Need Equipment Loan and Lease Financing ? Re-program Your Leasing Finance Strategy Today !

Sometimes you just need to re-program things to make them work better – that’s what we’re also suggesting when you review your lease finance and equipment loan financing strategies for your company.

Let’s examine how you can maximize your leasing strategy to attain maximum benefits and minimum hassle! That’s clearly a win win strategy.

Focus clearly on eliminating what we can only call the ‘hassles’ of dealing with other types of financing , It’s all about ‘ time’ and your ‘ business bandwidth ‘ today when you are visiting a new asset acquisition . Without a doubt we can state that leasing equpment is by far the quickest method of obtaining an approval, satisfying both your vendors need as well as your own time constraints.

With only a very basic financial calculator you can quickly review all your lease finance options – the favorite question of almost all clients is: ‘ What will my monthly payment be?’ It’s about time for you to answer that question yourself, and make sure that your cash flow and working capital remain intact on the equipment loan financing you are contemplating. How? Just remember that the only elements to any lease are: term, rate, amount financed, payment, and end of term option. If you know any 4 of those you can always solve for the final item, which in our case is payment. You should assume an interest rate that is consistent with your firms overall credit quality.

Business owners and financial managers should view their lease finance acquisitions in the context of your overall financial strategy. You might need to’ re – program ‘ your thinking on buying and paying for assets outright . Doesn’t it make more sense to keep your cash and line of credit reserves intact, and match the useful economic life of the asset you are acquiring to a predicable cash outlay?

A quick way to’ re program ‘ your leasing needs is simply to always use the same business template for each asset you are acquiring . They key aspects of that decision template, if we can call it that are: cash flow budgeting re the monthly lease payment, reviewing the asset in the context of not having to draw on your business operating line of credit, determining how long you will use the equipment for (thereby matching term and payment) and finally, factoring in balance sheet and tax advantages into your asset acquisition decision.

What’s the biggest’ re programming’ issue with most firms . It’s simply their mild obsession with ‘ rate ‘. Yes a rate has to be competitive, but view the lease financing rate in the context of the current interest rate environment , the challenge of getting traditional bank financing, and the fact that in the current 2011 environment rates are probably going up and not down . The real reality is that you determine your own rates in your new leasing re programming strategy! That’s because the largest factor in determining rates for equipment financing is the manner in which you properly present your overall credit quality and financial health.

In summary, equipment loan financing, aka ‘ leasing’ has been around for over a hundred years in North America. Take a hard look at why you finance your assets, reprogram your strategies around benefits and ‘ how to ‘, and acquire your assets with the knowledge you have made the best financial decision for your firm. Need help ? Given a choice we’ll take an expert over a rookie any day ! Speak to a trusted, credible and experienced Canadian business financing advisor who will work on your ‘ re programming strategy with you!

Refinance Homes: It Should Be Approached with Caution

There are many companies that can be readily found which offer great rates in order to refinance homes. Whether you are in need of money for a major upcoming expense or are seeking to make significant home improvements or simply want to pay off your high interest credit card debt, refinancing your mortgage might be an option worth considering. If this is something you are considering be sure that you shop around, study your options, and find the best possible overall situation for your personal and financial needs.

For the average person, a home is the single largest investment he or she will make during the course of his or her lifetime. As such, the decision to refinance and place your home in further or prolonged risk should not be taken lightly. There are many things you should consider before deciding to refinance your home. The first and possibly most important thing is whether or not there are other options that might require less personal and financial risk?

No one really likes to hear the word sacrifice, but in order to avoid the financial risks involved for those who refinance their homes. If giving up Starbuck’s, taking the lesser cable package, and resorting to dial up for a while will help you get your finances back on track those are far superior options than choosing refinance your home loan.

Some other things to keep in mind when considering whether or not to refinance home loans is whether or not you are willing to go through the process of application fees, points, closing costs, and private mortgage insurance all over again? Also are you willing to give up the equity in your home and the security that equity provides? Another thing to keep in mind when considering refinancing your home is that your interest rate will probably be a bit higher on your second mortgage than on your original loan. This means that you will pay considerably more money over time.

There are however times when refinancing homes is a great option. One time when this is a perfectly wonderful idea is when you refinance your home in order to pay off your high interest credit cards. Of course, this is only effective if you “go forth and sin no more” as the saying goes. If you pay off your high interest credit cards only to go out and spend madly, you’ve defeated the purpose and no longer have the equity in your home for security.

Another time when refinancing homes is a wise decision is on one of those rare occasions when the average interest rate is lower than your current interest rate, or when your adjustable rate honeymoon is about to be over and you would be wise to find a fixed rate mortgage rather than paying the adjusted interest rate, which could be much higher. The important thing is that you find a lender that you can build a rapport with and that is willing to not only discuss your long and short term financial goals as a result of the refinance of your home, but also willing to work with you in order to make sure you have the foundation to achieve those goals.

Your Personal Finances and “The Broken Window” Theory

Managing my family’s finances and investment portfolio, I enjoy applying abstract economic theories to everyday decision-making. I came across renowned economist, Henry Hazlitt, twenty years ago. In his seminal book, Economics in One Lesson, he lays out a theory that I encounter in my personal finances every day.

The Broken Window Theory looks at every economic transaction in three steps instead of two. There’s the seller and the buyer, of course, engaging in trade. But there is also the third person, the one who wasn’t there, the trader whose goods the buyer didn’t buy because he bought something else.

In my personal finances I make buying decisions every day. Will I buy organic milk or regular milk? Apples or oranges? Meat or chicken? I make these financial decisions because I need these products and because I have a limited amount of money to spend on food. Every time I buy organic milk, the regular milk vendor loses a potential sale.

In a free market environment, The Broken Window theory is even more interesting because competition offers you a range of vendors and products to choose from in the same field. In that case, The Broken Window Theory relates both to the item you buy and the person you buy it from.

The Broken Window theory becomes even more relevant to your personal finances when you consider financial decisions that are forced on you. To use Hazlitt’s example, if someone throws a rock through your window and breaks it, you find yourself suddenly forced to spend money on a new window. You gain nothing that you didn’t already have, and yet you spend money in the transaction. If the window hadn’t been broken, you might have bought a new coat or gone out to dinner instead.

In my personal finances I come across the Broken Window theory in several ways. When I make a bad financial decision, for example buy a beautiful dress even though I have several in the closet, I end up with less money to spend on the things I truly need.

If I buy the dress on a credit card because I don’t really have the money anyway, I not only wipe out the potential for buying something useful, but I commit my future earnings to paying off both the dress and the interest on the loan.

Thinking of my financial decisions with the three-layered perspective of The Broken Window theory keeps me from getting tempted to buy things I shouldn’t. This is especially helpful when I see items on sale, which increases the temptation to buy even more.

The Broken Window theory also applies to my personal income. My salary takes me a fixed number of hours to earn. I could be spending these hours doing something else. This leads me to question whether my lifestyle is too expensive, whether earning the livelihood I need is consuming too much of my free time.

In short, The Broken Window theory keeps me on my toes when it comes to my personal finances. That something else, the unidentified commodity that I lose when I choose one path over another, always reminds me that every decision wipes out a slew of alternative options. I have to make sure that I don’t break windows in my life. In other words, that I don’t end up spending my limited resources on things I already have and don’t really need.

 

Refinanced Your Home Lately? Be Prepared for the Unexpected!

Unless you’ve been hiding under a rock, I’m sure you’re heard that home mortgage rates are at all-time lows. But unless you’ve recently refinanced, what you may not have heard is that the process can be nothing short of a nightmare-for you and your Loan Officer. That’s right-money may be cheap these days, but ‘easy’ it is not.

Let’s start with the obvious, your home’s value. Gone are the days of the “Do you have a pulse and can you fog a mirror?” loans, where stated values were used. And back in the ‘old days’ when lenders did require a licensed 3rd party appraiser to inspect and photograph your home inside and out and analyze a multitude of data to determine the price your home would fetch in an open and competitive market–the appraiser’s opinion of value was generally accepted, with few questions asked.

But no more! With the housing market crash, no matter how much an appraiser justifies value, chances are it’s not going to be accepted. In a lender’s foreclosure, it’s this always changing difference between your home’s value and what you owe that can literally ‘break their bank’.

Whether it’s before your loan closes or after you default and your lender forecloses, they want to make sure your home can be sold for enough money to pay off your mortgage balance and all associated costs they’ll incur in getting rid of your home-which costs, according to the Joint Economic Committee of Congress-can average a whopping $77,935!

THIS is why your home’s value is critical -can your equity absorb your lender’s cost to foreclose? And the nightmare in today’s market? No one can figure that out! It’s like trying to appraise a pile of crumbling rock during earthquake after-tremors. Lenders need more valuation proof. They want more “comparables”-recent sales of nearby homes like yours-as many as 5 and 6 rather than what used to be the standard 3. And if you’re watching “For Sale” and “Foreclosure” signs proliferate in your neighborhood for months on end, then you’re right in thinking appraisers must be having a difficult time finding 3 cookie-cutter open and competitive market sales.

Lenders also want more neighborhood data like foreclosure and short-sale trends in the ‘hood’. They want more ‘desk reviews’ (that’s when an appraiser in NY City sits at a ‘desk’ and reviews a local South Carolina appraiser’s opinion of value on a quaint little country home in the Low Country), and more “AVM’s”, an automated valuation model using scientific measures and computer decision logic, versus a human’s inclination and actual details of the home or transaction.

Here’s a real example of a recent refinance my Loan Officer colleague had to deal with:

His borrower was refinancing to a lower rate where the first appraisal came in at $287,000. The homeowner knew his home’s value was low-balled. So another appraisal was ordered, which came in at $345,000. That’s a big $58,000 difference, his equity. Next, the lender ordered the “AVM”, which is like selecting a spouse from an on-line dating site based on nothing but physical stats. And what happens? Well, of course, the “AVM” result was that it can’t support the $345,000 value. Next came the dreaded desk review, performed by an appraiser who wasn’t familiar with local market conditions and who didn’t physically inspect the property, neighborhood or comps. So naturally, the desk reviewer (who’s also covering his ‘backside’) goes conservative at $284,000. And which figure did the lender use? $312,000. Are you scratching your head yet? And, you want to hear the worst part? The cost for determining value is the borrower’s responsibility. In this particular case, what should have been a $400 appraisal cost ended up being over $1,100!

To summarize, if you’re thinking about refinancing, brace yourself. Yes, take advantage of today’s low rates if you can, but be prepared in today’s market that if you ask 5 experts what your home is worth, chances are, you’ll get 5 very different opinions.

What to Look for in a Debt Management Program

Everyone probably has debt. In fact, a survey shows that at least 70% of American households have credit card debts and this is because they spend more than they earn. If you are looking for a way to achieve debt relief, debt getting a debt management program might just be the best way for you to achieve a debt-free, worry free life.

If you have debt, you are probably always facing a barrage of phone calls from collection companies right now. Your first impulse might be to ignore these calls as we sometimes ignore the unpleasant things in life, hoping they would just go away. But these debt collectors wouldn’t go away. They will hound you and the best thing to do would be to face them now before things go worse. The best thing for you to would be to get into a debt management program. What are debt management programs anyway?

Most of your creditors wouldn’t want to settle your debts with you. They would want to bring a third party into the scene and most of the time, these are debt counseling agencies with debt management programs. These agencies will be the one to negotiate with your creditors and will be the one to budget your monthly payments in case you have a number of debtors. On top of that, they provide counseling to make sure that you don’t go back into the same routine again and even get deeper into debt.

However, not all debt management programs and debt counseling agencies are created equal. There are those who are better at helping you and here are some of the ways to find them:

A good credit counselor

A debt management program is indeed catered towards helping you pay off your debts but most importantly, it should incorporate a program that will help you better manage your finances. As such, a great program should be carried out by a good credit counselor who will help you budget and explore other options when it comes to debt relief.

Licensed and accredited

There are a lot of scammers online posing as the solution to your debt problem. The best thing to do would be to make sure that before you get into any of their programs, they are accredited and licensed by your state just so you are sure that you are dealing with a legitimate company. The last thing that you need is to get scammed out of your hard-earned money and find out that your creditors haven’t been receiving any of your payments and you now have to face a huge amount of penalty fees and other charges.

No or minimal upfront fees

Most agencies ask for an upfront fee before you can enroll in their debt management program. The average upfront fee is $50-$100 dollars, don’t pay any more than that. Also, don’t get tricked into paying an acceptance fee, and then an application fee, and then a consultation fee and so on.

There are a lot of credible, trustworthy agencies out there. Just do your research and you should be able to find one that could help you achieve a debt-free life.

If you think this article is interesting, you may be interested in this Debt Collection article.

Should Married Couples Share Their Finances or Keep Their Money Separate? Part 1

Whether you are just getting engaged, in the honey moon stage, or have spent a life time together; the question of combining money is extremely important for most to make and only a passing thought for others.

The tradition of automatically pooling funds can be hard to break. It works well for some couples but the discussion of whether to pool your funds, keep them separate or a combination of the two is often a very difficult subject to approach.

Money problems are often cited as the most common trigger for arguments and one of the top reasons that married couples get divorced. Before walking down the aisle couples should spend a great deal of time discussing their feelings about money and deciding how they will handle finances from paying the electric bill to vacations to retirement. At the same time they should decide whether or not they will share their money, in whole or in part or not at all.

While the ultimate decision varies from couple to couple – many financial advisers recommend that married people each have some separate finances (including bank accounts and credit cards) and have a joint account for certain shared expenses (such as mortgages, child care, groceries, investment goals, etc.).

Separate Not Secret – Please keep in mind that separate does not mean secret. Avoid financial secrets as any secrets can be devastating to a marriage.

Some of the Basic Reasons to separate accounts include:

From simple things like:

Avoiding the frustration when your spouse forgets to tell you about checks written, ATM withdrawals, charges on your credit cards, or an eBay addition.

Protection – Protects at least the separate portion of your money from these factors as well as when there are more difficult issues that can arise when a marriage goes sour.

To more complicated Financial Issues:

Examples include those that are brought into the marriage, such as:

Issues from previous marriages, child support, alimony,

When one spouse brings a ton of debt into the marriage,

If one spouse is a spendthrift, a gambler, impulse buyer,

If one spouse gets the “its my money” bug. or

If one spouse brings a great deal of money, property or an anticipated inheritance in. (This is a good time to ask “Do you need a pre-nup?”)

Be sure to look out for Part 2 of this article to learn more and to help you decide if sharing all of your money with your spouse is right for you.

If you have feelings as to whether or not couples should share finances or example of good or bad experiences related to sharing (or not) finances please feel free to share them below in the comment section. The more people know about the good and bad that can occur the more likely they will be able to make a comfortable decision as to how to handle their own situation.

Please follow me to receive updates and new article so that you will not miss anything. Feel free to leave comments or suggestions for new articles, if there is anything that you would like to learn about investing or any of the other topics that I will be writing about.

5 Ways to Organize and Stay on Top of Your Finances in 2011

If 2011 is going to be the year you get ahead financially, you need a plan to stay organized and on top of your bills and cash flow. Missing bill payments, spending without a budget and not monitoring your bank accounts can end up costing you in the long run, and will make it harder to keep your financial house in order. Getting your bills and cash flow organized is essential for staying on top of your finances in 2011m and these activities can also help you budget better all year long.

Use these five tips to stay organized and on top of your finances in 2011:

  1. Create a budget blueprint. You can use financial software to make a budget, or just create your own using your favorite spreadsheet software. The goal is to create a basic outline of your cash flow – a comprehensive list of your monthly fixed and variable expenses, all of your income sources, and any big purchases you expect to make within the next six to twelve months. Use this blueprint as a guide and reference it regularly (see #2) to keep your finances organized.
  2. Review and revise your budget at least twice per month. Keep a close eye on your expenses and make sure all of your bills are paid on time by reviewing your budget or cash flow statement at least twice per month. Make sure you write down confirmation numbers of bills you paid online so that you can correct any mistakes easily.
  3. Pay your bills on a schedule. If you can’t pay bills as soon as you receive them, at least have a plan to pay them on a specific date – well before the due date. One of the easiest ways to organize and stay on top of your finances in 2011 is by creating a bill payment schedule or calendar. Keep this calendar or schedule in a visible place so that you never miss a bill payment again.
  4. Create a monthly checklist of luxury or extra expenses. Are you planning on purchasing a big-ticket item this month? Are you looking to splurge on something for a special occasion? Create a list of these “upcoming” expenses so that you can add them to your budget and keep track of your expenditures. Forecasting your expense in this way can help you better organize your finances and may also prevent you from overspending.
  5. Open at least one checking account at a local bank. Even if you do most of your banking online, stay organized and don’t worry about check cashing by having an account at a local bank. Open a checking account at a local bank so that you can get an ATM fee-free debit card, and also cash your checks without having to pay a fee. Make sure you understand what your limitations are with this account and that you understand the minimum balance you have to maintain in order to avoid fees.

Managing Expenses for an Audit

Tracking your expenses is an integral step in managing your business’ finances. Unfortunately, merely writing down what you spend doesn’t cut it anymore.

When the IRS wants to have a look at what you’re writing off, or a potential acquirer for your small business wants to see how you spend your money, without any expense organization, you could end up deep over your head.

The following three tips for expense management will help survive your next audit:

1) Keep All of your Receipts

Anytime you spend over $75 on a business expense the IRS will require a receipt for it. But any business expense under $75, you are required to provide “convincing documentation” that the expense was actually incurred for a business purpose. While a calendar entry will provide some proof of a business expense, leave no doubt in your auditor’s mind by saving and collecting all of receipts, not just the expensive expenditures. There are plenty of portable receipt scanners out there such as ProOnGo Expense and Neat Receipts, but whatever you do, make sure you have a way to easily collect and store your receipts.

2) Log your Miles

Warren Buffet wrote-off his bicycle on his first income tax statement as a transportation cost at the age of 14. While you may not ride a bike to work, you can certainly write off the miles you drive. If you drive 20 miles round trip for work every day, then you could can write-off $10 for every day you drove to work in 2010.

3) Track both Business AND Personal Expenses

If you’re undergoing an audit, the main objective is to convince the auditor that the numbers you keep are dependable and accurate. This is why keeping track of your personal expenses, in addition to your business expenses, can give your auditor more confidence in your math. If you demonstrate you have a full understanding of what you can and can’t write off as business expenses, you will instill that much more confidence in your numbers.

An audit can be a major headache. Fortunately, expense management is a powerful tool in protecting yourself in case of an audit, so make sure you take the proper precautions the next time your write off your next business expense.