Savings

Best Finance Options For Your Business in 2020

There are a lot of factors that can determine what type of finance is best for your business. Things like the age of the company and the reason that cash is needed all come into play. When you are thinking of getting financing for your business, consider these points, and you will surely choose the right way to get the capital you need.

Debt Financing

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One of the most common ways to get financing for your business is to take out debt. Debt financing includes loans, credit cards, and even purchase order financing. Getting cash for your business through debt financing can be significant in any stage of business. If you are starting a new company entirely, you can take out a business loan to get lots of capital for your business. If you have been in business for several years, you can likely get approved for purchase order financing.

Cash Loans

Cash loans are a great way to finance your business. You can opt to take out cash loans in your name or under your business. If you have a newer company, this may be your best option, as you likely have established some credit history while your business is still young. Cash loans can be obtained in any amount and are easy to apply for. You can acquire these loans from your bank, a credit union, or a lender online through MoneyMeFinance. Check out all your options, apply, and then use the cash to help your business!

Equity Financing

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The first type of equity financing is to offer public stock in your business. Companies that can provide public stock are typically quite large and can reach investors and capital from all over the world. The company would have to become publically traded and cover all the rules and regulations that come as part of being a public company. However, you can gain the right amount of cash to help finance your business in doing this.

Private stock can also be offered as a way to gain capital. With an individual stock, a small amount of stock is issued to specific investors. The stock is not traded on a day to day basis, as with public stock; however, both public and private equity financing means that investors own a portion of the business. They will have voting rights and a say in how the company is run in exchange for their capital.

Angel investors are another form of equity financing that may work for your business. Angel investors are a group or individual who offers to give your business cash on their own terms. This is an excellent idea for new businesses that need money to help move forward and grow. Angel investors often have a personal connection or reason to give cash to a specific business.

Financial Partner

If you do not want to consider short term loans or stock options, you may want to finance your business through a financial partner. Look for a partner who has some experience in your business field or personal interest in you. This person can give you capital, or they may want a say in how the business operates. Be sure to set clear lines before you begin working together! You may even want to interview a few financial partners, getting referrals through your CPA or bank, to make sure you find a good match.

Savings

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One of the easiest ways to finance your business is to save cash, using your own money to make your dream of having a company come true. Of course, this is an ideal scenario as it is conservative, safe, and ensures that you are only dependent on yourself. It can take quite a while to save the money that you need and, depending on the type of business you are planning to open. It may be years before you are financially ready. However, some entrepreneurs will take money out of their homes (using a home equity line of credit) or their retirement funds to get access to cash faster. While saving money to open a business is great, keep in mind that taking equity out of your home can be a little riskier. Yes, the cash is technically yours, but you may stand to lose your home if the business fails.

Friends and Family

Many people looking to finance business may turn to family and friends for financial assistance. This can be a great option as many people will happily help someone they know pursue their dream. However, it would be best if you always looked to family and friends with caution. Keep in mind that sometimes money can complicate personal relationships. Be sure to clarify if the money your friends and family give you is a loan or if they are giving you the cash with no strings attached. It would help if you even went so far as putting the terms of the agreement in writing, so there is no confusion later on. If this is a financial option that you are comfortable with, definitely take advantage of the generosity of your family and friends to move your business plan forward!

Government Loans

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You may want to look into government-funded loans for specific groups of business owners. There are loans for small businesses, minority groups, and also loans designed to promote business in specific areas of commerce. You may qualify for one of these loans and be able to secure the cash you need for your business. While many government-sponsored loans will have lower interest rates, they sometimes have strict requirements. You may need to show purchase receipts, income statements through the course of the loan term. However, it can be worth the hassle to get the financial assistance that your business needs!

As you can see, there are many ways to finance your business. Which option you choose will depend on your financial situation, the business you are operating, and how much money you truly need. Consider all your options, and you will surely find the best way to finance your business!

5 Tips for Building a Personal Budget

Making a personal budget is one of the most important things a person can achieve in long-term financial health. Of course, there are as many different kinds of budgets as there are people, but only two or three general templates are in common use. It’s important to understand these generalized budgeting methods so that you can fine-tune one of them to meet your own particular needs. 

A detailed budget can help you save money regularly, get your spending under control, show you how you might be able to boost retirement funds and uncover opportunities for extra earnings. No one should be without a personal budget. If you don’t have one currently in use, here are the steps for creating one that will work for you.

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Use Nine or More Categories

A comprehensive budget should categorize items into at least nine categories: entertainment, debt, transportation, food, housing, clothing, savings, insurance and healthcare. Many financial planners use a “20-50-30” budget approach. Twenty percent of your income, under this plan, goes toward debt and savings items. Thirty percent goes toward discretionary items like restaurant meals and vacations. The rest, 50 percent, goes toward everything else. 

List Your Income Sources Carefully

Every good budget lists sources and uses of income. That process begins with a detailed examination of your methods for bringing money into the budget. In addition to a job that provides a regular stream of income and various benefits, many people earn royalties, stock dividends, or acquire cash by selling life insurance policies at less than maturity value. One source of reliable information about such settlements is at www.masonfinance.com. Among all the steps of budget-building, the most important one is your detailed list of all possible sources of income. 

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List Every Expense Accurately

The area where people often lose their way when making budgets is in the area of expenses. This is especially true with items that have to be estimated. Always try to use “worst case” estimates whenever possible. That way, if the actual expense ends up being less, you’ll have a bit more money to adjust other items with, or to put into savings. 

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Set Goals for Retirement and Savings

A budget should always include a long-term goal for savings or retirement accounts. If you’re able to put 20 percent of each month’s income into this category, your financial health will improve as time passes. If your income allows, it’s even better to aim for a higher percentage of savings or a higher overall amount to save each year. 

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Use a Spreadsheet to Track Everything

Especially during the first few months after making the budget, spend a few minutes each day looking at your spending, income and savings amounts. Track every dollar you spend for 90 days and you’ll end up having a solid grasp of where your money goes and whether there are any problem areas. If your income or expenses change significantly, or if you get a new job with a different pay and benefits structure, consider re-doing your budget. But in most cases, it’s best to stick with the first budget you created and just adapt it for any minor changes in your financial life.