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Finance

Leverage, capital structure rules and financing principles

Viewed historically, the financing policy of German companies can be characterized by a continuous process of substituting equity for debt. As part of this increasing debt, the more expensive but flexible equity factor is partially replaced by the cheaper but inflexible debt capital factor. Check kiss918 site while learning classic financing rules.

Classic financing rules

In the context of the classic financing rules in business administration, a distinction must be made between the horizontal and vertical capital structure rule.

Horizontal capital structure rule

The horizontal capital structure rule requires a congruence of the maturity of the capital provision with the commitment period of the assets so that the fixed assets are to be financed with equity capital and possibly with long-term debt capital and the current assets with short-term debt capital.

Vertical capital structure rule

The vertical capital structure rule requires the equity capital to correspond to the creditor capital and thus a debt ratio of one. These balance sheet structure standards are primarily intended to ensure the company’s liquidity and are in this respect oriented towards the interests of the creditors with regard to securing interest and principal payments.

It should be noted that strict adherence to these financing rules from a liquidity point of view is normally not necessary and often insufficient in the event of a crisis, since there is income between the accounting categories of assets and capital, to which the rules refer, and the financial categories that determine liquidity and spending only have a very indirect relationship. In this respect, the accounting categories can only inadequately reflect the financial status of a company, since the following differences exist between assets/capital on the one hand and income/expenditure on the other:

In principle, there is no correspondence in the temporal distribution of the two categories, since the capital structure rules assume that the revenue process does not generate cash in the event of a crisis. Particularly in crises, parts of the current assets that are supposedly tied up for a short time turn out to be partly unsaleable, while isolated parts of the fixed assets may be available as liquidity reserves that are available at relatively short notice.

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Finance

Financial Management And Planning For Businesses

“It takes money to make money.”

Businesses, regardless of the scale, need to take into account their finances for various reasons such as for business expansion or for survival during bad times. The way you fund your business could affect your capacity to implement certain plans like obtaining permits and licenses, hiring employees, purchasing inventory, marketing initiatives, and for business growth and expansion. Although it isn’t essentially as vital as the vision of the business as well as the product/service it offer, finances are vital to make possible the good and great stuff.

Singapore SME Loan, for instance, provides loan assistance to small-medium enterprises (SMEs) in order for them to implement or carry out the plans they have for the business to grow and expand. Some of the loan brokering service they offer include Working Capital and Business Term Loans, Equipment Financing and Hire Purchase, Commodity Trade Line and Financing, Temporary Bridging Loan, and Invoice Factoring.

Business Financial Management And Planning

Finance is necessary and essential for any business to help in carrying out and realizing the objectives and goals of the business. Since finance is very much important, businesses should be responsible and careful in managing its finances, which is a crucial aspect to any business. With financial management and planning, this will help in the decision-making processes, such as what to spend on, when is the right time to spend, as well as how much to spend, all of which depends on the availability of the funds.

Let’s have a look at other reasons as to why finance and financial management is imperative in any business.

Financial Management Helps the Business to Continue to Exist

A good and successful business generates revenue. This is where a business gets its finances to fund operational costs, such as payment for utility bills, procurement of inventory, and payment of the employees’ salaries. The more a business earns by selling quality products and/or services, the more the role of financial management and planning is crucial in a business as you ensure your earnings are put to good use for your business to continue to grow and exist. Mismanagement of funds could be the collapse of a business.

Availability of Sufficient Funds

Adequate available funds are essential for short-term and long-term business goals to be achieved. Having adequate available funds also ensures that there is enough available money for any unexpected circumstances. Moreover, the business should also know where to get the funds should the need arise to handle the financial crisis.

Management System for Cash Flow

While a surplus of cash flow seems to be a good thing, managing it could be difficult. Having a surplus of funds and not making use of it in such a way that is useful and beneficial to the business is a big waste of available financial resource. Hence, you should have a plan on how and where to use these funds wherein it would build up your business and yield you more earnings.

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Uncategorized

Using Short Selling to Your Advantage

Short selling is simply selling borrowed security in order to buy it back when price declines. It actually not the ideal strategy to be applied by novice investors due to the big risks of loss. Regardless if you are into traditional trading or into crypto trading, it is not a very wise move. If you do insist, it is best that you read some Bitcoin exchange reviews to see how you can really take advantage of it.

But how it Works?

Inflation is one of the contributing factors for short-selling. Traders are buying securities similar to stock either though a stockbroker or a company. Most of the traders are using services of experienced brokers and opening trading account like cash or margin account. Going short means selling futures or security contract or even writing option believing that the price is going to decline.

On the same note, going long is about buying a security that’s expected to increase in its pricing. The trader does not own any security instead, it is borrowed from the stock broker. The trader is going to buy the same volume of stocks so they can close short and then, return it to their brokerage firm. Traders are buying back securities after the decline of a price and make a profit out of it. The opposite thing happens though when price is going up as that is when they lose money.

Benefits of Short Selling and why it should be Considered?

There are various reasons for a trader to sell short and among it is to protect their portfolio or investment instruments. Traders are opting to sell short when they have plenty of long positions. This is a way of hedging risks.

Another common reason is by making money during bearish market when the stock’s value is expected to fall. One concern with this form of trading strategy is that, there are a lot of risks associated to this. The price of the stock may keep going up and there’s no limitation to the loss. Yet another challenge is that, traders do owe dividends and rights that come with the stock. This is basically how stockbrokers are benefiting from it. So as much as possible, do in-depth research about dividends that your chosen stock pays.

Profiting from Short Selling

Needless to say, the end goal is to generate profits from short selling. One way of doing this is by using negative return momentum. Whether you’ll make money or not entirely lies on the market conditions. Regardless if it is in a down or up market, you should always find opportunities as well as ways of minimizing risks and maximizing profits.

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Uncategorized

How much Do You Know about Money Transfers?

good money lender

Wire transfer is almost always the answer when in sending or receiving money fast. And why not, it gets the job done! It is reliable, fast and completely safe! And for big and more serious transactions such as buying a house or a car, doing a wire transfer may be the sole options since the funds can be instantaneously received by the vendor. In fact, even when using the services of money lender Singapore, you’ll be surprised that the money you requested can be wired to your bank account as well.

What is it exactly anyway?

Wire transfer can be described as any kind of electronic money transfer. Normally, if someone requested for bank wire, they wanted a domestic or traditional bank-to-bank transfer. When you say traditional money wire, this goes from one bank to the other using a network.

On the other hand, the term wire transfer is applicable to several other kinds of transfers. To give you an example, US consumers may wire money to folks abroad via international wire transfers which is otherwise known as remittance transfers. Aside from banks, financial services firms and credit unions may act as providers for money transfers. This is the reason why it is vitally important to have clarity of the requirements when someone requested for a wire transfer.

The Fee for Wire Transfer Transactions

When compared to other electronic payments, bank wires may cost money which ranges from 15 to 50 dollars for every transaction. The fee on the other hand is variable depending on which bank you are doing business with and to whether the wire is incoming or outgoing or international or domestic and let us not forget, the amount to be transferred.

Generally speaking, domestic income wires will fall at lower end of the spectrum while the outgoing international wires will likely be the most expensive service. Aside from that, some banks are waiving domestic incoming fees depending on the account.

How Fast Wire Transfers are?

Money wires are extremely useful for the money can be moved within few days. Of course, this depends on where it is going.

The processing time may take few minutes. But within the US territory, the transfers may be processed within the same day, which will be based on how early you have submitted the request. As for international transfers, two days would be the most time needed to process the transaction.

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Finance

The Value Of Creating A Budget

good money lenderPeople have various impressions, perceptions and principles about borrowing money and debt. Although it may be alright for some to borrow money for whatever purpose, others may be strongly against it, or have strict rules when it comes to borrowing money. Regardless, there will be certain circumstances in our life that leave us no option or alternative but to borrow money by taking a loan from a good money lender.

Looking for a reliable good money lender to take a loan is imperative to ensure you are transacting with a licensed firm or individual and that they are operating with the standards and requirements of the law. Moreover, knowing that a good money lender is accredited by a professional accrediting team in the financial market and industry would increase your confidence and trust that you are transacting with reputable, trusted and professional money lending firm.

If you believe and think that you need to get a loan, make sure that you could manage to pay for any new regular repayments apart from your present monthly expenses. Hence, it is imperative to know precisely where you get your monthly income and where it goes to see whether or not you could pay for additional credit.

The Value of Creating a Budget

Creating a budget is fundamental and extremely important to efficiently manage your funds. Many may seem unwilling and unenthusiastic about creating a budget plan as they feel it is tedious work and very much restricts them from using their funds. Although it may be tedious and restricting, having a budget plan has its many short-term and long-term benefits as it helps you maximize your funds as well as save and accumulate wealth rather than overspending and being wasteful of your finances. Below are good reasons why it is essential to have a budget plan:

Prevents and Stops You from Overspending

Recklessly and irresponsibly spending your money once you receive your income or salary could easily lead to overspending. When you overspend, you restrict your spending capacity in the future as you have you have to pay off more debts. Make use of your budget to know when you have reached your limit and to stop spending.

Helps You Achieve Your Objectives

Having a budget aids in determining your spending priorities and objectives, and could help you focus your finances on things that are most essential and important, such as saving for a car or house, to be debt free, or for a start-up business. With a budget plan, you monitor your spending and make sure you are on track in realizing your goals.  

Encourages and Helps in Saving Money

Individuals without a budget are most likely to save less or have no savings at all. When you create a budget plan, you allot money for certain things and expenses. With technology today, you could now automatically transfer funds every month to your investment or savings account. Moreover, a budget plan would help you avoid and stop spending money intended for your savings or investment.

Creating an efficient and effective budget plan and sticking it will surely help you achieve the abovementioned and more. Most importantly, you can begin to build up wealth and achieve real wealth financial freedom.

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Finance, Financial Markets

Rapid Changes in Oil Prices Spur Spike in Oil Futures Derivatives

A spike in oil future derivatives is likely to transpire now that oil-producing countries finally took action to arrest the continuing decline in oil prices.

What Caused the Collapse in Global Oil Prices?

The collapse of global oil prices went as low as $2. per barrel, only to slump further at 25 cents per barrel. Price drops were driven by the excessive supply of oil amidst the coronavirus crisis. Inasmuch as the economies of countries across the globe halted, the demand for oil rapidly vanished and caused a reverse trend on how oil prices go in the global oil markets.

As prices continued to drop, member countries of the Organization of Petroleum Exporting Countries (OPEC) finally came to an agreement to cut their supply of oil. That way, a semblance of balance will be achieved if less will be available until such time that supply, becomes more or less, proportionate to current demand.

A more significant step that was taken, was the suspension of oil production. Since nearly all storage tanks remain full, none will be available if oil fields and drilling sites continue to pump out oil. Currently, the price of oil is coursing at an upward trend, as the demand for oil and petrol products is likewise increasing in countries that are gradually reopening their economies.

Still, rapid changes in oil price are  taking place, as countries in Asia where Russia’s oil are being delivered, are currently experiencing a second wave of the COVID-19 pandemic. In the U.S., several states are also experiencing a second wave; although it is widely suspected that the additional cases are mere extensions of the first wave.

Nonetheless, stock market investors have little confidence in buying shares of oil companies despite their ridiculously low prices. The general consensus is that it will take time before oil companies can recover from the losses caused by the oil-price collapse. That being the case, not a few, but many financial traders are turning their attention to oil futures and their related derivatives.

 

Newbies are Advised to Practice First Before Participating in Derivatives for Oil Futures

Although derivatives for oil futures may have the appeal of being a straightforward yet lucrative transaction, it would be best for newbies not to quickly jump in. The matter of making decisions on whether to agree (Yes) or disagree (No) to a proposition requires careful thinking and assessments of global conditions. A wrong decision over a proposition could spell substantial losses that one might find hard to recover.

Newbies should first take time to practice by using a demo or practice trading platform like the one that they will find at https://ipoption.com/

The platform is offered free of charge by leading CFD broker IQ Option Europe Limited, which comes with a 10,000 demo money value. This broker is licensed and regulated by the Cyprus Securities and Exchange Commission, which requires licensed brokers to offer a demo trading platform that has the same and exact features as the platform used for real money. The only difference is that the demo software runs only on demo-money.

Another great thing about using the IQ Option demo trading platform is that for a minimum deposit of $10, new members can practice all they want and for as along as they want.

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economy, Main Blogs

British Economy Slumps But The Worst Is Yet To Come

Britain’s economy contracted significantly in March. According to Commerzbank expert Peter Dixon, this is just the beginning. Because in addition to a much more severe slump in GDP, the country is heading for steep deficits.

No other country in Europe is grappling with the coronavirus pandemic like the UK – around 231,000 cases, more than 33,000 deaths, more than any other European country. The consequences for the economy are likely to be dramatic because of the severity of the outbreak, the Bank of England recently warned.

Bank of England predicts the worst slump in 300 years

The central bank anticipates a 14 percent decline in the gross domestic product (GDP) for the year as a whole – the hardest slump in over 300 years. The steep minus is the result of an unprecedented slump of 25 percent in the second quarter, after a decrease of “only” three percent in the first quarter, the bank predicts.

Commerzbank economist expects considerable losses

The GDP decline in March recently gave the first taste of this. Data released on Wednesday showed that economic output in March fell 5.8 percent from the previous month. In the entire first quarter, this was minus 2.2 percent.

“The worst is probably still ahead of us,” warned the expert for Great Britain, Ireland, and the British Federal Reserve. “Since the lockdown did not begin until late March, its full economic impact will not be felt until April,” said Dixon.

According to Dixon, economic activity at the end of March should have been about 25 percent lower than in February. Had the economy not recovered since then, there would have been a further 23 percent decline in the second quarter. However, Dixon expects the minus to be somewhat smaller due to the easing.

The economist’s expectations show that the Bank of England’s horror forecast has not exaggerated, especially since the central bank’s assumption was that the lockdown would remain so strict until June.

Britain pays € 17 billion a month to maintain jobs

In addition to the decline in GDP, Dixon anticipates that the pandemic will drive up British unemployment and will ultimately cause a significantly higher budget deficit – for example, through the so-called “Coronavirus Job Retention Scheme” (CJRS), which translates as “Coronavirus workplace”. Conservation System ”means.

This program will be extended beyond the second quarter to October, Dixon said. “To reduce costs, the workers on leave will be able to work part-time from August, with employers having to pay part of their salaries,” said the economist. After all, that helps to push down the cost of the CJRS, which currently costs the UK £ 15 billion a month.

Nonetheless, this cannot stop the decline in jobs. According to Dixon, the country’s unemployment rate is expected to rise by a whopping three percentage points from 3.5 percent in March to 6.5 percent in April. For comparison: In April the unemployment rate in Germany was 5.8 percent.

Public debt should rise by a quarter

While the public is eyeing for quick economic recovery, the consequence may lead many small and medium businesses to take out loans in private institutions like Loose Lending (https://looselending.com/).  For these reasons, Dixon expects significant deficits in the UK budget: “In our baseline scenario, we currently expect the government deficit to increase to around £ 250 billion (12.6 percent of GDP) in the fiscal year 2020-21.” The Treasury The country even reports a loss of 337 billion (16 percent of GDP), according to media reports.

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Uncategorized

Seeking Financial Assistance is something You must never be Ashamed Of

Only few know about it but there are actually government assistance from non-profit organizations or agencies that are working together to offer financial assistance both to individuals or family in need. Aside from that, there are free emergency financial help, government money issued from local partners or community agencies or even grants that can be taken advantage of. These resources can be used during times of financial difficulties.

Taking Advantage of What’s Just

The Federal government and state government along with local agencies might be offering financial help to pay for the following:

  • Utility bills
  • Funds to pay medical expenses
  • Health care
  • Rent

Literally, there are numerous food programs, credit card debt services as well as other government and charitable financial assistance programs that can be used. All you have to do is to explore and understand each program offered.

Let us face it, from time to time, financial crisis might come to people and will need money to get through it. Any individual or family who is struggling must never doubt in researching their county government or local state to check what sort of assistance program they can get.

Contacting local agency closest to you is a must to know what kind of financial help they can offer. Because remember, at the end of the day, this is where your tax money goes. It is just fitting to take advantage of it.

Programs that are Covering Multiple States

Government foreclosure and mortgage assistance can be used. Any homeowner who is seeking for free foreclosure or mortgage help and counseling as well from local or state non-profit HUD agency, they could look for additional state foreclosure and mortgage programs.

Federal government actually offers tons of housing assistance programs similar to HUD approved agencies whose job is to provide assistance to families who are in need. There might be money for HUD vouchers via security deposits, paying rent, moving costs and even government assistance to avoid evictions.

In addition to that, research for low income assistance programs that help meet the needs of struggling families. Most of these are actually coordinated and organized by state or federal government. They are offering loans or any forms of financial support.

Disability assistance is also offered by majority of state governments. Benefits are being provided to caretakers or directly to the person in question. They can help for applying on free health care, food, cash assistance, government money and the likes.

Last Resort?

Well, assuming that you have exhausted all your options, then seek help from bankruptcy attorney in San Diego.

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Finance

Missed Credit Card Payments Soar High Due To Corona Pandemic

While the stock market (visit stocktrades) is becoming unstable, many credit card payments have been skipped because millions of Americans have become unemployed as a result of the coronavirus epidemic. Banks and other lenders (who have relied on high consumer spending to make huge profits for years) are preparing to deal with customers.

Credit Card Payments Delayed Due to Coronavirus Outbreak

Credit card payments are one of the fastest places to find financial (short term) security. When a person runs out of funds, this is usually the first loan that goes unpaid. In general, security is not maintained, so if the credit card holder stops paying, the lender is rarely reimbursed.

Many major card issuers, including Capital One, Discover Financial Services, and Synchrony Financial, allow credit cardholders to suspend credit card payments for more than a month. Some have reduced or abandoned arrears and interest expenses, and assigned some customer credit.

With this pause, some borrowers can only float temporarily. Companies and analysts expect payment delays and amortization to increase later this year. Banks and other lenders can only pay unpaid loans until they face payment.

By this year, Discover and Synchrony’s stock market value has evaporated to more than half. This is much less than about a 12% drop in the market, while areas less affected by unemployment (e.g. technology, health care, and consumer necessities) are much worse.

Discover and Synchrony announced this week that payments to thousands of lenders, including many credit card customers, have been delayed. According to Nilson’s report, Capital One, which has about 120 million credit card accounts in the United States, registered 1% of valid card accounts in the extension. These three banks can measure the financial condition of some US consumers. Discover and Synchrony are generally not sold to high-yielding customers, Capital One has many customers and credit scores are below the perfect level.

Banks hope that delayed payments will take time to recover the economy and bring consumers back. However, for those who do not know when to resume work, this may not be enough. Even before the epidemic, many Americans were overwhelmed and used to record credit cards and other debt to keep pace with the increasing costs of college, healthcare, housing, and other costs.

Discover, Capital One, American Express Co., JP Morgan Chase & Co. And other card issuers have raised billions of dollars in additional funds to prepare for potentially large credit losses. “We’re clearly getting worse,” said Roger Hochschild, CEO of Discover Discovery. “It’s very fast and miserable.” Some lenders have reduced creditworthiness for new applicants or existing customers.

Banks like Citigroup Inc., Discover, and Synchrony have closed credit cards that haven’t been used for a while or have reduced spending limits. The company said it has taken steps to reduce risk before pandemics. However, due to these measures, some borrowers can only get loans when they need it most. However, for card issuers, loss of payment is not the only problem.

Card spending for travel and other categories is decreasing. This means that many of the fees charged by banks when making payments by card do not generate much income. And since people at home do not shop, many people cut their credit card costs. This is a problem for publishers specializing in business cards (including sync and affiliate data systems).

Brian Riley, Chief Credit Consultant of the Mercator Advisory Group, said: “Until everything is settled, the credit card’s profitability and risk will be greatly reduced.”

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Uncategorized

What Professionals Think about Budgeting?

If there’s one thing that you have to know about financial success, then it is the fact that it takes time and dedication. One more thing, thinking that making the right decision on a major money decision would do it, you better think of it again. Maybe you might think that other financially independent individuals and well-known businesses such as those in property management companies Atlanta happen to be financially-able. Truth is, they’re like every other average Joe as well that started with nothing and pulled off what seems to be the impossible.

Needless to say, you need to start somewhere. It may be confusing or a challenge to you where to begin; that is why we’ve taken the liberty to compile it to you. At last, you have a way out to build your budget, free yourself from debts and invest your savings that can then ultimately lead to solid financial and long-term success.

Thorough Understanding of Your Cash Flow

The word “budget” itself is a word feared by many people. Most think that it is so restrictive, complicated, boring and pointless. That is the problem because budgeting is really the single-most-important tool you can ever have in relation to managing and handling your finances.

It is the only tool that lets you to better understand how much is going out and coming in on a monthly basis. This can assist you to monitor and be on track with your goals and use your finances exactly the way you wanted it.

Simple Steps for Creating a Budget You can Easily Follow

Say that you have never tried preparing a budget before and has no clue on how to pull it off, then here are few things that can help you out.

Step 1. Monitor your cash flow – this is going to give you a good idea of how much of your money can be used for spending on things that are non-essential in life and at the same time, how much you could allocate to your financial goals.

To do this, allot time to figuring out how much is coming every month and set the costs that is going out similar to the following:

  • Phone bill
  • Rent
  • Transportation costs
  • Utilities

Once done, have an automatic contribution to it and set it at frequencies like doing weekly or monthly deposits from your checking directly to your savings account.

Step 2. Stay true to your budget – everyone has been having a hard time to stick with their budget. It is tempting to buy the latest gadgets or fall on promos that your favorite stores make. Remember, your budget is there for a purpose, it is not just a display.

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Uncategorized

Preparing Your Budget and making it through Financial Independence

Thinking that making ends meet makes you good in handling finances, well think again. There’s nothing to be worried if you are not a math genius because with your finances, exceptional math skills doesn’t matter. What you necessarily need is to be able to learn and understand the basics of subtraction and addition.

Better Financial Management

Life is so much easier if you are able to harvest remarkable financial skills from the way you are spending your money to where you are spending it. Basically speaking, the way you spend your finances will have a major impact towards your credit score and the debt you’ll end up carrying. Now, in the event that you are finding it difficult to manage your money, like trying to live from one paycheck to the other despite making more than what is enough, then here are few financial habits that you best should practice.

Create a Budget

Countless people do not have a budget because they are afraid to go through what they’ll think would be a dull process of listing out their monthly expenses.

It only adds stress to their end as the numbers begin to pile up while ensuring that everything is aligned with their plans.

In the event that you are unfortunately bad with handling money, then it gives you a stronger reason to work on your budgeting skills. If all it needs to keep you on track with your spending, what’s the point of not doing it? Rather than focusing on the actual process of preparing a budget, better concentrate on the value that it could bring to your life.

Using Your Budget

Your budget will be nothing if you don’t use it. Always refer to your budget constantly to set as guidance when it comes to your spending decisions. You have to update it when paying bills and spending on the rest of your monthly expenses. At any given period of the month, you ought to have an idea of how much is left and how much you can still spend. As a matter of fact, this is applicable if you are investing in https://cryptostory.io/ as well. It’ll serve as your map where to go with your finances and how it should be handled.

On the other hand, prior to making major purchases, be sure that it will not make any interference with anything you’ve planned. Do this, if you are serious to succeed with your finances.

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Uncategorized

The Proper Way of Allocating Your Finances

Following rules of thumb can guide you for making sensible decisions, especially on the financial matters. There are literally countless of financial rules that you can find today and all of which are aiming to grow your finances and at the same time, to keep you on track. While we all have different situations in life, knowing and following these “rules of thumb” can be of help.

So right before you use the financial services offered by https://mycaraccidentcashadvance.com/, better take these things into account.

If you are serious to turn your life over and have peace of mind on your finances, then make sure to read the entire thing.

Budgeting 101

On the subject of budgeting, there are many households that are having a hard time on how they can successfully pull it off.

As a matter of fact, there is this 50/30/20 rule that is used by financial experts. Whether you believe it or not, this is quite a popular rule when it comes to breaking down your budget.

The 50/30/20 rule means allocating a portion of your money into the following:

·         50% – this means that your income should go to the necessities such as utility bills and mortgage

·         20% – for this one, it needs to go directly to your financial goals such as saving for your retirement or paying off debt and;

·         30% – simply, this indicates that 30 percent of your income has to be allocated to your “wants” which include entertainment or dining

There’s also another variation to this rule such as the 80-20 rule wherein you put 20 percent of your income for all your financial goals while the remaining 80 percent should be spent on everything else.

Why this is Effective?

Are you unsure how to start figuring out your budget? Well then, breaking it up following these categories can help big time. Following those percentages will help in striking balance among your leisure, goals and responsibilities.

When not Apply it?                                                               

On the other hand, you may be in trouble using such principle if you are having a hard time in separating your wants and need. Living in low-cost area? Then putting 50% of your money to bills and housing may be too much. If you are not earning that much, then you may not even have the luxury of spending half of your income towards necessities.

Regardless, having these rules of thumb is a nice start for your spending.

 

 

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Main Blogs

Capital and credit for entrepreneurs

As a self-employed person, you may need credit at different times.

  • At the start of your business, you may need starting capital for the purchase of material, a car, IT equipment …
  • As your business grows and opportunities arise, you may want to invest more in the future of your business.
  • Sometimes it may also happen that you have a financial setback and that you have to bridge a difficult period.

Financial Wisdom For Entrepreneurs

Borrow from the bank

In addition to a founding capital, which you need to set up a certain legal form such as a private limited company or a company, you can borrow an amount from the bank that you use as starting capital, for example, to buy material with. The banks have different credit formulas for starting entrepreneurs.

To be eligible for a loan, most banks ask you to submit a detailed business plan. You will also need a certain amount of own resources that you can invest in your business. You can also apply for loans even through guarantors.

Help from family, friends or acquaintances

If you do not have sufficient resources of your own to get a loan, you may be able to appeal to family, friends or acquaintances. Maybe you can involve people from your area, the so-called ‘Family, Friends & Fools’, in your project. This can be done, for example, by making them a co-shareholder: in this way, they become the co-owner of your company and contribute to their own capital contribution.

Another possibility is that they lend you an amount, which increases your own capital contribution. The government stimulates such loans and gives them a tax reduction through the ‘Win-win loan’ system.

Venture capital

The bank may not give you a loan because the risk is too high and there are not enough guarantees. This is possible, for example, if you start with a highly innovative or risky company.

In such a case, you can look for venture capital. The brochure “You are looking for venture capital?” from the Agency for Innovation and Entrepreneurship gives you an overview of the risk capital offer in Flanders.

You can also turn to the government for help. This assistance can take the form of capital participation (shares), a guarantee or a loan.

Help from the government

The government helps starting entrepreneurs with subsidies and support measures. You can find an overview of all subsidies and support measures in the Grant Database of the Agency for Innovation and Entrepreneurship. Through the SME portfolio, the Flemish government offers support to small and medium-sized companies that want to invest in training, advice, knowledge and international business.

The government also offers support by offering affordable loans. As such, it is easier for entrepreneurs to obtain other financings with such cheap loans.

There are also municipalities and cities that try to promote entrepreneurship with subsidies. It is worth checking whether your municipality does that too.

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