If you have extremely bad credit and find yourself in a financial bind, one of the few kinds of financing you can turn to is payday loans. In recent years, it’s become easier and easier to obtain payday loans, and more cash advance stores have popped up in the US than there are McDonald’s and Starbucks combined. The money comes with no restrictions on it and can be obtained within minutes of filling out the application.However, payday loans have a darker side. They should only be used as an emergency funding source when they are really needed, and should not replace fiscal responsibility or other means as a regular source of funds. If they do, you can end up in a trap and pay several hundred percent interest each year on small loans.What is a Payday Loan?A payday loan is a short term loan given in small amounts of money, usually in the range of $100 to $500 depending on the size of your paycheck. The lender then charges a certain fee, usually around $10 to $20, and you pay the loan back with the fee you’re your next paycheck is issued. There are no credit checks involved in the application process so anyone can applyIn order to get approved you to only meet a few general criteria. You must be 18 years old and have a checking account and a steady job. The application process only involves the gathering of basic information such as your name, employment, address, and banking information. The money usually gets put in your account the same day, many times a few hours or minutes after your apply.What a Payday Loan Should be Used ForA payday loan should only be used in emergencies and to meet very short term needs that you absolutely cannot wait to get money for. In this circumstance and this circumstance only should you take out a payday loan and pay it back with your very next check. Never make a habit out of using them.The Dangers of Payday LoansPayday loans are dangerous because they get people into a trap. If you can’t afford certain expenses this payday, odds are you’re not going to be able to afford them next payday either, especially after losing a few hundred dollars to pay back your loan. The loan companies know this and will gladly roll over your loan for you, granted that you pay them the interest and fees due for this payday. If you get caught in this trap, you will end up paying huge amounts in interest by the time you can pay off the loan.As an example, assume you borrow $200 and pay $20 in fees for the service, which is at the low end of the spectrum. You pay this every two weeks until you can pay the loan off. Within 10 pay periods (20 weeks) you will have paid as much in interest as you paid on the original loan. If you carry the loan over the entire year, you’ll have ended up paying $520 in interest, which works out to 260% annually. Compare this rate to credit cards, which are considered to have high rates, but they only charge 20 to 30% annually on their cards! This fact makes payday loans an industry on the fringes of society because many of them prey on the poorer elements of society.If you are thinking about taking out a payday loan, make sure that you do your research. Be aware of all the terms and conditions that may apply. The internet makes comparison shopping easy; make sure you take advantage of this to save a few dollars on fees each payday. But above all take a serious look at your financial situation. See why you need to take out a payday loan and do everything in your power to eliminate this need in the future. It may be hard to cut your spending and save money, but it’s better than falling into a cycle of debt from which you might not be able to dig yourself out of.
Business Loans In Canada: Financing Solutions Via Alternative Finance & Traditional Funding
Business loans and finance for a business just may have gotten good again? The pursuit of credit and funding of cash flow solutions for your business often seems like an eternal challenge, even in the best of times, let alone any industry or economic crisis. Let’s dig in.
Since the 2008 financial crisis there’s been a lot of change in finance options from lenders for corporate loans. Canadian business owners and financial managers have excess from everything from peer-to-peer company loans, varied alternative finance solutions, as well of course as the traditional financing offered by Canadian chartered banks.
Those online business loans referenced above are popular and arose out of the merchant cash advance programs in the United States. Loans are based on a percentage of your annual sales, typically in the 15-20% range. The loans are certainly expensive but are viewed as easy to obtain by many small businesses, including retailers who sell on a cash or credit card basis.
Depending on your firm’s circumstances and your ability to truly understand the different choices available to firms searching for SME COMMERCIAL FINANCE options. Those small to medium sized companies ( the definition of ‘ small business ‘ certainly varies as to what is small – often defined as businesses with less than 500 employees! )
How then do we create our road map for external financing techniques and solutions? A simpler way to look at it is to categorize these different financing options under:
Debt / Loans
Asset Based Financing
Alternative Hybrid type solutions
Many top experts maintain that the alternative financing solutions currently available to your firm, in fact are on par with Canadian chartered bank financing when it comes to a full spectrum of funding. The alternative lender is typically a private commercial finance company with a niche in one of the various asset finance areas
If there is one significant trend that’s ‘ sticking ‘it’s Asset Based Finance. The ability of firms to obtain funding via assets such as accounts receivable, inventory and fixed assets with no major emphasis on balance sheet structure and profits and cash flow ( those three elements drive bank financing approval in no small measure ) is the key to success in ABL ( Asset Based Lending ).
Factoring, aka ‘ Receivable Finance ‘ is the other huge driver in trade finance in Canada. In some cases, it’s the only way for firms to be able to sell and finance clients in other geographies/countries.
The rise of ‘ online finance ‘ also can’t be diminished. Whether it’s accessing ‘ crowdfunding’ or sourcing working capital term loans, the technological pace continues at what seems a feverish pace. One only has to read a business daily such as the Globe & Mail or Financial Post to understand the challenge of small business accessing business capital.
Business owners/financial mgrs often find their company at a ‘ turning point ‘ in their history – that time when financing is needed or opportunities and risks can’t be taken. While putting or getting new equity in the business is often impossible, the reality is that the majority of businesses with SME commercial finance needs aren’t, shall we say, ‘ suited’ to this type of funding and capital raising. Business loan interest rates vary with non-traditional financing but offer more flexibility and ease of access to capital.
We’re also the first to remind clients that they should not forget govt solutions in business capital. Two of the best programs are the GovernmentSmall Business Loan Canada (maximum availability = $ 1,000,000.00) as well as the SR&ED program which allows business owners to recapture R&D capital costs. Sred credits can also be financed once they are filed.
Those latter two finance alternatives are often very well suited to business start up loans. We should not forget that asset finance, often called ‘ ABL ‘ by those Bay Street guys, can even be used as a loan to buy a business.
If you’re looking to get the right balance of liquidity and risk coupled with the flexibility to grow your business seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist you with your funding needs.
Choosing the Best eCommerce Solution
Finding an ecommerce solution for your internet-based business
can be a complicated process because there are so many different
options. In order to set up an automated ordering system, which
is crucial by the way, you simply have to have an ecommerce
solution that enables visitors to your website to make a purchase
and pay for it without unnecessary hassles. If your ecommerce
solution is too complex or does not provide website visitors with
a variety of ways to make a payment, you will undoubtedly lose
sales. Another important aspect of an ecommerce solution is
security. Your customers must feel that it is safe and secure to
place an order online because otherwise, their personal
information and financial information could be jeopardized.If you plan to operate a successful ecommerce website, you simply
must have an ecommerce solution that enables you to accept credit
cards. Statistics repeatedly show that the ability to accept
credit cards increases sales. Once upon a time consumers were
timid about placing orders online using a credit card; however,
with improvement to ecommerce solutions including the
availability of encrypted SSL (Secure Socket Layer) which
provides security for web-based transactions, the fears of having
credit card information intercepted in transit have been
eliminated. An ecommerce solution should feature a secure server
which uses encryption to keep your customers’ personal
information and credit card numbers safe and secure so they don’t
have to be concerned about being subjected to fraud.There are a few basic ecommerce solution options for accepting
credit cards online. You can open a merchant account through your
bank, use an internet-based broker, use a fulfillment house to
process your orders, or use a third party merchant account
provider. Things to consider when choosing an ecommerce solution
for your merchant account are the monthly fees, the discount rate
(the percent you are charged per transaction), the ease and speed
of processing, and the method for accessing your money.You also should consider the types of cards your ecommerce
solution allows you to accept through your merchant account. The
major credit cards that you should accept include MasterCard,
Visa, American Express, and Discover. Since ecommerce enables you
to sell your products or services worldwide, an ecommerce
solution that empowers you to accept credit cards internationally
and in different currencies can also be important.Next to accepting credit cards through your ecommerce solution,
you may want to consider offering other payment options. Some
options to consider include the acceptance of PayPal payments,
debit cards, online checks, and digital cash. Of course, for
those who are still leery about ordering online, a toll free
phone number and a form for fax or mail orders should be provided
as an alternative to ordering online. At any rate, your ecommerce
solution should provide plenty of options to meet the unique
needs of every customer who may want to buy from your company and
the ecommerce solution should make the customers feel that
placing an order with you is completely free from risk.So, what is the best ecommerce solution for you? That is up to
you to decide. The features to compare before selecting an
ecommerce solution include:1. Security2. Cost3. Speed of processing4. Variety of options for the consumer5. Ability to access your moneyWhen you choose an ecommerce solution compare these features.
Keep in mind that your ecommerce solution simply must give your
customers a sense of security so they will have confidence when
placing an online order with your company. Also remember that
even though there are costs associated with accepting credit
cards, the increase in sales that your company experiences when
adding an ecommerce solution for accepting credit cards is well
worth the expense.