Benefits Of Managing Financial Funds - Have A Glimpse!

Benefits Of Managing Financial Funds - Have A Glimpse!

Financial planning is the best thing to do in the current situation, when the world is facing inflation at the extreme rate. If you are not serious towards financial management, least chances are there to enjoy a secure and stable life. Balance is required to keep things flowing without any obstacles. Financial management is very necessary for your own benefit, if management is at personal level. Management of financial funds accounts for the benefit of a financial institution and investors. It is a big thing which you need to understand before you seek for its benefits. Financial funds management is the management of cash flow of any business firm dealing in financial services. This task is accomplished by the fund managers who look at various aspects of deposits and loan demand.

Scroll down to know more and get a detailed account of the benefits of managing financial funds.
A fund manager is highly responsible for managing risk and cost so as to increase the cash flow feasibility. Any financial institution maintains its name and fame in the market by offering considerable amount of credit to its clients. Fund manager try hard to ensure maximum liquidity of funds. There are various benefits of this management which is enjoyed by the investors and of course the financial institution.

• It benefits the newly formed firms to recognize the exact inflow and outflow of cash. This in turn helps in combating cash shortage.
• People are very fond of investing in financial assets and therefore, it is very essential for the firm to present a complete cash flow statement to the general public. Through management of financial funds, investors get an idea whether it is safe to tie-up with the company or not.
• Cash flow statement is presented to the people after analyzing all the aspects over a period of time.
• Investors can acquire these cash flow statements on monthly, weekly, quarterly and yearly basis.
• With the help of cash flow statement, financial institutions also get an idea whether it will be able to pay the instant expenses presented by its customers or not.
• For future commitments, these statements are highly advantageous.

Management of financial funds is nothing but an attempt to realize the current and future compatibilities in terms of expenses. As a financial firm, it is mandatory for the owner or any other employee to keep a track of all the inflows and outflows of cash. Any investor looks up to its company for acquiring instant cash in need. If the financial status of the institution is not up to the mark then, there are least chances of progress. So, in order to retain a good position in the market, it is obligatory for the firms to present cash flow statements frequently. The benefits of managing financial funds are described in the above section. Read them attentively to make out its prominence.

As final words, it's not easy for any financial firm to maintain plenty of cash in repository. Financial planning and management is required to keep the cash flowing in and out.

Your Financial Life for 2013

Your Financial Life for 2013

More of the same equals more of the same. You want a different financial life for 2013? Shake it up a bit.

Shake that booty. Stir the pot. Seriously, let's get this pahtay started right now, Pirate's Booty style. Check that. Gangnam style.

Different actions could yield different results... Think how much better you could feel if you actually had a financial plan for your life...

Here's my list of actions to shake ya booty for a different financial life:

1. Systems for saving. Yes automation, every month. Money going from your business account to your personal account automatically. More saving = more money potentially for your financial life down the road.

2. Your pricing in your business. When was the last time you raised prices? 1982? I had a Members Only jacket back then. Are you charging what you are really worth? What are your costs? Are you covering your costs? Are you even still reading this? Shake it up a bit and... shocker... raise your prices so they can cover your costs.

3. Getcha significant other involved in your personal finances and on the dance floor. The dance floor of money. Use a 3rd party professional like a coach, CPA, or financial planner to facilitate this.

4. Your biz - make your craft a work of art. Yep. Make your service or product even better. Invest back into your business and upgrade your client deliverable. Stir up your business financial life and pick a % that you will spend on this... a % of your expected business revenue for 2013.

5. Stop doing all the booty shaking yourself. You need more free time to live. Get a personal assistant - to do some booty shaking. Send them to the grocery store and the dry cleaners. That will give you more free time to think and strategize and stir the pot in your business. Or more time to just take a walk and decompress.

6. Create a 2013 vacation budget right now. Let's say you are going to take a big trip next December, and it will cost 6 gees. Expand your financial life and save $500 a month to fund this. Get psyched to travel and see the world. Today! Not in 20 years when you retire.

Think different. What would it mean to you if you did some of this stuff? It would be a different financial life and you could be on cloud nine, shakin' your booty.

Loan Originator Compensation January 2013

Loan Originator Compensation January 2013

The Consumer Financial Protection Bureau released its final rules regarding Loan Originator Compensation Requirements under the Truth in Lending Act (Regulation Z), on January 20, 2013. The final rule implements requirements and restrictions imposed by the Dodd-Frank Act concerning loan originator compensation; qualifications of, and registration or licensing of loan originators; compliance procedures for depository institutions; mandatory arbitration; and the financing of single-premium credit insurance. I am going to focus on how the new amendments will affect mortgage brokers and correspondent lenders.

There are only a few real changes, but you can tell our policy makers valued the input of our industry this time. The most dramatic change is the ability for mortgage brokers to do borrower paid loans AND be able to compensate their loan officers. The ban on dual compensation is still in effect for brokers, making them less competitive against their correspondent peers. It was an uninformed decision by our policy makers to let this happen to begin with, and they have corrected it. Only problem, it doesn't go into effect until January of 2013.

Clarification on retirement plans has been included. It was unclear whether the contribution to employee retirement plans was allowed or not. It is clear now. Yes, mortgage loan originators can now have a retirement program without the worry of violating federal law. Employers are now able to contribute to a designated tax-advantaged plan for their employees, as defined by the IRS.

Also included with a few stipulations, is a profit based non-deferred compensation allowance. It basically allows a bonus up to 10% of a loan officer's total compensation.

Here is a breakdown of all the changes:

Note: Originator is defined as a loan officer ( a person who takes applications and negotiates terms) and a mortgage broker ( an entity that does not fund loans from its own funds or warehouse line), not a depository bank employee or a correspondent lender.

Record Retention

Correspondent: Requires the retention of records regarding all compensation paid to your loan officers, the loan officer compensation agreements, for a period of three years from the date of the transaction.

Broker: Requires the retention of records regarding all compensation paid to your loan officers, the loan officer compensation agreements, compensation received from your Investors, your agreements with them, compensation received from a consumer or other person (borrower paid transactions), for a period of three years from the date of the transaction.

Payments based on terms of a transaction.(Broker/Correspondent)

You cannot compensate your loan officers based on any term (rate, profit, YSP, etc.) on a single transaction, multiple transactions, or a "pool" of transactions. You cannot pay them based on a "proxy" for a term either. A factor, although not an obvious loan term, is considered a "proxy" for a term of the transaction if the factor consistently varies with that term over a significant number of transactions, and the loan originator has the ability, directly or indirectly, to add, drop, or change the factor in originating the transaction. It is allowable to pay your loan officers a "fixed percentage of the loan amount", and if needed, setting a minimum and maximum commission amount.

You are allowed to make contributions to a "designated tax-advantaged plan" as compensation. A designated tax-advantaged plan means any plan that meets the requirements of Internal Revenue Code section 401(a), 26 U.S.C. 401(a); employee annuity plan described in Internal Revenue Code section 403(a), 26 U.S.C. 403(a); simple retirement account, as defined in Internal Revenue Code section 408(p), 26 U.S.C. 408(p); simplified employee pension described in Internal Revenue Code section 408(k), 26 U.S.C. 408(k); annuity contract described in Internal Revenue Code section 403(b), 26 U.S.C. 403(b); or eligible deferred compensation plan, as defined in Internal Revenue Code section 457(b), 26 U.S.C. 457(b). The contribution cannot be directly or indirectly based on the terms of that individual loan originator's transactions.

A bonus can be paid under a non-deferred profits-based compensation plan based on the profits earned by the loan officer if the non-deferred compensation is not based on a loan term or condition and at least one of the following conditions is satisfied:

The compensation paid to an individual loan originator does not, exceed 10 percent of the individual loan originator's total compensation corresponding to the time period for which the compensation under the non-deferred profits-based compensation plan is paid; or

The individual loan originator was a loan originator for ten or fewer transactions during the 12-month period preceding the date of the compensation determination.

Dual Compensation (Brokers)

Dual Compensation (receiving funds from the borrower and creditor) is still not allowed for mortgage brokers.Originators who are employed by a Mortgage Broker have been unable to receive compensation when the borrower paid origination fees and discount points (Borrower Paid). Beginning January 20th, 2014, a mortgage broker will be able to compensate their loan officers on these transactions, as long as the compensation is not based on terms or conditions of the loan.

Safe Harbor (Brokers)

When meeting the Safe Harbor requirement, some verbiage has changed as far as the options you must present to the customer:

The option that stated "The loan with the lowest total dollar amount for origination points or fees and discount points." Has been changed to:

"The loan with the lowest total dollar amount of discount points, origination points or origination fees (or, if two or more loans have the same total dollar amount of discount points, origination points or origination fees, the loan with the lowest interest rate that has the lowest total dollar amount of discount points, origination points or origination fees)."

Loan officer requirements and hiring standards.(Correspondent/Broker)

All of the new requirements are already covered by the SAFE Act and applied when a loan officer registers for NMLS and State licensing.

Name and NMLSR ID on loan documents.(Correspondent/Broker)

This requires the originators name and NMLS number on the credit application, the note or loan contract, and the security instrument.

Effective June 1, 2013

Mandatory Arbitration.(Broker/Correspondent)

Eliminates the use of mandatory arbitration clauses, waivers of Federal statutory causes of action, and waivers of consumer rights. Arbitration can be used, but not required in a contract.

Prohibition on financing single-premium credit insurance.(Broker/ Correspondent)

Credit insurance can be paid monthly, but cannot be financed as a "single premium".

Read the final rule here: http://www.consumerfinance.gov/regulations/loan-originator-compensation-requirements-under-the-truth-in-lending-act-regulation-z/

In my humble opinion, the amendments released on January 20, 2013 are well thought out and take a step forward this time in accomplishing regulation that will curtail the bad actors in our industry. Although, I think 99% of them left 4 years ago! Regulation can be costly and a burden, but it does go a long way in preventing the problems we have experienced in past years. I encourage everyone in our industry to be involved in the law making procedures through public comment, contact with The Consumer Financial Protection Bureau, and your local politicians. It does make a difference as these new regulations suggest.

A Profound Law Cloaked in a Cloak

A Profound Law Cloaked in a Cloak

Why is the banking system of the United States (and the whole world) on the verge of complete collapse? I heard one expert claim that it was a competency problem and if they diffused the centrality of banking away from New York City and spread it around the country and placed it into the hands of 'competent' people in all corners of the country, things would be better. Others claim it is a problem of corruption due to centralization and not competency that is the problem. Still others argue that it is an issue of intrinsic value and that we must return to a gold standard. While all of these explanations may play a role to varying degrees, none of them even come close to the core origin of the problem.

If we work our way backwards into the history of banking just in the United States, we can see where we once were on a gold standard in America and it served us somewhat well for about 100 years but eventually failed. If we go back further, we find that the nation once had a decentralized banking system where states often had their own banks and their own currencies and their own exchange rates for goods and services. This also was not functional. The problem goes back much further and is far more fundamental because it is rooted in ethics. Because economics is a human function, it cannot be conducted in a lawless vacuum but must be defined and regulated by the word of God. Economics and morality are inseparable and subject to the law of cause-and-effect when held up to the light of Truth.

Let us expose the core of the problem cloaked in a law in Exodus 22:26-27.

"If you ever take your neighbor's cloak as a pledge, you shall return it to him before the sun goes down. For that is his only covering, it is his cloak for his skin. What will he sleep in? And it will be that when he cries to Me, I will hear for I am gracious."

The protection for the poor in this law is obvious. It is not what I want to focus on. Instead, consider the fact that the poor man must put up his cloak as collateral. Why? The creditor surely doesn't need it and God doesn't allow the creditor to use it in the evening when it would be useful so it would seem it is useless to the lender. Or is it?

Actually, the cloak is a very valuable asset to the lender. Yes, it is one thing that the borrower must return every evening to get his cloak and then return it in the morning. This is a constant reminder and nuisance for the borrower and an incentive to pay the debt. But imagine this. What if the borrower were allowed to possess the collateral? And what if he then went around to twelve creditors, collecting twelve debts on one cloak? And suppose he took the money from twelve creditors and his cloak... and skipped town, never to be seen again. Or suppose he is captured after spending all the money. Which of the twelve creditors gets the cloak? Suppose they sell the cloak and each creditor gets 8.5% on his loan back. Is that fair?

The borrower committed fraud. Stealing, lying and coveting are all violations of God's Law. The purpose of collateral is to uphold the understood law that you cannot secure multiple loans with the same collateral. This is violating the law of unjust weights and measures (Leviticus 19: 35-36).

Believe it or not, this is a law that every bank in the world violates every day and has for a very long time. The banking system of this fallen world operates under what is called fractional reserve banking. This is how it works. A customer deposits $100 in the bank. The bank puts $10 of it in reserve (in the vault-in theory). The bank then loans out the other $90. Now in this small scale, one can plainly see that if the customer returns the next day and wants to withdraw his $100 (a run on the bank) the money is not there. The bank is essentially bankrupt and must close its doors. The customer has been robbed of his $100. The bank essentially did the very same thing that the borrower with the cloak did if the cloak was not taken as collateral. The bank secured multiple loans with the same collateral.

If this isn't bad enough, there is something far more insidious that occurs when this is done. Consider the fact that the $90 goes back out in loans and then returns as a deposit. $9 is put in reserve while $81 is put back into the money supply. Imagine this money goes back out three more times with 10% put in reserve each time. After just five transactions, the $100 has become $468.50 in deposits! It has become $368.50 in loans! Money has been created. Counterfeit money!

But you can't get something for nothing. A bogus increase in the money supply is called inflation. As people see their dollars becoming worth less and less, confidence is lost and fear increases. Suppose there is a run on this bank. Five people show up at the door with receipts for $468.50, not just $100. And guess how much is in reserve to pay off the customers... $41.00.

Now imagine this on a national scale. How many millions of transactions occur every day, counterfeiting more money on a multiplying scale? How many millions of bogus dollars are injected into the system every week?

Now imagine it on a global scale.

There have been brilliant economists who have warned against using fractional reserve banking for decades but they have been largely ignored. The moneychangers that run this world have essentially said, "liquidity should have no bearing on progress." This is what they believe... but I'm telling anyone with ears to hear, there are no free lunches.

Eric Daniel Brown

Credit Cards - 5 Tips To Keep Them Safe

Credit Cards - 5 Tips To Keep Them Safe

Credit cards are very useful things to have and they have done away with the need to carry around huge wads of cash. The average person has 2 or 3 cards in order to get a large amount of credit and also to benefit from the various facilities offered by each card. If you have a card as well then you should be aware that there is a possibility of you losing money on account of it. If a person gets hold of your card physically or even just its important information then he or she can rack up a lot of charges that you will be held responsible for. You therefore need to keep it absolutely safe whenever possible.

The following tips will enable you to ensure that your credit card is absolutely safe:

1. Try to keep your card within sight when it is being swiped for a charge. Make sure that the person swiping it uses an authentic looking machine.

2. Do not allow anyone to know your passwords and CVV number (this is the number printed at the back of the card)

3. Try to keep multiple cards with low credit limit on each. This will reduce your risk in case any one card does get misused.

4. Always use your cards at secure locations, both online and offline. If you are not discriminating in how you use your card then there is a chance that it can be used badly. Be extra careful when dealing with online vendors; only ones who have secure websites should be patronized.

5. Avoid using your card from cyber cafes where there is a possibility that your data will get stolen. Be aware that cyber criminals use these places to get data from a large number of credit card users.

6. Do not respond to phishing mails that ask for personal and financial data because they can help thieves rain your account.

The use of credit cards will save you a great deal of time and effort especially since you need them to access the internet. You can use them to buy products at any time of the day or night. You will have nothing to complain about as long as you use your cards in the correct manner. Further, be sure to make your payments in tine so that you do not end up spending a lot of money on fee and charges which are very high in the case of cards.

Small Business Accounting: Raising Funds and Getting Started

Small Business Accounting: Raising Funds and Getting Started

As we begin to pull out of the recession entrepreneurs are starting and expanding businesses at an accelerated pace. Unfortunately they are finding that traditional sources for raising capital are increasingly difficult to come by. Banks have tightened their lending policies. At the same time many seeking funds are suffering from poor credit ratings resulting from difficulties experienced during the recession. The convergence of these factors is a perfect storm that is creating opportunities for alternative lending and funding providers.

Crowdfunding poised to lead

The list of alternative methods for raising capital includes Crowdfunding, Peer to Peer Lending, Online Pawn shops, Micro-lending, Revenue Based Financing and more. While each of these can be a promising source of capital for small business owners, Crowdfunding seems to have generated the most buzz. A recent Google search on Crowdfunding turned up over 9 million results. Crowdfunding is not only generating some real buzz but also spurning a lot of questions and some confusion. Our goal here is to answer some of the key questions and help clear up confusion and misconceptions surrounding Crowdfunding.

How it works

The CROWDFUND Act allows companies to raise up to $1 million a year from individual investors. Investors and those seeking funding will be brought together by a middleman, either a broker or an Internet website. The brokers and websites will have to register with the SEC. It aims to protect investors by requiring brokers to register with the SEC and by limiting how much individuals can invest. For example, investors who have an annual income or net worth under $100,000 can invest no more than the greater of $2,000 or 5% of their annual income or net worth.

How it is different

Crowdfunding allows you to retain creative and operational control of your business while still raising significant equity capital. In contrast, traditional equity funding is severely tipped in the investors' favor, giving them the bargaining power in early stage ventures. This means they give you less money and take more of your company because you are the one in need, not them.

Another point of differentiation and side benefit of Crowdfunding is that it provides a new way to connect with fans and supporters like never before. This engagement leads to increased dialogue which in turn leads to better feedback, additional distribution channels and happier customers, making crowdfunding the gift that keeps on giving.

The two types of Crowdfunding

Probably the biggest area of confusion revolves around the type of funds being raised. Today crowdfunding for donations is legal and a growing means for funding projects, causes and charities. Post a creative project, favorite cause or charity and people make donations towards your endeavor. The key here is that donors don't receive any equity. As such it is not regulated by the SEC. There are a host of companies facilitating donation based crowdfunding including KickStarter (creative projects), CharityKick (fundraising based on social networking and a "Dare") and Razoo (fundraising platform for nonprofits).

In contrast, equity based Crowdfunding means each investor receives a piece of your business. This form of Crowdfunding is regulated by the SEC and will not be legal until the rules are put into place by the end of 2012. Expect a proliferation of companies coming online to help businesses manage the equity Crowdfunding process. Here are two sites to find more information: http://www.startupexemption.com or http://www.cfira.org

What is required

If you think equity based Crowdfunding, or any of the alternative methods for raising capital or debt financing is right for you, now is a great time to make sure your financial statements are in order. While the requirements will vary with the funding source and amount, small businesses seeking to raise money via Crowdfunding will be required to disclose certain legal and financial information. Disclosure requirements increase with the amount of capital raised starting with basic financial statements and tax returns and increasing to include audited financial statements.

What you can do now

You can't raise capital through Crowdfunding until the SEC puts into place the rules, regulations and restrictions that will govern the Act. These rules and regulations should be in place by early 2013. While the SEC is busy with their work, there are a number of actions you can take if you are thinking seriously about Crowdfunding for your business. Assemble your information package, build your potential investor list, develop your sales pitch and talk to your legal and accounting advisors.

Dave Heistein, founder of Profitwise Accounting says, "As a CPA specializing in the small business sector, I see some interesting opportunities in Crowdfunding for certain clients looking to raise capital. Like many things, the devil is in the detail and I would encourage anyone considering Crowdfunding to seek out expert advice and spend time making sure your financial statements are in good order."

Disclaim Your Spouse's IRA In Favor Of His Or Her Secondary Beneficiary

Disclaim Your Spouse's IRA In Favor Of His Or Her Secondary Beneficiary

If your husband has a large IRA and you're well off, consider disclaiming part or all of his IRA at his death. Doing so can leave more for your children. This is an estate tax avoidance strategy to be aware of.

All IRAs are subject to estate taxes when you die. That's because you can take money out of them and re-designate beneficiaries at anytime - i.e. you own and control them which puts them in you estate at your death. If you don't assign a beneficiary for your IRA (on the IRA form), your IRA will revert to your estate and will also be probated when you die to determine who gets it. So, be sure to assign a beneficiary so it won't need to be probated.

Often a couple is well-off and has a sizable about of money in the husband's IRA. Normally, he'd designate his wife as his IRA beneficiary. At his death, his wife has the option of becoming the owner of his IRA or, alternatively, keeping herself as the beneficiary of that IRA. Either way, she can use the IRA money for herself.

The value of his IRA would be in the husband's estate. But by using the unlimited marital deduction, all his IRA money would be excluded - as a deduction - from his estate tax.

That may be fine; but if she's pretty well set for money already, his IRA - and its continued growth - would wind up in her estate when she dies. That's when having a lot of money means paying a lot of estate taxes - and leaving that much less for the kids. Of course, all this depends upon just how much wealth you have and the current Estate Tax law thresholds or exemptions.

One option that husband and wife might consider is designating the wife as primary beneficiary and their children as a secondary beneficiary. With this beneficiary arrangement, the wife has the option of disclaiming some or all of the husband's IRA when he dies. She could do this if she feels that she won't need his IRA money and wants to pass it free of estate tax to their children.

Disclaiming any part of his IRA makes the children the primary beneficiaries and keeps the IRA in his estate, subject to estate tax at his death. But if his disclaimed IRA value - and any other property not transferred to his wife - is less than the estate tax exemption (for 2013, the first $5,250,000 per person or $10,500,000 per couple of your estate is exempt from federal estate tax. These amounts are annually indexed for inflation. Anything above that is taxed at a top estate tax rate of 40%), it'll pass estate-tax free to the children.

The children will inherit their father's IRA as beneficiaries. They'll name the account in 'the name of their father as deceased for the benefit of the children (named)'. Then they can spread their IRA distributions from this over the IRS life expectancy of the eldest child - and that can be many years.

Of course, they'll have to pay income tax on those distributions but the stretched distribution time should allow much more to be distributed due to the IRA's continued tax-deferred growth.

5 Things to Look Up Before Acquiring a Prepaid Card

5 Things to Look Up Before Acquiring a Prepaid Card

Credit cards have become an important part of our life. It has become a daily staple for whether to book flight, go for shopping, paying bills etc. Although it is not necessary to own a credit card, but still everyone needs one for convenience.

Most of the time people don't qualify for an ATM card or simply don't want, this is where prepaid cards become necessary. They usually do not carry a fees like credit cards. All prepaid services are not equal. There are various options of prepaid solutions which you can choose from. But before choosing one, look out these five important points.

Here are 5 things to look for before choosing a prepaid card

Monthly fees- There are various kind of prepaid services available. Most financial institutions have introduced zero monthly fees, but there are many who charge a monthly fee and or a low fee structure along with various benefits. Most organizations who do not charge a monthly fee usually charges other fees. You can choose from various options according to your needs and preferences.

Transaction fees- Often majority of these providers charge cardholders in terms of a nominal transaction fees. If you are not planning to use your card too often, then a nominal amount of transaction fees doesn't matter a lot, but if you will use your too often, then a card with a high transaction fee should not be your choice. There are many kinds of prepaid services, which do not charge any transaction fees. Thus you can choose from a variety of services available.

Deposit fees- There are many cards, which charge cardholders, when they make a deposit in the account. However there are many ATM prepaid card solutions provider that allow a minimum amount of free deposit, thus choosing these kind of card you can save the deposit fee by, deciding upon a budget for card funding. You can at least make one or two free deposits in the card.

Cash withdrawals- Every service providers do not allow to withdraw cash from the ATM using the prepaid card. If you are looking forward for cash withdrawal with your prepaid card, you need to look for services that would allow you to withdraw cash as well out of the ATM.

Money accessibility- When is fund is deposited some prepaid cards put a hold on the funds deposited for a time period, whereas, there are various solutions that allows to use the card directly once fund has been deposited into it. Thus look for solutions that allows direct use, once fund has been deposited into it.

Prepaid cards have become a popular alternative to make purchases, making payments or giving it as a gift. These services offer several benefits, but they too have conditions which you are required to know before acquiring one. Choosing the right kind of prepaid cards, involve careful selection of benefits the service provider are providing and checking with all the security factors.

Small Business Financing Options

Small Business Financing Options

4 types of viable small business financing

Many small businesses face the prospect of going under if they are not able to secure good financing. The need for quick cash injections to keep a small business running can continue even after the first few loans are acquired. However, with each loan taken it becomes increasingly difficult to get a new loan approved. Also, the number of banks and financial intuitions who are willing to lend money to small businesses are rapidly shrinking.

A regular small business loan from the bank

Before you go anywhere else the first place you should go to is your bank. Banks offer some of the best small business loans which can be used as startup capital or to further expand your business. However, your proposal needs to appeal to the bank in a way that helps them feel that giving you a loan is a worthwhile investment. If you're just starting out your business plan should go into detail about your business and your experience. This will help the bank understand your industry and how effective you can be. Banks will also require the following details from you:

• Cash flow projections which tells them how they will get paid back and when. These should be honest figures.
• Make sure to add personal financial statements.
• If possible add past business tax returns. This will show how exactly your business has been doing.
• You need to have good credit rating to be trusted. Even though this is a small business loan but you are getting the money. Make sure to add your credit report to the file you send as part of your loan request.

Try finding micro-loans

If you are not able to acquire a regular small business loan you may try to get a micro-loan. Micro-loans allow you to borrow up to $35,000 and they are easier to get. Micro-loans work great as small term capital and for equipment purchases. Because micro-loans may require collateral the best use for it is equipment purchases since then the equipment can be put up as collateral.

Short term supplier credit

This type of loan clearly does not work for every business. So, if you're not a retailer or a manufacturer then you'll have little use for it. You'll usually need to pay back this type of loan within 30 to 60 days. However, you should be aware of the fact that the interest rate on short term supplier credit is very high.

Instant small business loans

Also known as quick cash loans and quick cash advance loans these work great for businesses that are not able to find a loan anywhere else. It is also great for businesses that do not have the required assurances to secure a regular small business loan. These types of lenders will usually process your request within a few days and deposit the amount into your account. In most cases you can apply for the loan directly from the lender's website. However, because the lender is taking a higher risk of lending you money without due diligence the interest rate is slightly higher than what banks offer.

Sick Of Your Job? Start Making Money From Home!

Sick Of Your Job? Start Making Money From Home!

Unless you are already making a living from home - that is to say, unless you work for yourself, and set your own hours, and are able to wake up at whatever time you want, work at whatever time you want, and go out and enjoy life whenever you want - you probably find yourself feeling upset about your job from time to time; this is natural, of course, as the vast majority of people work more hours than they really want to work, at jobs that they do not particularly enjoy - but one thing you may not have realized, if this is a position that you have found yourself in, is that it is actually entirely possible for anyone to make money online from home, as long as they hook up with the right system!

Before you are able to begin making money online, it will be important for you to spend a little bit of time learning about some of the things that will help you in this area; for instance, it is often said that Web traffic is the "currency of the Internet," as you will not be able to make money unless people are coming to your site - and for this reason, learning how you can get traffic to your site will be a huge key to making money online.

Another thing that will be important for you to realize, however, is that there are different things that are going to work for different people - and something one person may be doing to bring traffic to their site may not work at all for you; start studying some different thoughts from different people, and figure out the approaches you feel will work best for you as you aim to build traffic online.

And of course, it will be important for you to understand that there are different systems out there for generating income online, and you need to pick a system you will feel comfortable with - one that you feel you will be able to truly take advantage of; for instance, if you have a Facebook account, you could consider a system such as Facebook Marketing Extreme, as this system puts the awesome power of Facebook at your fingertips!

There no reason whatsoever why you should be finding that you are having a hard time making great money online from home - and when it comes down to it, the only thing that will really be able to stand in your way is you; as long as you are taking the time to learn about some of the different systems for making money online, however, and are doing your best to learn about these systems and start taking advantage of them, you will soon discover that you are making great money online from home, and are enjoying freedom with your time and your finances you never dreamed possible before!

Causes for Filing PPI Claims

Causes for Filing PPI Claims

Originally, Payment Protection Insurance or PPI was designed to protect an individual from burning off his property and/or a good credit rating should he become ill or made unemployed through redundancy. In a matter of a couple of years however, many banks and other banking institutions saw sales of PPI guidelines as another approach to earn money.

There are 4 major causes why you may be able to record PPI claims. You weren't made aware you were purchasing PPI. Credit approval was PPI purchase dependent. You were not told you had purchase choices. You as a customer did not meet the criteria for a PPI policy.

Being unacquainted with purchasing a PPI policy was, unfortunately, common. Until recently, PPI was sold together with a regular package when buying devices, taking out mortgages or other loans and trying to get a credit card. The policy was buried within other parts of the acquisition agreement and not explained at all. Since many customers did not know it was there and couldn't easily detect it, they did not know to ask to have it removed.

Contingent PPI was lies used by lots of credit officers and sales people. Basically, consumers informed that they would be unable to purchase a car or a big kitchen appliance without PPI. This same tactic was implemented when someone tried to apply for a new credit card or a mortgage. If you were informed this, you may make PPI claims for such payments.

Several clients were not notified they had options when purchasing PPI; to add buying it later and to go to another financial institution to search for a good monthly rate. If they did ask about it, several clients were told that their insurance plan needed to be bought at the same location as their product or at the same time when applying for credit card. Banks particularly employed this misinformation to sell PPI at a higher compared to market rate.

Customers had to reach specific requirements to be qualified for PPI. If you're over 65 or under 18 at the time you purchased an insurance policy, you may file PPI claims for payments created. This is especially true if during the time of purchase you were retired, self-employed or unemployed. Pre-existing health conditions that restrict your ability to work are also disqualifiers for purchasing PPI. When you can affirm the seller had comprehension of your situation, you may file PPI claims.

If any of these scenarios occurred while acquiring PPI, therefore submitting a claim is your next phase. Now if you examine your purchase agreements, sales receipts or credit card applications and don't see Purchase Protection Insurance or PPI, look again. To disguise the transaction from customers, lending organizations and sales offices came up with numerous "aliases" for their product.

Premium Protection Insurance Loan Protection Insurance
Credit Care Credit Care Insurance
Income Protection Insurance Mortgage Protection Insurance
Accident Sickness and Redundancy (or Unemployment) Insurance

If you see these titles or any variance of them, then you may be able to file a claim. The process is not easy, so remember to talk to an attorney. A number of firms will not charge a fee if you don't win your PPI claims. Good luck.

The Dangers of Borrowing Money From Family Members

The Dangers of Borrowing Money From Family Members

Almost everyone at some point in his or her life has asked a parent for money. While this is mostly a harmless habit at a young age, the older you get, the more dangerous this becomes. Borrowing money from parents, or any family member, is a risky business that might cause family tension or lead you down a bad financial path. Before you borrow money from your parents, you should consider the other alternatives you have. You should also understand the process of how to borrow money in the real world.

When to Borrow from Your Parents

Borrowing money from your parents should generally be a last resort, and it should always be done responsibly with both parties understanding the ramifications. Before you borrow money from parents, consider if there are any other options. One of your first steps should be to view your credit scores so that you can see if a bank loan would be a better option. If you have poor credit and aren't likely to qualify for a loan, then you might consider turning to your parents for monetary help. However, you should still be sure that you are being a responsible adult.

If you do borrow money from your parents, make sure you only take an amount that you can afford to pay back. Suggest that they perform a credit score check of their own so that you can all sit down and discuss the importance of credit and repaying debt. If they have their own credit problems, then you shouldn't take a loan from them. After you have reviewed both of your financial situations, then you should decide if a loan from your parents is a good idea for everyone involved. Before borrowing money from your parents, make sure it is the best decision and that everyone understands the rules behind the agreement.

Set Clear Boundaries and Rules

Even though you are borrowing money from family, it's still essential to set up clear rules. This will give you a better understanding of how to borrow money in the future. You need to have clear guidelines regarding the repayment of the loan. Discuss exactly when and how you will make the payments. Determine if the payments will be monthly or if they will occur as you get the money.

It's best to treat a loan with your parents like a regular loan. Stick to the payment plan and view your credit score on a regular basis to make sure you aren't taking on too much debt. Don't ask for an extension on a payment unless you really need it. You should also consider establishing a formal agreement, like you would with any other loan. Have this written out so that both parties can sign it and look back on it as proof of the agreement. This might help prevent any future arguments regarding the payback procedures.

The Potential Downfalls of Borrowing from Parents

Borrowing money from your parents might cause some tension in your relationship, especially if you can't pay them back. They may even lose their trust in you. If you owe them money and they fall on hard times themselves, they may have to take legal action against you. Borrowing money from parents can also lead to tension or different expectations than before. Parents might use the loan against you in order to take more control over your life. A parent who has given a child a loan might think he or she can control their decisions and tell them where to live and what to do. If you have set up proper boundaries prior to the loan, this shouldn't happen. Unfortunately, money often causes people to do things they wouldn't otherwise do.

Another reason why borrowing money from your parents is not always a good idea is because it sometimes sets a bad example or teaches a child the wrong lesson about money and debt. Since it is in a parent's nature to be giving and to try to accommodate the needs of a child, these loans are often not expected to be repaid. If a child borrows money from parents and doesn't have to repay it, this can send the message that debt doesn't have to be repaid. This is dangerous territory and can lead to bad credit or inability to get a new loan in the future.

Borrowing money from family members, particularly parents, may seem like a great idea at first. It prevents you from going to the bank or maybe even from paying interest. However, it can be a costly affair that may lead to tension in a relationship. If you want to borrow money from parents, make sure it is your last resort and that you have a clear agreement regarding how and when you are going to repay the loan. Always be sure that you do pay back the loan as quickly as you can. This will help you avoid many of the pitfalls that borrowing from a family member can have.

EMS Billing Solutions to Increase Revenue and Reduce Patient Compliants

EMS Billing Solutions to Increase Revenue and Reduce Patient Compliants

Up-front collections are rarely done in any hospital environment. It is seen more at out patient facilities than hospital emergency rooms. That said there are ways around collecting medical payments without up-front collection means. Agencies are reducing administrative costs and achieving full compliance to optimize revenue with combine full service solutions. This applies to EMS billing, eMedicReports, consulting, fire service billing and claims management process.

Combined full service solution delivers efficiency and results by simply completing the required incident report with a web-based NEMSIS Gold Certified ePCR solution. The solutions result in improved patient care and full compliance with all regulatory entities. Typical stakeholders are:
• Patients
• Hospital or Health care professionals
• Medical control authorities
• Billing operations
• Agency level CQI/QA professionals
• State reporting repositories
• NEMSIS
• IT departments

An additional EMS or fire department billing solution involves working with a third party, such as Medical Claims Management ten-phase process. This solution optimizes revenue generation; ensuring dispatch activities are managed through final collection. Such activities include:
• Medic level incident report documentation training- how to develop a compliant and effective report
• Establishment or analysis of charge of strategies
• Development of ordinances, HIPPA policies, and collection policies
• Review of contractual agreements
• Establishment of electronic data exchanges
• Establishment of reporting preferences

Traditional billing does not work. Accounts receivables are in higher debt than ever before. Great lengths are taken to collect debts, but are just as easily given up on because collectors know that patient has no money to give. Utilizing a third party for bill collection purposes is sometimes that extra step needed to obtain lost money. In this economy, no business can risk losing money where it is due.

Try a demo version, if necessary. Reputable third parties offer demo versions before committing. A service worth having takes time to find and is worth testing the waters before diving right in. A good company is willing to allow a trial error of clients too; understanding that a client needs to trust them.

To blame fault in this business is hard to do and a waste of energy. Patients begin complaining about bills coming six months after the procedure; complaining that they don't have the money for the bill at the time. There are payment methods and solutions that need to be implemented right away in the industry. That would eliminate complaints from a patient's perspective and increase revenue from the business perspective.

Up-front collections are an aggressive approach, which is why many organizations do not go this route. However, no one wants to lose money. Work with a third party to the optimal revenue benefit.

Banks and Financial Institutions Embarking Towards More Predictability

Banks and Financial Institutions Embarking Towards More Predictability

The future of banking and financial services has become more unpredictable. This industry is facing high-profile challenges and difficulties due to increasing business and customer demands. Researchers and technology teams are doing their level best to divide more budgets to banking services and applications so that financial institutions can better serve the growing needs. Today, competition is intensifying to build firm trust and confidence among customers. In this sphere, banks need to think positively and need to develop solid strategies that can support banking operations as well as customers.

Worldwide banking and financial institutions are investing prudently in their channel networks. They are keenly investing in e-commerce, wealth management programs, mobile banking and new payment strategies. Moreover, they are continuously thinking in reducing risks, increasing customer satisfaction, addressing the advancement in financial market trends, exploring the ways to capitalizing on growth with effective payments strategies.

Most banks are also thinking forward to effectively harness the grand power of their existing customer and cross-channel information. This will simply enhance profit margins and help in taking better decisions. It also helps to meet the growing customers' expectations. Undeniably, banks are putting their customers at the center of all IT and business decisions. This will help them to bring more customer-centric products and regain trust.

Banks are also offering effective solutions that support evolving customer needs such as:

1. Catering secure and interactive technology

2. Revolutionizing the customer experience

3. Using the socially acceptable to definitely enable payments innovation

Through such efforts they want to bridge the gap between IT and business. It will tend to cut future risk, foster innovation, bring stability, regain confidence and meet banking compliance.

Furthermore, worldwide banking and finance industry is paying increasing attention to customer experience. They are measuring their services and business applications against expectations and level of delivery. They are busy in reducing complaint rates and are continuously pleasing their customers. They are keeping complete vividness and integrity in transactions and service delivery models. They are also modifying their service systems (insurance technology, banking technology) as per the changing regulatory compliances and management trends.

In essence, banks believe in mobile and social networks for better service delivery. This will help them to become fully operational, agile and technologically enhanced. This will help them in re-engaging their customers and meet their demands. Nevertheless, banks have successfully established call centers to support customers and improve their interaction. This will improve service quality, bring predictability and allow banks to seamlessly deliver financial products to the business community.

Financial Freedom Is Not A Myth

Financial Freedom Is Not A Myth

Financial Freedom

Saving For A Rainy Day

In an economy at present, many of us struggle with the ability to save for a rainy day, but I am here to tell you that it can be done! You may ask, but "how can you save for a rainy day in such tough times?" My answer to that question is this, have you ever thought about how much buying a cup of coffee 2 to 3 times per week can add up? A medium cup of coffee from one of the top leading brands can cost anywhere from $2 to $3 plus per cup.

Can you imagine if you were saving those $2 and $3 per cup of coffee, per week? That's $6 to $9 per week spent on coffee. Add all of those unnecessary spending up, and you're looking at $24 to $36 per month if you were spending at one of those top leading brands. Not to mention if you bought anything else. These cost adds up and could be applied to cover other important expenditures i.e. credit card debts, student loans, mortgages etc., which brings me to the next topic; Paying-off debts.

Paying-off Debts

Paying-off debts can seem as a never-ending cycle UNLESS, you start making more conscious decisions; starting out small, then working your way up to greater decisions. Making well informed decisions of not spending $24 to $36 per month on coffee, and applying those funds to your credit cards, student loans, or mortgage etc., will yield results of lowering the amount you pay in interest i.e. the higher the balance owed on a debt, that is attached to an interest rate, the higher amount you will pay in interest, and again, that's wasting money unnecessarily. These are some of the things that can affect how soon you reach financial freedom.

Financial Freedom

Financial freedom is not just being free of debt, but it is encompassed by the ability of releasing yourself of unnecessary stress related to your finances. Financial freedom is also about being able to live life and not just exist; being able to take that vacation you have always dreamed of, being able to spend more time with your friends, and family. The ability to expand on who you are as an individual i.e. it could mean having more time to volunteer at different organizations that support good causes, or being able to donate monetarily to those organizations. Moreover, having financial freedom can help to build your spirituality by allowing you to focus more on the important things in life; just being able to get out of bed, or to even open your eyes to see a new day, or the fact that you were granted another chance at accomplishing your goals.

Financial freedom is also about helping you to grow in your personal relationships. How many relationship or marriages fall apart due to financial stress or burdens? Many couples struggle with managing financial burdens in their relationships, and as a result, those burdens put a strain on the relationship which unfortunately often ends up in couples going their separate ways.

To wrap things up, as you can see, from the simple things such as buying a cup of coffee, contributes to your future and your success. Life becomes the decisions we make, big or small; the deposits we make into our lives today, will be the investments we reap in the future. ~ Author Mahogany Law

Landscape of the Last 20 Years' Infrastructural Financing in India

Landscape of the Last 20 Years' Infrastructural Financing in India

In this article following two major points are discussed to understand the whole scenario.

(1) Trend and Initiative of the Budgetary Support and Institutional Borrowings -

The system of managing and financing infrastructural facilities has been changing significantly since the mid-eighties. The Eighth Plan (1992-97) envisaged cost recovery to be built into the financing system. This has further been reinforced during the Ninth Plan period (1997-2002) with a substantial reduction in budgetary allocations for infrastructure development. A strong case has been made for making the public agencies accountable and financially viable. Most of the infrastructure projects are to be undertaken through institutional finance rather than budgetary support. The state level organisations responsible for providing infrastructural services, metropolitan and other urban development agencies are expected to make capital investments on their own, besides covering the operational costs for their infrastructural services. The costs of borrowing have gone up significantly for all these agencies over the years. This has come in their way of their taking up schemes that are socially desirable schemes but are financially less or non-remunerative. Projects for the provision of water, sewerage and sanitation facilities etc., which generally have a long gestation period and require a substantial component of subsidy, have, thus, received a low priority in this changed policy perspective.

Housing and Urban Development Corporation (HUDCO), set up in the sixties by the Government of India to support urban development schemes, had tried to give an impetus to infrastructural projects by opening a special window in the late eighties. Availability of loans from this window, generally at less than the market rate, was expected to make state and city level agencies, including the municipalities, borrow from Housing and Urban Development Corporation. This was more so for projects in cities and towns with less than a million populations since their capacity to draw upon internal resources was limited.

Housing and Urban Development Corporation finances even now up to 70 per cent of the costs in case of public utility projects and social infrastructure. For economic and commercial infrastructure, the share ranges from 50 per cent for the private agencies to 80 per cent for public agencies. The loan is to be repaid in quarterly installments within a period of 10 to 15 years, except for the private agencies for whom the repayment period is shorter. The interest rates for the borrowings from Housing and Urban Development Corporation vary from 15 per cent for utility infrastructure of the public agencies to 19.5 per cent for commercial infrastructure of the private sector. The range is much less than what used to be at the time of opening the infrastructure window by Housing and Urban Development Corporation. This increase in the average rate of interest and reduction in the range is because its average cost of borrowing has gone up from about 7 per cent to 14 per cent during the last two and a half decade.

Importantly, Housing and Urban Development Corporation loans were available for upgrading and improving the basic services in slums at a rate lower than the normal schemes in the early nineties. These were much cheaper than under similar schemes of the World Bank. However, such loans are no longer available. Also, earlier the Corporation was charging differential interest rates from local bodies in towns and cities depending upon their population size. For urban centres with less than half a million population, the rate was 14.5 per cent; for cities with population between half to one million, it was 17 per cent; and a huge number of cities, it was 18 per cent. No special concessional rate was, however, charged for the towns with less than a hundred or fifty thousand population that are in dire need of infrastructural improvement, as discussed above.

It is unfortunate, however, that even this small bias in favour of smaller cities has now been given up. Further, Housing and Urban Development Corporation was financing up to 90 per cent of the project cost in case of infrastructural schemes for 'economically weaker sections' which, too, has been discontinued in recent years.

Housing and Urban Development Corporation was and continues to be the premier financial institution for disbursing loans under the Integrated Low Cost Sanitation Scheme of the government. The loans as well as the subsidy components for different beneficiary categories under the scheme are released through the Corporation. The amount of funds available through this channel has gone down drastically in the nineties.

Given the stoppage of equity support from the government, increased cost of resource mobilisation, and pressure from international agencies to make infrastructural financing commercially viable, Housing and Urban Development Corporation has responded by increasing the average rate of interest and bringing down the amounts advanced to the social sectors. Most significantly, there has been a reduction in the interest rate differentiation, designed for achieving social equity.

An analysis of infrastructural finances disbursed through Housing and Urban Development Corporation shows that the development authorities and municipal corporations that exist only in larger urban centres operate have received more than half of the total amount. The agencies like Water Supply and Sewerage Boards and Housing Boards, that have the entire state within their jurisdiction, on the other hand, have received altogether less than one third of the total loans. Municipalities with less than a hundred thousand population or local agencies with weak economic base often find it difficult to approach Housing and Urban Development Corporation for loans. This is so even under the central government schemes like the Integrated Development of Small and Medium Towns, routed through Housing and Urban Development Corporation, that carry a subsidy component. These towns are generally not in a position to obtain state government's guarantee due to their uncertain financial position. The central government and the Reserve Bank of India have proposed restrictions on many of the states for giving guarantees to local bodies and para-statal agencies, in an attempt to ensure fiscal discipline.

Also, the states are being persuaded to register a fixed percentage of the amount guaranteed by them as a liability in their accounting system. More importantly, in most of the states, only the para-statal agencies and municipal corporations have been given state guarantee with the total exclusion of smaller municipal bodies. Understandably, getting bank guarantee is even more difficult, specially, for the urban centres in less developed states and all small and medium towns.

The Infrastructure Leasing and Financial Services (ILFS), established in 1989, are coming up as an important financial institution in recent years. It is a private sector financial intermediary wherein the Government of India owns a small equity share. Its activities have more or less remained confined to development of industrial-townships, roads and highways where risks are comparatively less. It basically undertakes project feasibility studies and provides a variety of financial as well as engineering services. Its role, therefore, is that of a merchant banker rather than of a mere loan provider so far as infrastructure financing is considered and its share in the total infrastructural finance in the country remains limited.

Infrastructure Leasing and Financial Services has helped local bodies, para-statal agencies and private organisations in preparing feasibility reports of commercially viable projects, detailing out the pricing and cost recovery mechanisms and establishing joint venture companies called Special Purpose Vehicles (SPV).

Further, it has become equity holders in these companies along with other public and private agencies, including the operator of the BOT project. The role of Infrastructure Leasing and Financial Services may, thus, be seen as a promoter of a new perspective of development and a participatory arrangement for project financing. It is trying to acquire the dominant position for the purpose of influencing the composition of infrastructural projects and the system of their financing in the country.

Mention must be made here of the Financial Institutions Reform and Expansion (FIRE) Programme, launched under the auspices of the USAID. Its basic objective is to enhance resource availability for commercially viable infrastructure projects through the development of domestic debt market. Fifty per cent of the project cost is financed from the funds raised in US capital market under Housing Guaranty fund. This has been made available for a long period of thirty years at an interest rate of 6 percent, thanks to the guarantee from the US-Congress.

The risk involved in the exchange rate fluctuation due to the long period of capital borrowing is being mitigated by a swapping arrangement through the Grigsby Bradford and Company and Government Finance Officers' Association for which they would charge an interest rate of 6 to 7 percent. The interest rate for the funds from US market, thus, does not work out as much cheaper than that raised internally.

The funds under the programme are being channelled through Infrastructure Leasing and Financial Services and Housing and Urban Development Corporation who are expected to raise a matching contribution for the project from the domestic debt market. A long list of agenda for policy reform pertaining to urban governance, land management, pricing of services etc. have been proposed for the two participating institutions. For providing loans under the programme, the two agencies are supposed to examine the financial viability or bankability of the projects. This, it is hoped, would ensure financial discipline on the part of the borrowing agencies like private and public companies, municipal bodies, para-statal agencies etc. as also the state governments that have to stand guarantee to the projects. The major question, here, however is whether funds from these agencies would be available for social sectors schemes that have a long gestation period and low commercial viability.

Institutional funds are available also under Employees State Insurance Scheme and Employer's Provident Fund. These have a longer maturity period and are, thus, more suited for infrastructure financing. There are, however, regulations requiring the investment to be channeled in government securities and other debt instruments in a 'socially desirable' manner. Government, however, is seriously considering proposals to relax these stipulations so that the funds can be made available for earning higher returns, as per the principle of commercial profitability.

There are several international actors that are active in the infrastructure sector like the Governments of United Kingdom (through Department for International Development), Australia and Netherlands. These have taken up projects pertaining to provision of infrastructure and basic amenities under their bilateral co-operation programmes. Their financial support, although very small in comparison with that coming from other agencies discussed below, has generally gone into projects that are unlikely to be picked up by private sector and may have problems of cost recovery. World Bank, Asian Development Bank, OECF (Japan), on the other hand, are the agencies that have financed infrastructure projects that are commercially viable and have the potential of being replicated on a large scale. The share of these agencies in the total funds into infrastructure sector is substantial. The problem, here, however, is that the funds have generally been made available when the borrowing agencies are able to involve private entrepreneurs in the project or mobilise certain stipulated amount from the capital market. This has proved to be a major bottleneck in the launching of a large number of projects. Several social sector projects have failed at different stages of formulation or implementation due to their long payback period and uncertain profit potential. These projects also face serious difficulties in meeting the conditions laid down by the international agencies.

(2) Trend and Initiative of the Borrowings by Government and Public Undertakings from Capital Market -

A strong plea has been made for mobilising resources from the capital market for infrastructural investment. Unfortunately, there are not many projects in the country that have been perceived as commercially viable, for which funds can easily be lifted from the market.

The weak financial position and revenue sources of the state undertakings in this sector make this even more difficult. As a consequence, innovative credit instruments have been designed to enable the local bodies tap the capital market.

Bonds, for example, are being issued through institutional arrangements in such a manner that the borrowing agency is required to pledge or escrow certain buoyant sources of revenue for debt servicing. This is a mechanism by which the debt repayment obligations are given utmost priority and kept independent of the overall financial position of the borrowing agency. It ensures that a trustee would monitor the debt servicing and that the borrowing agency would not have access to the pledged resources until the loan is repaid.

The most important development in the context of investment in infrastructure and amenities is the emergence of credit rating institutions in the country. With the financial markets becoming global and competitive and the borrowers' base increasingly diversified, investors and regulators prefer to rely on the opinion of these institutions for their decisions. The rating of the debt instruments of the corporate bodies, financial agencies and banks are currently being done by the institutions like Information and Credit Rating Agency of India (ICRA), Credit Analysis and Research (CARE) and Credit Rating Information Services of India Limited (CRISIL) etc. The rating of the urban local bodies has, however, been done so far by only Information and Credit Rating Agency of India, that too only since 1995-96.

Given the controls of the state government on the borrowing agencies, it is not easy for any institution to assess the 'unctioning and managerial capabilities' of these agencies in any meaningful manner so as to give a precise rating. Furthermore, the 'present financial position' of an agency in no way reflects its strength or managerial efficiency. There could be several reasons for the revenue income, expenditure and budgetary surplus to be high other than its administrative efficiency. Large sums being received as grants or as remuneration for providing certain services could explain that. The surplus in the current or capital account cannot be a basis for cross-sectional or temporal comparison since the user charges permitted by the state governments may vary.

More important than obtaining the relevant information, there is the problem of choosing a development perspective. The rating institutions would have difficulties in deciding whether to go by measures of financial performance like total revenue including grants or build appropriate indicators to reflect managerial efficiency. One can possibly justify the former on the ground that for debt servicing, what one needs is high income, irrespective of its source or managerial efficiency. This would, however, imply taking a very short-term view of the situation. Instead, if the rating agency considers level of managerial efficiency, structure of governance or economic strength in long-term context, it would be able to support the projects that may have debt repayment problems in the short run but would succeed in the long run.

The indicators that it may then consider would pertain to the provisions in state legislation regarding decentralisation, stability of the government in the city and the state, per capita income of the population, level of industrial and commercial activity etc. All these have a direct bearing on the prospect of increasing user charges in the long run. The body, for example, would be able to generate higher revenues through periodic revision of user-charges, if per capita income levels of its residents are high.

The rating agencies have, indeed, taken a medium or long-term view, as may be noted from the Rating Reports of various public undertakings in the recent past. These have generally based their rating on a host of quantitative and qualitative factors, including those pertaining to the policy perspective at the state or local level and not simply a few measurable indicators.

The only problem is that it has neither detailed out all these factors nor specified the procedures by which the qualitative dimensions have been brought within the credit rating framework, without much ambiguity.

In recent time India has made significant progress in mobilizing private investment for infrastructure. Infrastructure finance nearly doubled in the last decade and is expected to grow further under the government's 12th Plan (2012-17), which calls for investments in the sector of about US$ 1 trillion, with a contribution from the private sector of at least half.

Still, it is not enough to draw final conclusion due to following reasons:

(1) Meeting the ambitious targets fully, will be challenging in long run,
(2) Major changes are needed in the way banks appraise and finance projects,
(3) The government has taken a number of recent initiatives to expand private investment in infrastructure, but their impact has not yet been felt.

But to consider last 20 years, the progress is steady and satisfactory enough.

Comparison Shopping Electricity Providers

Comparison Shopping Electricity Providers

Once a year, I used to quickly compare rates for competing electricity providers in my area when our contract comes up for renewal.

Not really doing the math, I did not realize how much I could have saved by effectively analyzing the different plans.

It wasn't until I took the time to learn about the "Electricity Facts Label," that I began saving quite a bit during the hot summer months here in the south.

When comparing service providers, the three most important factors on this label are: the "Energy Charge," "Base Charge/Service Fee," and "Average Price per kWh."

However, there are many other factors to consider, as well.

Here's a step-by-step guide on how to analyze the options and make an informed choice about your electric provider in the deregulated areas of Texas.

Check with your state's public utility commission to determine if you are one of the 24 deregulated states, and if so, what similar assistance is available to you.

1. Go to PowerToChoose.org and click on "Compare Offers."

This is Texas' Public Utility Commission's official Electric Choice Website that lets visitors compare retail offers.

2. Enter your zip code and "Submit."

3. On the Available Offers page, if your zip code has multiple TDUs (which this page will tell you, if there are), then chose your "TDU Service Area" in the left sidebar, titled, "Search Criteria" and then hit "Submit."

If you are not sure which TDU you are, look at your latest electric bill and find where it addresses "Delivery Charges."

Note: If you are interested in the "Renewable Content," which is the percentage of renewable energy the provider offers, change the selection in the drop down menu to your desired choice.

4. Click the "All" tab at the top, which resets the current offers.

5. Click the column title, "Avg. Price/kWh (1,000 kWh)," until you see the little arrow pointing up to show that the column is sorted in ascending order, with the least expensive plans listed first.

6. Scroll through the first several offers, reading their "Electricity Facts Label," "Terms of Service," and "Special Terms," making notes as you go, regarding:

Price per kilowatt hour (kWh) based on 1,000 kWh of monthly usage (in cents) -

Be careful! One company that I came across raised the rates at 2,000 kWh. Not sure about this, but I avoided it.

Base charge/ Service fee -

Some companies will only charge a base charge or service fee if you drop below 1,000 kWh for the month, others charge one regardless. Since we use gas to heat our home, I reviewed my electric bills from previous winter months and determined that we had not dropped below 1,000 kWh of usage ever.

TDSP Pass-Through Delivery Charges (both the base charge and the per kWh charge) -

Confirm that these charges are passed through without mark-up. If a company states that they have not been marked-up, then this number will not differ from a competitor that states the same.

Any other charges or recurring fees -

These might include a Service Processing Fee, Returned Payment Charge, Disconnect or Reconnect Charges or a Late Payment Penalty.

Type of contract (fixed, variable or indexed) -

I always prefer a fixed rate offer, especially since the lowest offers frequently include fixed rate options. There are too many variables that can make a rate fluctuate.

Contract term -

This is important to know since once the contract expires, the plan generally moves to a month-to-month, variable product with much higher rates. Finding a contract can take a matter of a few short minutes, so choosing a short-term contract should not be a deterrent. In fact, these contracts usually offer significantly lower rates.

Termination fee -

This is important for people who are planning on moving or discontinuing service for another reason.

Deposit amount required -

If required, a deposit can be quite hefty, but is generally refundable. Be careful, as the deposit is not mentioned on the Energy Facts Label. Instead, it is detailed in their terms of service.

Application Fee and/or Credit Application Review Fee required -

These can also be high, but unlike a deposit, are not usually refundable. They are also part of the terms of service.

Payment options -

These might be noted in the special terms section, since lower rates sometimes require "Electronic Billing" and "Auto Payment" with a credit card or debit card.

Smart Meter or other equipment required -

Lower rates might also stipulate that newer technology be in use at your residence. Call your current service company to find out if you already have a Smart Meter installed and if not, how to go about getting one.

Generating excess renewable energy -

This is not always an option, however, some areas have buy-back plans available for people that generate excess energy.

7. After making notes for each of these competitors, you should be able to quickly determine the best option.

For example, I found a:

3 month fixed-rate contract

Energy charge: $.0247/kWh

Average Price per kWh: $.067 @ 1,000 kWh and $.063 at 2,000 kWh

Service fee: $9.95, which is automatically waived when I use more than 1,000 kWh of electricity in a month (which I always have)

TDSP Pass-Through Delivery Charges are passed through without mark-up

No deposit or application fee

No special payment requirements (electronic billing or automatic payment)

8. Then, search online for a promo code that can be used in conjunction with this plan. There is a good chance you will not find one, but it's worth looking for.

9. Sign up with the company, by providing your:

  • Residential address
  • ESI ID number, which is on your bill
  • Social Security number or Driver's License number (for a credit check, this is how the deposit can potentially be waived)
  • Start date for service
  • Credit card number and billing address, if they require automatic payment

10. For your records, print out the:

  • Offer that you signed up for
  • Residential terms of service
  • Confirmation email

Note: If you keep your comparison shopping notes, then when it comes time to shop prices again, you will know exactly what you are looking for.

Note 2: Put your contract expiration date in your calendar to let you know 2 to 3 days before, so that you can start pricing competitors.

Gimmicks:

Some electric companies offer gimmicks such as prepaid cards or points.

I did the math for one in particular... a 2 year fixed rate contract that offer a $350 prepaid card.

When I read the fine print I discovered that their energy rate is so high that the prepaid card does not remotely match the savings that I will receive by comparison shopping rates a couple of times a year.

I saved well over $1,200 last year alone by shopping electric rates and contracts.

I hope this step-by-step guide helps save you a little aggravation and a lot of money when finding your electric provider.

Here's to another Inspired Minute!

Take The Temperature Of Your Company's Financial Health

Take The Temperature Of Your Company's Financial Health

In any business, a clear understanding of the company's real financial performance is critical to success. Measurement strategies and tools should be implemented to track and interpret the numbers generated by a business. An effective accounting and financial management system can offer this type of information to business owners, and the system's data can be manipulated and analyzed to give key insights into the financial health of your company. A versatile accounting and financial management system can also enable you to interpret the status of your business to third parties, like banks and the government. The other advantages that accounting and financial management systems offer include:

Avoiding Assumptions on Financial Health: By maintaining an accounting system, you can make informed decisions about your business. Although there are multiple factors to consider, financial health should be a critical element in your decision-making process for moving your business forward. Detailed accounting records and a proper financial management system show where the business stands financially. You won't ever need to guess about the financial position of your business.

Accuracy and Consistency in Information: Accounting plays a crucial role by offering you a means of communicating the financial aspect of a business to others. The most important function of any accounting system is to keep and present data so that managers and owners can analyze the decisions they have made. Financial status helps immensely in making profitable decisions for any business.

Aid in Analyzing Business Deficiencies: Professional and quality accounting systems generate reports that will enable you to assess the profitability and performance of your business. Accounting and financial management systems will not only allow you to make decisions, but they can also help you to find areas of your business that need improvement. Once the troubled areas are identified, you can work on those business functions to improve them.

Maintain Comprehensive Audit Trail: If your business requires loans, the lending firm will likely ask for financial reports and other relevant data so that they are able to estimate the net income and real worth of your business. They may also assess and evaluate your financial statements to watch your potential repayment of the loan. Availability of such information is almost impossible without any accounting and financial system in place that can provide financial statements.

Well maintained accounting records show where your business stands financially. Implement and keep your accounting and financial management system, and your business will find its way to success!

Gold Is A Very Valuable Precious Metal

Gold Is A Very Valuable Precious Metal

Every day, the price of gold is listed on the different stock exchanges, and the price of gold is going to determine a lot including what certain jewellery sellers will set their gold prices at for the day. If the price of gold goes up, then those jewellery sellers that have large amounts of gold are going to be holding onto a fortune. However, if the price of gold drops, then the jewellery shops people are going to end up losing a lot of money because their gold is not as valuable anymore. Gold comes from mines, and gold mine valuation is what people use to determine just how much gold that a mine can produce.

Gold Mines Hold A Lot of Value

Gold is used in many different things because of what it can do especially for technology. Even though gold is a precious metal, it is still a metal, and metal can conduct electricity. However, unlike other metals, gold is one of the best metal to conduct electricity, which is why it is the preferred choice for things like the motherboard inside of computers, and also the circuit boards of cellular phones. However, gold is not in endless supply, and gold mine valuation is going to determine just how much gold is in a particular mine.

Here is more information on what determines how much money a gold mine is worth:

A scanning of the mine: The first step in gold mine valuation is determining just how much gold is actually in the mine. There is plenty of scientific equipment out there that can do a scanning survey of the mine to see exactly how deep it is and how much gold is in it. People need to remember that once a gold mine is empty of mine, then the value of that mine is reduced to absolutely nothing.

The life expectancy of the mine: Once the depth of the mine is established, it is important to figure out just how much gold a mine is going to produce. Typically, the best way for the amount of gold to be figured out is using mathematical calculations, and once the math is done, then the number of years that the mine is going to produce gold can be figured out.

The determination of whether a mine is a good investment: When a new gold mine is found, the first thing companies are going to want to know is whether or not they should invest their money in the mine. Some mines may seem like they are non-stop gold producers, but without the proper tests, it is impossible to determine that. Once all the testing has been done, then the company executives can look over the report and determine whether or not a particular mine is worth the time and effort to invest in.

Gold is worth a lot of money, and it is one metal that is never going to stop being valuable. Once a mine loses its gold it is worthless, and a company needs to know if a mine is going to produce enough gold to justify the cost to purchase it.

Protect Your Upcoming Business With These Insurances

Protect Your Upcoming Business With These Insurances

If there's one thing all business owners share in common it's a fear of having their carefully laid plans go to waste. For an upcoming business where things aren't completely certain, this fear is even more palpable.

Business insurance can protect companies against risks caused by any number of reasons. These risks include property damage and legal liability along with employee-related risks. There's no one type of insurance that covers all aspects so it's necessary to purchase several. Let's look at what they are.

Assets insurance

Also called business property insurance in other countries, assets insurance takes into account buildings and their content, company vehicles, breakdown of machinery and damage to computer systems. Under these, there are several areas which are covered including property damage due to natural calamities, theft and malicious damage, damage to company vehicles owing to accidents, vandalism and car theft, and machinery breakdown due to electrical outage, vandalism, natural calamities and the loss and cost of data recovery.

Assets insurance policies will naturally have different premiums with the cost dependent on the level of risk.

Liability insurance

This is a given but we're mentioning it to drive home its importance. Liability insurance protects a business, its employees and its products and services in the event of a lawsuit alleging that a third party was inflicted with bodily harm or had property damaged (in essence, negligence). It's a very real occurrence and disgruntled people have been known to file lawsuits with no basis in truth. Even if a company adheres to very strict policies of quality and ethics it can be accused of negligence by someone with bad intentions so it's wise to have protection.

Liability insurance spans a couple of subtypes, workers' compensation and public liability. The first covers employees against accidents and illness while the second extends to errors and damages to the public and public property arising out of the usage of the company's products. It also consists of professional indemnity where employees and the business are protected against legal action arising out of professional negligence.

Income protection insurance

Under income protection insurance, the policyholder can recover income lost due to being incapacitated either because of injury or illness. The benefits are paid regularly and are tax-free.

Income insurance must cover several areas, not just the policyholder and the business. Let's say that a fire has occurred and the office must remain shut for a time. Employees must still receive wages, records and databases must be protected and any debts, loan repayments etc., must continue to be paid.

Life insurance policies too must be purchased to cover key employees and business partners in case they pass away. This ensures the business continues to run without the valuable services of the deceased.

Because of the number of business insurance types that exist, it's not a breeze finding out whether a company needs additional protection. The best way to find out is to speak with the authorities of an insurance company or with a lawyer well-versed in insurance law.

No matter how small a business is, getting insurance coverage at least for certain areas is necessary not only for the business but for the policymakers as well. So if you've recently set up a business and it looks to be taking off, start considering purchasing insurance to protect your investment.

Financial Cliff, or Lemming Leap?

Financial Cliff, or Lemming Leap?

We keep hearing that the US economy is heading for a 'financial cliff; the confluence of a congressional mandate to cut spending and raise taxes. This 'cliff' was created... or at least promoted from financial 'hurdle' to financial 'cliff'... by the last, desperate attempt of the US Congress to 'kick the can' of fiscal responsibility down the road one more time. In other words, this is strictly a man-made 'cliff'; and 'going over' the cliff is simply a euphemism for going 'cold turkey' on deficit spending.

Of course, the very same Congress can now annul these 'laws', pass new ones, and attempt to 'kick the can' just one more time. Can the 'can' withstand another 'kick'... or is this when the can... that is, the real US economy, shatters? Time will tell, but clearly what cannot continue will not. Von Mises called this situation the 'crack up boom'... the boom will come to an end, sooner or later, voluntarily or not. What cannot continue will not continue.

The question to be answered is whether to 'go over' the cliff, that is face financial responsibility now, or avoid responsibility and grow the cliff ever higher by continuing the 'borrow and spend' madness. The subject of madness brings us to lemmings... do lemmings actually go mad, and hurl themselves over cliffs in a suicidal frenzy, or is this just anthropomorphism?

Another, more materialistic take on lemmings is the recognition that lemmings are simple creatures, with a low eye level, and as they run in packs they do not, cannot see very far ahead. Indeed, those back in the pack see only lemmings directly in front of them; and if the pack leaders inadvertently run over the edge of the cliff, the rest of the pack simply follows them over, unawares, to their collective doom.

Do we as humans go collectively mad, and hurl ourselves over the 'cliff' in a suicidal frenzy, or are we simply, blindly following our 'leaders' to our collective doom? Indeed, does the reason why we seem to go over the cliff actually matter? The answer in either case is the same; abandon collective madness, and retrieve sanity one by one, on an individual basis... look ahead, with wide open eyes, see the looming cliff... and step out of the mad, collective rush to destruction.

The salvation of humanity resides in individual decisions, made in a rational, thoughtful manner... not in a collective, emotional frenzy. As more people get conscious and individually take measures avoid the cliff, fewer will remain to collectively barrel over the edge. Indeed, if somehow we could all wake up and see what's coming and all take action to avoid destruction, there would be no one left to actually take the plunge!

The action each individual must take to avoid the cliff will depend on the circumstances of that very individual, but the crux of the matter is the same; avoid dependence on the collective, as the collective is mad. The collective is rushing, seemingly unawares, ever faster, towards the cliff...

Specifically, each individual must take responsibility for themselves... by avoiding the Fiat world as much as possible. Instead of accumulating more debt in the form of Fiat paper... thereby growing the cliff taller... accumulate more real wealth; Gold and Silver easily come to mind, but so does a lot of other real stuff; barter goods, land, food supplies, fuel, clothing, etc. The kind of stuff any Boy Scout would understand to hold in preparation for a survival scenario.

Above all, avoid the collective madness of borrow and spend. Borrow and spend is the very process that built the cliff in the first place, and continues to build it ever higher and more lethal.

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