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Business Loans & Other Sources of Raising Capital
Capital is the most important resource of any business. After all, the very objective of carrying out a business is to make money. You need money at every point of time in a business. From purchasing raw materials and paying wages to purchasing land, building or machinery, you need money. You will need money to start a new business. Expansion, modernization and diversification of an established business also require money.
There are several sources of business finance. Internal sources of finance include savings, retained profit, working capital and sale of business assets. If you are planning to start a small business or already run a small business, you can use your savings to finance it. If you have retained some of the business profit instead of distributing it among partners or shareholders, then you can reinvest this amount in your business. Working capital is another source of capital. It is a short term source of capital and is used to run day to day business operations. You can raise a large amount of capital by selling a business asset which is lying useless.
External sources of finance include share capital, debentures and loans. Shares and debentures are used by large companies to raise capital. Business loans are the most common mode of raising capital. Business loans are obtained by sole proprietors, business partners and big companies. A business loan is a fixed amount of money that the lender gives to the borrower which must be repaid within a stipulated time period known as loan period. The borrower has to repay the loan amount along with an additional amount known as interest.
There are several modes of repayment of business loans. One of them is to pay a fixed amount of money every month comprising both principal as well as interest elements of the loan. In case of interest only loans, only interest is paid after regular intervals and the entire principal amount is repaid at the end of the loan period. In case of businesses having an incubation period, the borrower is not required to start repaying money in the first few years of the loan period. Loan repayment starts once the businesses start generating profit.
Lease, Hire Purchase or Car Loan - The Choice is Yours
There are so many things for which you need to spend a considerable amount of money. You need money to purchase a house. You need money to purchase household items such as consumer durables. Car is another item which requires a large expenditure. Your savings might not be enough to buy a car. In this case, you need to find other sources of finance. You can get a car on lease, hire purchase or loan.
Not all dealers offer cars on lease. You will have to search for car dealers who offer cars on lease. This is not the end of your search. After finding such dealers, you will have to choose a dealer who offers a car that you are looking for. You should not make a compromise on this issue. Once you get a car on lease, you will be having it for a considerable time. The benefit of a lease agreement is that you will not have to pay a big amount of money. All you need to do is to pay a small amount of lease rentals every month until a certain period. After the expiry of the tenure of the lease agreement, you will have to return the car to the dealer.
If you want to retain the car, you can go for hire purchase. Many dealers sell cars on hire purchase. Here also, you will pay monthly installments until you have paid the entire loan amount along with its interest. The amount of monthly installments in case of hire purchase is higher than the amount of lease rentals. Its advantage over a lease agreement is that you do not have to return the car.
Another mode of financing a car is to take out a car loan. Car loans can be obtained from banks, financial institutions and private lenders. It is not a difficult thing to borrow money to purchase a car. Lenders will readily offer you a car loan if you could show your income proof. Even if you are unable to show your income proof, you can get a car loan secured against your property. It is easier to obtain a secured car loan than an unsecured car loan. The rates of interest on car loans are lower than the interest rates on hire purchase.
Logbook Loans - Money Against Vehicle Logbook
Logbook in simple terms means a vehicle registration certificate issued by Driving and Vehicle Licensing Agency (DVLA) in the UK. I hope you are aware of the fact that registration document V5 popularly known as logbook has become invalid from July 2005 and is replaced by a new style vehicle registration certificate (V5C). A logbook is valid up to 5 years and contains entries regarding owner of the vehicle, registered keeper of logbook, chassis number, current registration mark, engine number, model and color of the car. You know various means of borrowing. But, do you know you can borrow a loan by using a logbook. Yes, it is true, now you can borrow a logbook loan.
A logbook loan is a kind of personal loan secured against a car. A UK resident who has a logbook registered in their name is eligible for logbook loans. Lenders in exchange keep the logbook of the borrowers with them against the loan. Borrowers can enjoy the complete freedom to drive their car without any restrictions from the lender.
Amount that a borrower can borrow with a logbook loan ranges from ?500 to ?50,000. The loan amount is determined on the basis of value of the car minus any outstanding payments due to be made on the car.
Following criteria are to be met to become eligible for a logbook loan:-
* To be eligible for a logbook loan, the logbook should be in the name of the borrower.
* The vehicle against which logbook loans are taken should be less than 8 years old.
*A borrower of the loan should be in full time employment. He or she should have some regular source of income; you have to give proof of your income.
* Vehicle should be clear of any finance. There should not be any due payments on the vehicle.
Vehicle should must be insured and taxed. Vehicle against which the loan is taken should be insured as the lender wants to be on the safer side.
Credit score is considered to be an important element by lenders in UK while lending money to the borrowers. The best thing about logbook loans is that it does not involve credit check. So, whatever may be your credit rating you need not worry, you are eligible for a logbook loan if you meet the above criteria. Problem cases such as people who have faced CCJs, bankruptcy can also apply for this loan.
Logbook loans can be borrowed from banks or financial institutions. But, if you are looking to get a fast and best logbook loan, you can apply for it from online lenders. Online loans offer the convenience of applying for the loan and saves time and money. A borrower can access infinite number of online lenders by using the internet from home or office.
The process of applying for an online loan is swift. Lending websites usually offer an online application form on their websites, which a borrower is required to fill. A borrower just needs to fill up this form with some personal details such as borrower?s name, loan amount required and many other details. These details help a lender to find the most appropriate loan for the borrowers.
When you will search for the logbook loans online, you will find a number of lenders who will be ready to offer you the loan. But, don?t get fascinated by the offers you get. Do a bit of search and you will definitely find a better option. Collect loan quotes from several lenders which are available free of cost or for nominal charges and compare them to find the best and cheap logbook loan.
It is amazing to find that besides enjoying a long drive in your car, you can also get a loan against your car. Thanks to logbook loans, now it has become pretty easier to turn your car into cash by keeping your car logbook as a security.
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