Category Archives: Finance
Matters concerning our finances will always be part of our lives as long as we live on this planet. One of the most significant decisions that we will ever make when it comes to our finances is choosing an institution to entrust our hard-earned money. Of course, banks will always be part of the conversation given the fact that such institutions have been existent since the 1400S or even earlier than that date.
However, credit unions had become the number one choice of many people because these institutions offer different benefits. Credit unions operate like a bank but doing business with such financial firms is more advantageous. Read on to find out the advantages of choosing credit unions over banks.
You will be surprised to find out that the money you saved in a bank did not grow any interest. If it did, it is unnoticeable. You sometimes contemplate on putting your money in a piggy bank instead since it does not grow any interest in the bank. Alternately, banks offer loans with high interest rates. Credit unions work the other way around. They offer low interest rates on loans while deposit accounts have high interest rates.
Clients First Policy
Right after opening an account with a credit union, you become a part owner of the institution. This is the reason why credit unions do whatever it takes to please their clients. Of course, owners must be treated well because of their value to the business. If you go to a bank, the employees will be too busy to attend to your needs. This is especially the case for clients with low deposits. However, credit unions strive to give the best services to their clients.
Applying for a loan in a bank is very challenging especially for those financially challenged individuals. For instance, one must have a certain amount of monthly deposits from his or her employer before being granted a loan. In fact, even opening a deposit account is an uphill task. Another benefit of opting for credit unions is that opening a deposit account with them is an effortless process. Moreover, applying for loans is easier compared to doing it in a bank. This is because the application process in credit unions is more client friendly.
Sometimes it can be very frustrating to have an account with a bank because you will be charged for everything that you do with your money. For instance, you need to pay for a fee if you take out your money from an ATM. The truth is that the fees being collection by banks give them a big profit. What is worst is that most of the banks charge unreasonable fees. Even the employees could not explain why they need to charge you with such fees. With credit unions, there will still be fees, but it is much lower. They do not charge you for ATM withdrawals too. Therefore, you will save a significant amount of money from avoiding hefty charges if you choose to do business with credit unions.
In summary, credit unions have a lot to offer to us. Therefore, you should start entrusting your finances to them. It is important to note though that opting for credit unions have its fair share of downsides too. However, you can avoid the disadvantages if you make an effort to find a worthy credit union institution. Hence, Make sure to do your homework before you decide which institution to do business with.
Financing a business is a challenging experience whether you are looking for start-up, expanding your business or capital to hold on when you are in tough times. You need to press on finding the best strategies to finance your business. You need to continue offering new products or services to the world and design a new future for your business.
There are many other more facets to address in business, and you need to find the possible appropriate ways to fund your business to facilitate its growth. Financing your business should be a solid factor in your business plan. The following are the possible ways you can use to finance your business.
Factoring is a financing method used by most companies; this might be due to poor credit or businesses that have to fill orders before they are paid. It involves selling the receivables of a company at a discount so that the company can get cash up-front.
This method is a very expensive approach to raising funds for a business. Factoring is majorly used when you work with commercial and governmental clients who have good credits. This method can improve cash flow when it is used correctly.
Saving can be the easiest way to finance your business especially when you are starting up. However, in the ideal world, you need to save money for a long time before you use it to finance your business.
This is the safest and most conservative way to start a company. However, you are only limited to the amount of money you can save. The problem with this method is when the business fails, you will probably face a big loss.
You can use credit cards to finance your business effectively and extend your cash flow. The credit cards will be used to pay your suppliers, and you will earn discounts and certain protections or rewards in return. However, when you use the credit cards, you will be directly tied to your credit score.
Your credit score will get worse if you fail to make your payments in good time. This method of funding a business should be used responsibly and make instant payments if possible so that you can improve your credit score.
Attract Angel Investors
You can finance your business by attracting the angel investors. These are potential investors or private groups of execution that invest in businesses; they usually make an equity purchase.
They can provide financial support and guidance on how to improve a business. Finding the angel investors is quite difficult because they are only interested in people with growth potentials and a viable business plan.
Friends and Family
Friends and family members can be the flexible and convenient way to finance your business. You can ask the members to make an equity investment to finance your company only if you are careful.
However, it is not advisable to mix business with family because a failure of the business might ruin the relationship. Be sure to get an agreement in writing and a lawyer to draft the financing.