When you need quick cash, what could be more convenient than taking out a same-day payday loan that is deposited directly into your bank account? On your next payday – a week or two later – the loan is automatically repaid because the creditor has your bank information. Sure, there is a fee, but there’s no credit check, no collateral, and no lengthy application process like there is for a personal loan. You just walk into the payday loan office or go online, fill out a few forms proving that you have a steady job and a checking account, and you get up to $2,000 the same day.It sounds easy, but it may not be such a good deal. Payday loans are defined as short-term loans with an interest rate above 36%. That sounds like a high rate, doesn’t it? After all, you see new car loans advertised for zero percent, and home mortgages for 6%. Personal loans from banks are generally between 10% and 15%. Even credit card cash advances can be cheaper. A $300 cash advance on the average credit card, repaid in one month, would incur a finance charge of $13.99 at an APR of 57%.To make it sound less expensive, payday loan providers don’t advertise their annual percentage rate (APR) the same way credit card and personal loan providers do. They state the interest in terms of a fee per $100 loaned. Here’s a typical example.How the Fee Translates to APR You walk into the payday loan office or apply online. You need to borrow $500 until your next payday, which is in seven days. The fee for your loan is $15 per $100 borrowed. You think, “That’s not so bad, it’s 15%, isn’t it”? You agree to the loan terms and you give the lender a check in the amount of $575, dated in seven days.When your loan is due to be repaid in seven days the creditor will cash the check or debit your checking account. If you have $575 in your account, then you are finished and the transaction is completed.You will have paid $75 for your loan. That translates into an annual percentage rate (APR) of 780%. It’s very high, but that’s because calculating the APR is complex and involves not only the loan amount and the fee, but the period of the loan-how long until you pay it back.The big danger is that many customers can’t pay back the loan on time. Think about it – a customer who does not have $500 in his or her bank account this week is unlikely to have $575 in their account next week. Many customers “roll over” their loans. They cannot pay on the due date, so the creditor charges the $75 fee and agrees to collect on the next payday.Are You the Average Payday Loan Customer?According to the Consumer Federation of America, from a single lender each year the average payday loan customer takes eight to thirteen payday loans or loan renewals. So if you are the average customer, let’s say you roll over or renew your $500 loan 10 times in one year. To borrow $500 for 10 weeks, you will pay a total of $750 in finance charges plus repay the amount borrowed. Your $500 payday loan will end up costing you $1,250.There are additional risks and fees. To get a payday loan you are required to give the creditor a personal check as repayment. If your check bounces, your bank will charge you a fee – often as high as $40. You can lose your bank account or have difficulty opening a new bank account if you develop a record of bouncing checks used to get payday loans.Before you take out a payday loan, carefully consider the real cost – and ask yourself if it’s worth it.
Business Capital Solutions In Canada: Accessing Proper Cash Flow & Commercial Financing
Business capital requirements in Canada often boil down to some basic truths the business owner/financial mgr/entrepreneur needs to address when it comes to financing for businesses.
One of those truths? Knowing the true state of their financial condition and what financing they do and don’t qualify for when it comes to meeting commercial lending requirements in Canadian business.
Business Loans In Canada
Whether you are smaller or start-up firm looking for information on how to get a business loan or a larger established firm looking for growth financing or acquisition opportunities we’re highlighting 3 mistakes that commercial loan seekers like your company need to avoid making when addressing, sourcing and negotiating your cash flow / working capital and commercial financing needs.
1. Understand the true condition of your company finances – These are almost always successful addressed when you spend time on your financials and understand how your financial statements reflect your access to commercial loans & business credit in general
2. Ensure you have a plan in place for sales growth and financial needs as it relates to commercial financing
3. Understand that actual hard facts about cash flow which is, of course, the lifeblood of your company
Can you honestly answer or feel positive about all those 3 points. If so, pass Go and collect $ 100.00!
A good way to address your company’s finance plans is to ensure you understand growth finance solutions, as well as how to manage in a downturn – i.e. not growing, losing money, etc; It’s never fun to fund yourself in an economic or industry downturn such as the COVID pandemic of 2020!
When we talk to clients of new or established businesses it seems they are almost always talking about sales, so the ability to understand and focus on the differences in their profits and cash fluctuations is key.
How do cash flow and sales plans and projections affect the type of financing you require? For one thing sales growth usually starts out by consuming your cash, not generating it. A poor finance plan will drag your business down and addressing financing simply gets tougher and tougher.
Three basics always emerge when it comes to your search for the right business capital and financing.
1. The amount of financing you need
2. The type of financing (debt/cash flow/asset monetization) The business loan interest rate will be dramatically affected by whether you choose traditional or alternative financing solutions. Private business loans in Canada come from non regulated commercial finance companies most often known as ‘ alternative lenders ‘. These lenders are typically highly specialized in one ‘ niche ‘ of business financing and may be Canadian firms or branches of U.S. banks and non-bank lenders
3. How the financing is structured to be manageable with your day to day operations
What Finance Company In Canada Can Meet Your Borrowing Needs & Why Is Capital Important In Business
Let’s identify and break down key financings your firm should know about and understand if they are applicable and achievable to your business. They include:
A/R Financing / Factoring / Confidential Receivable Finance
Inventory finance / floor planning / retail inventory
Working Capital term loans
Unsecured cash flow loans
Merchant working capital loans/advances – these loans are geared toward short term cash needs and are typically one year in duration. Loan amounts are typically 15-20% of your annual sales revenues.
Royalty finance
Asset based non bank business lines of credit
Tax credit financing (SR&ED bridge loans)
Equipment Leasing / Sale leasebacks – Equipment financing in Canada is used by almost 80% of all companies looking to acquire new, and used, assets.
Govt Guaranteed Small Business Loan program – Government Loans in Canada are sometimes referred to as ‘ SBL’, aka Note: BDC Finance solutions are available from this Canadian non-bricks and morter crown corporation. A small business loan via the government-guaranteed loan program comes with true flexibility around term loan duration, market rates, no pre payment penalties, and of course the low personal guarantee that is required by borrowers. These two ‘ government ‘ loan solutions are often perfect for financing a new business.
If you’re focused on not making mistakes in your business finance needs and want to capitalize on the solutions your competitors are probably already using seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow and commercial financing needs.
Stan has had a successful career with some of the world’s largest and most successful corporations.
His employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) In 2004 Stan founded 7 PARK AVENUE FINANCIAL – He is an expert in Canadian Business Financing.
US Markets in green on Friday; Dow 30 up over 345 points, Nasdaq Composite, S&P 500 up nearly 1%
US Markets were trading in the green on Friday with Dow 30 trading at 30,678.80, up by 1.14%. While S&P 500 was trading at 3,701.66, up by 0.98% and Nasdaq Composite 10,690.60 was also up by 0.71 per cent
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US Markets in green on Friday; Dow 30 up over 345 points, Nasdaq Composite, S&P 500 up nearly 1%
Earlier today, Indian stock markets ended the week on a winning note. It was the sixth straight gains for equity markets. Source: Reuters
US Markets were trading in the green on Friday with Dow 30 trading at 30,678.80, up by 345.25 points or1.14 per cent. While S&P 500 was trading at 3,701.66, up by 35.88 points or 0.98 per cent and Nasdaq Composite 10,690.60 was also up 75.75 points or 0.71 per cent. A Reuters report said that today’s strength was on the back of a report which said the Federal Reserve will likely debate on signaling plans for a smaller interest rate hike in December, reversing declines set off by social media firms after Snap Inc’s ad warning.
Source: Comex
Nasdaq Top Gainers and Losers
Source: Nasdaq
Earlier today, Indian stock markets ended the week on a winning note. It was the sixth straight gains for equity markets. The BSE Sensex ended at 59,307.15, up by 104.25 points or 0.18 per cent from the Thursday closing level. Meanwhile, the Nifty50 index closed at 17,590.00, higher by 26.05 points or 0.15 per cent. In the 30-share Sensex, 13 stocks gained while the remaining 17 ended on the losing side. In the 50-stock Nifty50, 21 stocks advanced while 29 declined.