what to consider and where to start your search. But if you go online and ask trusted sources for their recommendations, you can easily compare car financing rates and select the best deal for you.