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post5 - 10 Most Common Business Loan Requirements
July 25, 2017 0

10 Most Common Business Loan Requirements

In case you want to start, expand or save your business, you can avail to some of the best loan programs out [...]

Financing

post5 - 10 Most Common Business Loan Requirements
July 25, 2017 0

10 Most Common Business Loan Requirements

In case you want to start, expand or save your business, you can avail to some of the best loan programs out [...]

Business

post5 - 10 Most Common Business Loan Requirements
July 25, 2017 0

10 Most Common Business Loan Requirements

In case you want to start, expand or save your business, you can avail to some of the best loan programs out [...]

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10 Most Common Business Loan Requirements

In case you want to start, expand or save your business, you can avail to some of the best loan programs out there. Banks and lending corporations provide small to big loans custom-tailored to your needs. In order to pass a loan application, you should remember these common requirements lenders ask whenever you apply for a business loan:

Bank Statements

A bank statement is one of the most required documents if you want to apply for a loan. Lenders can use your bank statements to assess your transactions and your remaining balance. They will also check if you are still capable of paying debts or credits.

Balance Sheet

A balance sheet is a snapshot of the financial health of your business. It will determine your business’ nature, function and condition. How you manage your assets and liabilities are also stated in this sheet. Lenders can assess if you are good in financial management.

Business Tax Returns

Lenders need to check the business income, deductions, and credits. Further, the lender can evaluate if you are a good tax payer in which you annually file your tax returns. Some lenders also ask for personal tax returns.

Length of Operation

The length of the business operation can also determine the capability of the business to earn. Lenders should know how established and trusted your business is so that they can decide if they will invest on it.

Personal Credit Score

Through this, lenders can identify if you are responsible at managing your personal finances. A credit score above 700 may attract lenders, while 600 below may be difficult for you to secure an affordable loan.

Use of Loan

Lenders have the right to know what the purpose of the loan application is. You should be transparent if you will use the money for renovation, additional stocks, relaunching and other business purposes.

Size of the Business

The lender shall also know the size of your business. It can be identified by the number of employees – part-time and full-time workers and their payroll records. If you are applying for a small business loan, you need to prove that your business is indeed small. Lenders will also ask for the payroll records for the last 6 months to prove your claim regarding the size of your business.

Business Licensed & Permits

If you are an existing business, you must present business licenses and permits to validate the existence of your business. You can also show some relevant business loan approvals from previous transactions to show your credibility in accomplishing loan responsibilities.

Collateral Documentation

This is one of the most important requirements. Lenders would like to know the assets and properties you are willing to lose if you become unable to fulfill your loan payment. It may be the business itself, real estate property, equipment or inventory you use to make your products. Hire a certified appraiser to conduct valuation method and process on your collateral documentation.

Do you have all these requirements?

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5 Incredible Online Banks You Should Know

In this modern world, people prefer to make their transactions on the internet – from shopping goods to paying bills. They love the idea of “instant” compared to actually traveling to stores and payment outlets. Saving money in the bank can also be done in our homes. Digital banks or online banks have gradually gained popularity to the people.

Here are five of the most trusted online banks you can save your money with:

Ally Bank

11 - 5 Incredible Online Banks You Should Know
From the word ally, this bank boasts its 7,000 teammates who can be your relentless allies for all your financial concerns. They started during the 1920s in which they financed millions of cars for consumers. They have expanded their financing capabilities to home loans in 1989. Due to significant economic downturns, the bank reviewed their business. Until they converted into an online bank in 2009. Now, they continue to become one of the leading digital financial services companies in the world.

Capital One 360

12 - 5 Incredible Online Banks You Should Know
This bank was often called ING Direct. They are one of the original digital banks that is customer-driven. They offer financial services to individual consumers and businesses. They have a very competitive interest rate on your savings and their network of free ATMs is substantial. Their checking pays interest that is substantially higher than the national average of 0.04%. Further, if you love to travel, you can enjoy their 0% foreign transaction fee.

Schwab

13 - 5 Incredible Online Banks You Should Know
According to their website, you can save “up to 0.250% interest rate discount on eligible home loans”. They also boast their savings and checking account services with no ATM fees worldwide, no minimum and 24/7 banking. Schwab has some of the lowest ETF fees in the digital banking industry. One of the strengths of their checking account is their offer to reimburse you for all ATM fees with no limits. They also have various trading and investment programs.

Simple

14 - 5 Incredible Online Banks You Should Know
Simple has been launched four years ago and has rapidly developed a huge following because of their incredible customer service and fantastic financial banking programs. They have an FDIC-insured checking account which can help you save money. They offer free accounts with no hidden charges. Simple has also great budgeting tools that help you save up for bigger purchases. However, they lack competitive interest rates.

USAA Bank

15 - 5 Incredible Online Banks You Should Know
The United Services Automobile Association (USAA) is a Texas-based financial company that provides banking, investing and insurance services. However, this bank is not open for everyone, they only serve for military and the family of soldiers since 1922. They have property, casualty and life insurance, savings and checking account services and various loan programs. They don’t have any minimum balance requirements on their basic checking or savings. They also have minimal fees compared to other digital banks.

Before choosing the online bank fit for your preferences, you should know about their interest rates, programs and other services.

9 Industries that Make Use of Debt Collection

Debt Collection is a very convenient method for businesses and institutions to maximize their time in providing their service without the loss of income. Debt collectors can be internal or third-party and shall follow an etiquette in collecting the dues and financial responsibilities of the consumers. They shall be polite, considerate and professional. On the other hand, they also have to abide by their company rules.

Here are some of the industries which utilize debt collection services.

Retail and Service Collections

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Debt collectors can collect due accounts for retail and service businesses. These include businesses of plumbing, electrical, automotive, construction, childcare, grocery, restaurant, funeral and computer shop, among others. Some retailers and businesses provide goods or services without payment, thus, they hire debt collectors to receive the payment of the customers.

Medical Collections

22 - 9 Industries that Make Use of Debt Collection
Many hospitals allow their patients to be treated and discharged without payment or with balance. This is practiced by some hospitals in which they provide healthcare services to everybody regardless of status and financial capability. In this case, debt collectors will collect the dues of the patients. Some medical facilities have their respective debt collectors with custom debt collection programs which enhance the relationship between the hospital and the patients.

Government Collections

23 - 9 Industries that Make Use of Debt Collection
To maximize the government agencies’ time and opportunity to serve more people, they often entrust debt collectors to receive payments rather than in their offices. Debt collectors can collect a multitude of fees, taxes, fines, and assessment to cities, towns, municipalities and counties.

Educational Institution Collections

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Debt collection is also exercised in some schools and universities. They collect past due accounts and outstanding student loans. Debt collectors can also collect tuition fees, miscellaneous fees, and other special fees.

NSF/Returned Check Collections

25 - 9 Industries that Make Use of Debt Collection
This refers to the collection of non-sufficient funds, closed accounts and checks with no signatures. This also includes penalties and fees. The consumer will receive notifications regarding his or her responsibilities to the laws governing the writing of the bad check.

Telcom Collections

26 - 9 Industries that Make Use of Debt Collection
To prevent telecommunication companies to cut or terminate their service to certain customers, they do debt collection to ensure that account holders will be able to pay their dues on time. Debt collection is also done to those terminated or expired account holders with outstanding balances.

Financial Collections

27 - 9 Industries that Make Use of Debt Collection
Banks and other financial corporations usually have their internal debt collectors who go to the account holders and receive payment for loans, credit cards, mortgages and other transactions.

Commercial Collections

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This collection is made from business to business in which debt collectors receive payables from various companies and corporations. This specialized type of debt collection follows a standard to maintain the relationship of the businesses.

Legal Collections

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Lawyers, legal counsels, and judges often use debt collection to their clients. Debt collectors ask for the legal fees before trial or execution of service.

Some consumers are annoyed of debt collectors. But remember, they are only doing their job. Also, think about the many companies that are relying their survival on the fees that you will be paying.

Businesses in Small Towns

Making Your Business Grow in a Small Town

A small town can be a good place to create a very good business. With the place still growing and developing, establishing a business can be an opportunity to amass a big sum of wealth. Small towns being just small towns still don’t have all the kinds of services and products that the people may need.

This can help you with planning and designing your business plan. Good businesses for small towns don’t necessarily need to have a large sum of capital, being profitable is enough and you can do that with starting really small.

Opportunities in Small Towns

Opportunities in Small Towns

Small towns unlike cities are still incomplete in terms of the products and services available. This can mean a profitable opportunity to start good businesses for small towns. Offer services or goods that the town could potentially appreciate.

Find your niche and formulate great ideas by studying the essential statistics of the communities. Know what the areas of the town are lacking and try to start a business that fills the gaps. Opportunities in small towns can come and go and it’s vital that you work on being the first to come up with the unique business you have in mind for your town.

Good Businesses for Small Towns

There are plenty of good business ideas that you can establish in small towns. An entrepreneur can probably even start his journey to financial freedom by creating a start in local villages or rural areas. If you have the capital, you can pick from a selection of franchises or just create a retail outlet.

Opportunities in small towns should be realized and it’s your job to figure out how you can make the most out of those opportunities. There are many profitable and good businesses for small towns.

If you can make loans from a bank, you can get ahead faster with your financial options. Just remember to be able to pay your credit otherwise it could mean trouble for you instead of financial growth.

Making Your Business Grow in a Small Town

Making Your Business Grow in a Small Town

Business in small towns may or may not prosper. Bringing something new or unique in a small town can either mean good business or bad business. You need to know the attitude of the people in the area to help you determine whether a business may succeed or fail.

Making your business grow in a small town may be easy if your business plan has really been well planned out and organized. Remember to also determine and study the possible opportunities in small towns and know the ones that can be really profitable.

Remember that even in small towns, small businesses can be very effective. Just know the type of business you wish to do for the local community and make sure it will be profitable. If you plan on doing a business that seems common, try to give it your own twist and make it unique to add its value to the market.

There are opportunities in small towns and you have to make sure you grab those opportunities. Whatever small business you may wish to establish, make sure that your plans are all well organized and well thought out.

Factors That Determine Good Business Ideas

Well-Ordered Business Model

It’s hard to think of business ideas from a list that seems limitless. Some plans can be very effective from where you’re at and some may not be. However, there are business ideas that prove to still be very effective even if variables are a bit different such as geography and local culture. Here are factors that determine potentially successful business ideas:

It Needs to Be a Great Idea

It Needs to Be a Great Idea

Business ideas can come from different inspirations, one being from solving a problem. In order to acquire an excellent business idea, observe a community and try to identify one of their problems.

Trying to create and implement a solution to the problem breeds a brilliant business plan. Knowing the competition and making your business idea unique is one way of getting ahead which you need to do be come up with a successful endeavor.

Money to Crystallize Your Business Ideas

Any business of course needs monetary amount to start it up. Sometimes not just any monetary amount but a huge sum of cash. Business after all involves money. Save up before ever establishing a business to prepare for the worst-case scenario that could happen because they always do.

Grand business ideas would be a waste if you disregard the importance of having a good capital. There may always be ways to go about creating a business with less funds but it’s always better to have more from your own pockets.

Getting a loan can be a great way to acquire capital but it requires a lot of paper work and still a sum of money. Banks also ask documents to assure that you indeed are able to pay your loan.

Well-Ordered Business Model

Well-Ordered Business Model

A well thought out business plan surely separates a business from the rest. Having a good business strategy can ensure your success in the market. Any type of business idea won’t do without being first well thought out.

Planning is key and failing to do so is planning to fail. Study business ideas and learn from them to know the strengths, weaknesses, opportunities and threats and use the data you’ve gathered to improve your control over the market.

Planning is crucial and no entrepreneur should ever go without it. Learning how to deliver business ideas and knowing how to adapt to the ever-changing times constitute to a good business model.

One needs to truly understand and know what his business is, what his products are, to whom is he selling them to, why and what makes the business unique. Having a well laid out plan also involves already knowing how to market your business and getting the key people in your company.

Every single business ideas may come from a single thought. However, it’s the best ones that make it to the top of their industry and continue to rise because more than just having just an idea, they are created with plans.

Starting up a business requires an idea and capital but all of those may mean nothing without proper planning. Have all three and you will be on your way to creating a potentially successful business.

8 Common Types of Banks You Can Save Your Money

When we talk about money, the institution that generally comes in our mind is a bank. Banks accepts deposits for our savings accounts. They also offer a wide variety of loans and other financial services. Thus, there are 8 common types of banks that provide different services to consumers, businesses and large corporations.

Retail Banks

Retail banks are commonly known as consumer banks. They provide services to individual consumers rather than companies, corporations, and other banks. They handle savings and checking accounts. They also offer personal loans, home loans, auto loans, debit and credit cards, mortgages and other transactional accounts, among others. Retail banks are usually situated at areas with a greater number of people.

Commercial Banks

A commercial bank is a type of financial institution that focuses on business customers. They provide services such as accepting deposits, granting business loans and offering basic investment products. They also offer lockbox services, payment and transaction processing and foreign exchange.

Investment Banks

An investment bank is a specific division in banking that focuses on helping businesses work in financial markets. If a business wants to sell debts to investors or go public, they will seek the help of investment banks. They are also related to the creation of capital for companies, governments, and other entities.

Central Banks

Also called as a reserve bank, a central bank is an institution that manages a state’s currency, interest rate, and money supply. They oversee the commercial banking system in respective states and countries. They also serve as a last resort to various banks experiencing a financial crisis.

Credit Unions

A credit union is similar to a bank in terms of services – savings, loans and other transactions. However, it is a member-owned financial cooperative and is democratically controlled and operated by the members. They also provide credits at promising interest rates and other financial services to its members. As a not-for-profit organization, their services vary according to the size of the union and the financial capacity of the members.

Online Banks

From the word online, this bank operates on the internet which means they have no physical bank with a personal banker or teller. Online banks allow you to pay bills, transfer funds and apply for loans with very competitive interest rates. However, there are disadvantages as you may be prone to phishing and other internet frauds.

Mutual Banks

This type of bank is similar to a credit union as it is operated by its members. They also offer similar services with retail banks. On the other hand, profits after deductions are shared among the members which allow them to grow their capitals.

Savings and Loan Banks

These banks are less prevalent, however, they are still important. They are banks solely created for savings or for loan programs or both. Basically, their core system it to take the savings from its members and offer it as a loan to others.

If you want to save money, go to the nearest bank and become a member. Banks can offer you a wide variety of services.

7 Common Types of Loans You Can Avail

Do you want to buy a brand new car? Start your own business? Or do you want to transfer to a new home? Reaching all those dreams can be simple with the help of various loan programs. Check out these five common loans offered by banks or lending corporations.

Student Loans

Students loans are usually offered to college students to cover their cost of higher education. Families can apply to either federal student loans or private students loans. Federally funded loans come with lower interest rates and more borrower-friendly payment terms while private student loans come with a much higher interest rates and other requirements. Since 1980, the cost for higher education increases rapidly. Public universities jump to 344% increase while private has 241% increase.

Auto Loans

Auto Loans can help you afford your dream car. Most of the auto loans follow a system in which the bank will pay for your car and you will pay the bank. Car loans offered by banks can be simple interest loans or pre-computed loans. However, there are also auto loan programs offered by car dealerships, however, requires higher interest rates and not-so-friendly installment solutions. The average amount of loan finance in the year 2015 in the US was $28, 711 with average monthly payments of $485.

Mortgages

Mortgages are loans distributed by the bank to allow consumers to afford homes they can’t pay for upfront. This type of loan is among the loans with the lowest interest rates. A mortgage is tied to your home which means it can be foreclosed when you fail to pay. Mortgage loans are amortized so that the principal and interest payments are spread out over the loan period.

Personal Loans

Personal loans can be used for any personal needs. This makes them an attractive option for people with outstanding debts who want to reduce their interest rates by transferring balances. Personal loans can be used if you want to buy boats, renovate your rooms, pay your bills and other concerns. Most personal loans do not require collateral, so they rely on the integrity and the background of the loan applicant.

Loans for Veterans

The Department of Veteran Affairs provides lending programs for veterans and their families. This type of loan has lower interest rates than conventional loans. It also requires no down payment and allows for bad credit scores. Approximately, 21 million service members and veterans availed VA loans over the last seven decades.

Small Business Loans

To those entrepreneurs who want to start a small-scale business or expand their existing business, there is an available loan exclusive for them. The best source of this loan is the U.S. Small Business Administration which supports funds for this loan. It is important to help small businesses as they are essential to the national economy.

Payday Loans

Payday loans are short-term and carry a high-interest rate. Its targets are those who are employed and are receiving salaries. According to a study, 12 million Americans avail payday loans each year and spend about $7 billion on loan fees. That is why government discourages individuals to avail this kind of loan due to its high-interest rate.

Loans can be very helpful especially in emergency cases. But it is not recommendable to avail more than one type of loan, especially if you have existing balances and loans.

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A Basic Guide to Money Transmitter Licensing

Money transmission is a business engaging into transmitting and receiving money within the United States or to locations abroad by any and all means. A money transmitter must be licensed first before conducting those activities. Let us know more about money transmitters.

What is a money transmitter?

A money transmitter, also called as money remitters or money transfer services is one of the several disciplines within money service businesses or MSB which refers to the business that converts or wires money. Money transmitter basically transfers money or provides payment services. Under federal law, businesses are required to secure a license before running money transmitters.

What are the licensing requirements?

There are variations in the licensing requirements of starting a money transmitter business in every state. Thus, it is important that they are familiar with the requirements of the particular state they are eyeing to have the business. These are the common requirements for money transmitters:

  • license application (which may include tax identification number, social security number, certificate of good standing, statement of net worth and business address)
  • fees (license fee, application fee, renewal fee)
  • minimum net worth
  • background check
  • form of security
  • maintenance of permissible investments
  • registration to FinCEN (financial crimes enforcement network)
  • successful criminal background check
  • surety bond

What is a surety bond?

Most of the states require money transmitters to secure a surety bond before having their licensed approved. Surety bonds ensure that money transmitters adhere to the laws and standards of the industry. There are over 50, 000 types of surety bonds in U.S.A. alone. In the case of transmitter bonds, the principal is usually a company that sends money from one location to another through the U.S. Federal Reserve banking system or Fedwire.

How much does a transmitter bond cost?

The cost of a transmitter bond varies from the amount of coverage you need and the state where you are. Example, New Jersey requires $25,000, Illinois requires $100,000 and Connecticut requires $300,000 of minimum coverage. It can also be determined by current net worth, financial condition and percentage of money transmission sales, among others.

What problems do the industry face now?

As mentioned, one of the key requirements for money transmission is to secure a surety bond in a state. On top of that, the federal requirement states that one has also secure that the money transmitter is bonded to all other states where money transmission is performed. Example, if a money transmitter has a base location in California but conducts money transmitter business in 37 other states, the principal transmitter must be bonded in all other 37 states apart from California. Thus, licensing for money transmitter business can be very expensive.

Further, the MSB industry can also be affected greatly by modernization and emerging technology as it will create new classifications of the business. As a result, the MSB industry will adjust to its standards on a regular basis.

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