Category: Finance & Capital

For investors, taking the plunge to invest money in another company can be very risky. Thankfully there are many ways to mitigate against this risk. This includes doing extensive online research into the company, and performing a credit check. This will reveal abundant information about their company structure and payment history. Why not look up free credit report at Duedil.com to begin your search?

The Check List for Risk

There are many readily available and free ways to access company information online. There isn’t anything stopping an investor from ascertaining a company’s financial suitability through their own research, without needing to employ an IFA or third party. Browsing reputable online finance portals will yield important information about prominent FTSE companies as well as enabling you to do homework on smaller enterprises.

The Annual Report 

This can normally be provided by online financial services and databases. Before the eyes glaze over with all of the financial-ese, look specifically for three main financial components:

• Cash Flow Statement
• Balance Sheet
• Income Statement

These allow the potential investor to compare company growth over the past three years and see if the business has progressed at all. Investigate how they have reacted financially to a recent takeover or external economic pressures.

A potential investor can see from these documents, how the company is spending their cash and whether this takes the form of profits, sale of goods or new investment money going into the company. From the balance sheet, one can get a good idea of the current state of the company and where they are going in the future.

Comprehensive Credit Checks

The level of risk should determine how deep one needs to dig into a company’s background. For an investment with a smaller financial risk, less time should be spent on a credit check. Conversely, a company posing a significantly higher risk, deserves a comprehensive credit check.

Credit checks vary in detail and can consist of:

• Company and director checks: This includes credit risk scores for both directors and the principal shareholders.
• Investigative reports: This is primarily for large risk investments. A detailed and forensic investigation is conducted. This includes detailed financial information about company structure and operations.

Along with one’s own research, a credit check can be one of the most insightful and comprehensive ways of assessing risk when investing in an unknown company.

Article Contributed by Kristen Bradley

Almost everyone has heard of flash mobs. Large groups of people gather in a public space and perform a dance routine or participate in some other form of celebration for seemingly no reason other than to attract attention. Cash mobs, however, are a slightly newer trend. Like flash mobs, they involve the gathering of a crowd in a public place. However, unlike in a flash mob, these people are there for a very specific and dedicated reason. The ultimate goal of a flash mob is to support a local business by buying items from a certain local business in order to stimulate the local economy.

History of Cash Mobs

According to Public Radio International, the man responsible for inventing this concept is named Chris Smith. Smith is an engineer from Buffalo, New York and organized the first ever event of this kind at a local wine shop in Buffalo in August of 2011. More than one hundred people showed up to the event to purchase wine and support the business. Another group from Cleveland, Ohio also claims the title of inventor for this type of event. It organized a mob in which over 40 people shopped at a local bookstore. Over the last year, the “rules” by which these events are organized have circulated in various blogs.

How the Event is Organized

Generally, the organizers of these events use blogs and social media websites to announce the event and attract potential participants. The people are instructed to show up between certain hours and make a purchase at the store that is getting promoted. Sometimes more than one business is mobbed during the event. There are usually after parties for participants who attended the cash mob so members of the community can meet one another and plan future cash mob events. Some cash mobs have a minimum suggested purchase price, but generally participants are told to spend what they can afford. It is commonly suggested that they think of gifts to purchase for loved ones, or buy themselves an item that they would not usually think of purchasing.

This type of event does several things for the business. First, it helps it make a profit from the purchases during the mob. Second, it helps establish clients who may return to make new purchases and recommend the store to their friends. Third, it gets the business media attention since oftentimes; these events are announced in local papers and online.

Cash mobs are a new and exciting way to promote local business and stimulate the local economy. One does not have to spend all that much to get involved, and the events are generally a fun experience. Those who want to learn more should explore the websites and blogs dedicated to these mob events. A good time is waiting right around the corner.

About the Author
Kristen Bradley is a principal for CashMob.com, leading promotions and marketing portal that allows users to find cash mobs near them while also learning about the phenomenon. Through her educational outreach, Kristen strives to help small businesses achieve financial success.

Contributed by Kelly Spors

Given all the business deductions available in 2011, there’s a decent chance you got a refund from Uncle Sam or are awaiting your refund. It’s often tempting to treat such tax refunds like gifts and splurge on things you want, whether it’s a vacation or the latest personal gadget. But the more responsible – and potentially lucrative – thing to do is to invest the money for your future. Chances are, your retirement account could use a little extra cushion these days.

By investing the refund money today, you can benefit from compounding returns – or the idea that you will generate earnings that over time will generate their own earnings, allowing your invested sum to grow exponentially.

Here’s a look at how investing your 2011 tax refund can pay off down the road:

Let’s say you received back from Uncle Sam $3,000, which is the average tax refund amount today, according to the Internal Revenue Service. You put that $3,000 in a broad mix of stock and bond mutual funds inside, say, a Roth IRA. (A nice advantage of the Roth is that, while you don’t get any upfront tax deduction, the money grows and can be withdrawn tax-free in retirement.)

That $3,000 would grow to about $9,500 after 20 years, assuming a 6% average annualized rate of return – or more than triple its current value. Now let’s say you decide to invest every tax refund you get for the next 20 years, and, for simplicity’s sake, we’ll say you get $3,000 every year. You’ll have almost $117,000 in your Roth after those 20 years. That alone probably isn’t enough to fund the retirement of your dreams, but it’s a nice extra cushion. And it’s certainly enough to help you pay for those extra things in retirement you may dream about, whether it’s a trip around the world or a timeshare on the beach.

Of course, there are many other responsible ways business owners could spend their tax refunds, including paying down debt or investing it back in the business. So if you’re unsure what’s right for you, it’s worth consulting your accountant or financial advisor.

About the Author:

Kelly Spors writes for RothIRA.com, a leading retirement and Roth IRA resource. A former Wall Street Journal reporter, Kelly has written about small business and personal finance for The New York Times, Entrepreneur magazine, Yahoo! and SmallBizTrends.com.

Article Contributed by Melinda Boston

Every day 33,000 personal and business loan requests are rejected by the banks (courtesy of SBA report). Small business owner then search for private merchant companies in order to fulfill their financial requirement.

Still, many face rejection. Common and hasty plans create problems in acquiring loans. Every business owner should complete his research before applying for any business loan application. Whether it is government organization, bank or any private company, the first and foremost thing that you should consider is that you should:

Know Your Credit Scores

Before application process begins you need to know where you stand in terms of your credit score. In terms of banks, your credit history makes or breaks your loan application. Hence, keep a check on it, before you move forward with your loan application process.

Read the Terms Carefully

Before signing the approval form or the application form, always read the terms and conditions carefully. Due to misjudgment, many small business owners end up in debt. Before you sign any agreement, it is important to read the term and condition, familiarizing yourself with every point. Questions should also be asked incase anything remains unclear.

Interest Rates

Some financial companies often change their interest rates. Sign on one rate when you acquire loan and make the contract in accordance with one constant interest rate. Do not sign under fluctuating rates as this can cause many problems in your small business’s financial dealings.

Research for Suitable Loan Programs

Even before you enter any private company’s doors, make sure it is the right one. There are many company’s in the market offering different interest rates, make sure you choose the one that suits your requirements and your business.

Essential Business Plan

Make a clear and detailed business plan which should clearly specify your goals. Money lenders always want to know more about the business before they fulfill your financial requirement and before they lend you any cash.

Small Business Experts allow you to surpass every bank with a vast emphasis on fast cash flow, allowing you to increase working capital.

The market is loaded with many Small Business Loan providers. Finding the right one for your business might be a difficult task as there are many companies offering similar hassle free application process. Do you r homework and complete your research before moving forward.

If you’re an entrepreneur, there’s a good chance you have no problem coming up with new business ideas, right? However, coming up with money to make those ideas a reality isn’t always so easy!

So what’s the best way to fund your new venture? Well there are pros and cons behind each route. Let’s talk about three of the most popular options.

1. Angel/Venture Capital

Sorry if this bursts your bubble, but right off the bat it’s important to understand that getting venture capital is highly unlikely for your business. It’s generally only appropriate for established startups that have already made significant progress and have the potential to become a company with at least a $100 million valuation, if given additional funding. VC firms are not interested in mom and pop sized businesses.

Even if your business fits those criteria, good luck getting the money! The competition is as cutthroat as American Idol: hundreds of thousands try out for it, but only a few make the cut to be on the show. Even if you get that far, VC firms are notorious for only giving companies enough money to last for 6-12 months. Then it’s another round of financing, where the founders’ equity gets diluted away even further. Weigh the pros and cons before you attempt to go down this path.

Meanwhile, angel funding can sort of be thought of as “mini” venture capital; it comes in much smaller amounts, it’s easier to get, and sometimes you don’t even need an established company to get it. As someone who has personally been an angel investor (in a company which eventually went public) my advice is to bring your “A” game, because when wooing angel investors, they’re probably basing their decision on you (management) more than anything else.

2. Traditional loans and credit cards

If you’re only looking for a few thousand dollars, then this might be the route you want to go. Assuming you have good credit, you can probably borrow up to $10-20k on an unsecured basis. For higher amounts, you will likely need to have some sort of collateral.

The biggest drawback with going this route is that due to the state of the economy, lending requirements have tightened dramatically. It’s no longer easy to get approved for a credit card and even if you do, the credit limit might be less than you need. For example, when I opened my Ink Cash Visa from Chase (for my business) the credit limit was significantly less than the first business credit card I opened before the recession.

The other drawback with going this route is that you will be required to make a personal guarantee. The means if your business idea doesn’t work out, you will have to personally pay back the debt. Contrast that to angel and venture capital, where you will not be obligated to pay back the money if your business fails.

3. Borrowing from family and friends

Getting a loan from family is a very common way for entrepreneurs to fund their business. But even if you know someone who is willing to lend you the money, you might not want to take it. Why? Because money has a tendency to bring out the worst in people… it causes arguments and disputes.

Sure, getting into a dispute with a bank or credit card company is bad, but it’s sure a lot worse to fight with someone you love. Because new businesses have such a high failure rate (we all know it comes with the territory) the truth is that by borrowing money from a friend or family member, you may be jeopardizing that relationship.

Conclusion? You need to think twice before considering. If you think of doing it, make sure both parties are fully aware of the risks. Also, make sure you document the loan properly.

Mike Dolen has been an entrepreneur as long as he can remember. From running an eBay business as a teenager, to his latest venture of providing reviews to consumers at CreditCardForum.