Leasing (2017 Update)

Leasing (2017 Update)

Advice, Business, Finance, Moneylender, News


A host of innovations characterizes the modern market economy. This includes new forms of business, new forms of business practices and organizations. In addition to franchising, factoring, forfeiting, leasing too is a market innovation. The company or entrepreneur must possess certain means to making a profit. It is enough to dispose of the right to use the asset over time.

What Leasing Means

Leasing arrangements enables easier, faster and cheaper ways of getting the equipment. This helps particularly in terms of the lack of own capital, lack of favorable bank loans, non-functioning of the rule of law, as well as due to tax incentives. Users of these lease arrangements provide financing for the purchase of the right of use of the leased object. This right lasts to the expiration of the contract. Additionally, the owner transfers the right of ownership to the user only after payment of the last installment.

Leasing can be defined as a written agreement between the two parties: a leasing company (lessor) and user equipment (lessee). In this transaction, the lessor purchases the equipment from the supplier and provides the use of the lessee for a limited period. In return, the lessee is obliged to return the provider performs periodic payments under the conditions defined in the contract. Thus, the lessor retains legal ownership of the leased asset, while the lessee acquires the economic ownership.

Types of Leasing

Financial leasing is the conclusion of long-term contracts in which the user of leasing agrees to make payments so that the total amount of each installment exceed the amount of the purchase price on the matter, so-called full-pay-out contract. In addition, the term of the lease is 70-90% of the expected lifetime of these things, so it is logical that the data point after the expiry of this deadline can not be leased to someone else (because it is worth much less). It is always the fact that the mobile-consumable things are in the game. This includes equipment, vehicles, machinery, computers. User bears all the costs and risks associated with the equipment. Cancellation of such a contract is not possible.

Operational leasing is short-term and cancellable at any time. Contract duration is shorter than the economic life date equipment, and the fee is less than the value of the equipment. All costs and risks borne by the provider. This includes the risk of accidental destruction of things, obsolescence, insurance costs, maintenance, supply of spare parts, personnel training, technical assistance. With operating lease, after expiration of the lease term, the customer returns the leased asset to the lessor.

Leasing in Practice

In a direct lease (leasing or manufacturers), the lessor is also the producer of the things that is given on lease. For example, a car manufacturer gives to lease a car directly to a citizen or a company. This lease is very similar to the sale of the loan, except that here usually does not come until the transfer of ownership rights over such things.

In the indirect lease the lessor is not at the same time the manufacturer of these things. The lessor is instead a leasing company. This can be a bank or a company that specializes in providing leases. They conclude two contracts: one with the manufacturer, and one with the lessee.

Leasing of movable property subject to the lease has usually equipment. This can be a plant lease, where the lease provide whole plant. Equipment leasing is the lease of individual equipment. The Second Hand Leasing is the lease gives thing that has already been given on lease, and is returned after the deadline provider (of course, provided that this thing continues to have practical value, ie. It can be used). Leasing immovable property is a situation when the lease give the real estate, building.

For more information on Leasing and how you can finance your own lease, feel free to visit the best licensed moneylender Singapore, or alternatively, give us a call.

Alternative to Loans (2017 Update)

Alternative to Loans (2017 Update)

Advice, Business, Current Affairs, Finance, Moneylender, News

Alternatives To High-Cost Loans

Borrowing can be expensive although it is not supposed to be that costly. When your loan is approved, the first thing to do is how to manage your interest rate and processing fees by getting them as low as possible. To achieve this, chose wisely between the different types of loan.
Sometimes a high-interest rate loan may be the only option available for you, but you need to look for less expensive ways to get the loan. Such strategies will really help you to make the debt burden more affordable. These types of loan can be a good alternative to high-cost loans.

Signature Loans

These types of loans do not require collaterals for approval, hence the name signature loans. They come with low-interest rates which are often fixed throughout the repayment periods. So you’ll not be surprised with increasing payments.
They are also cheaper than credit cards, title loans, and payday loans. Their processing fees are also low or even non-existent. The beauty of these loans is that you can borrow any amount in one lump sum to pay off your obligations. You’ll then amortize your loan with monthly installments until it is paid off.
Besides, you may get well financially at any time before you finish paying off the debt, you can still pay the remaining balance in a single installment without a penalty. Good credit score and sufficient amount of income is a requirement before you’re approved to get these loans.

Person-to-Person Loans

Person to person loans differs from personal loans in that you borrow from other individuals instead of banks or credit unions. These individuals can be family members, friends or strangers who lend through person-to-person websites.
These type of loan are not very strict on having a good credit score and sufficient amount of income. Although these type of loan are more relaxed, it’s good to take care of the relationships with your lender. So put it in writing to make sure everything work out well.

Balance Transfers

This loan is ideal for people with perfect credit scores. Balance transfers allow for low-interest rates on borrowings. However, you need to open a new account or maintain a checking account with your bank. This option works best for short term loan.
In case you are unable to pay your loan within the promotional period, you lose all the benefits which turn into high-interest debt. Therefore, if you intend to use balance transfers, watch out the length of the promotional period and any other fees that might wipe out all the benefits.

Home Equity

This type of loan is ideal when you have sufficient equity in your home. Remember your home serves as the guarantee of payment. But because a home equity locks your home until you pay off the loan, you risk losing your home in the event you can afford to make the regular payments towards the loan. This risk is not worth taking! Instead, unsecured loans like the ones discussed above can work better.
On top of this, you will have to pay closing costs for your home equity loan. Such costs may end up making the overall debt more expensive pushing you into serious financial crisis. Before borrowing any of these loans, sit down and review both the benefit and the drawbacks to make sure you save as much as you can in paying off your debts.

For more information on loan, feel free to visit the top licensed moneylender Singapore, or alternatively, give us a call.

Student Loans (2017 Update)

Student Loans (2017 Update)

Finance, Moneylender, News

Student Loans

For most young people, their ultimate dream is to go through higher education. This allows them to land a decent career that will guarantee them financial independence. Unfortunately not all are able to achieve this because of financial constraints and this is where students’ loans come in. Most governments and private financial institutions have schemes through which they finance the students’ higher education. They then demand payment after they have graduated and landed jobs. If the Government advances these loans, then they attract very low interest rates.

Conditions for Student Loans

Before qualifying for a students’ loan, one will need to have proof that they have admitted into a college.  They also require documents such as a certified admission letter and fees structure to support the amount being sought. Other requirements include personal identification documents, proof of physical address, parents’ income statement. This is to prove that you really need the money and prove your guarantors. The number of guarantors varies from one institution to another. They should be people who can bear the burden on your behalf should you default on paying the loan.

In some countries, students from needy backgrounds and single parent families are usually given a grant over and above the loan. This is especially so in developing countries where education levels are still low and the respective governments aim at keeping as many students as possible in colleges until they graduate.

Pros and Cons of Student Loans

There are still no clear and effective ways of recovering student loans and most of them usually go unpaid. Some students will for example graduate and move to work and live in a different country. This means they are untraceable. If they do not decide to pay back the loan at will, it definitely becomes a bad debt. Most students do not give correct information about their parents’ status and physical address, and even if they do, physical address is bound to change. This makes it very difficult for the lenders to trace them in attempts to recover the borrowed money.

Being young and ambitious, most students are prone to misusing the loaned money by excessive partying and clubbing, drinking, and some even go to the extent of getting into drug abuse. Because of such awful spending habits, they are also a target to illegal money lenders who promise quick money but end up blackmailing them. Students are therefore advised to be good money managers and make do with the little they have, other than ruining their lives out of greed.

Student Loans Repayment

After completing their studies, students have different options that they can adopt to repay their loans. The first one is making bulk payments which will save them from accrued interest. However, very few can afford to do this since it requires getting the whole amount at once. The second option is paying the interest during the grace period. Following which, then start paying the loan amount later again to prevent the interest from accumulating. The third and most practical option is attaching your monthly remittance to your income. This will ensure you do not give it a second thought and with time, you will be comfortable with deduction in your income.

For more information of student loans, please visit the Best Licensed Moneylender Singapore, where our experienced staff can provide you with sound advice and information. Alternatively, you may contact us by dropping us a message.

Working Capital Loan (2017 Update)

Working Capital Loan (2017 Update)

Advice, Business, Current Affairs, Finance, Moneylender, News, Uncategorized

Working Capital Loan

Any business whether big or small, struggling or efficient requires a working capital. This amount depends on the strength of the business. This too brings us to the question: What is working capital and why do business require it? What is a working capital loan?

Net Working Capital

Net Working capital is defined as the excess of current assets over current liability. This excludes any bank finance. Both the promoters and a working capital loan funds this new working capital.

Just to make things clearer, any asset on the balance sheet which could be converted into cash in one year or one operating cycle is classifies it as a current asset. Also, any liability on the balance sheet which is repayable in a year or one operating cycle is classified as a current liability. For example, short term bank deposit is a current asset and a working capital loan is a current liability.

Net Working Capital is mathematically defined as capital + long term loans – fixed assets – non current assets – intangibles. Net working capital is a measure of the promoters stake in day to day operations of the business. It also gives an idea about diversion of funds by the unit.

Uses of Working Capital Loan

During day to day operations of the unit blocks up some amount of funds. The uses for this fund include stocks, raw materials, semi finished goods, consumables and receivables. Working capital is the monetization of these current assets by taking a working capital loan against pledged to the debtors of these assets.

Not all current assets can be pledged to debtors and working capital loan cannot be availed against all assets. The bank may provide working capital loan based on its assessment of the requirements of the unit. Working capital loan may carry a fixed or floating rate of interest and is generally repayable in one calendar year or one operating cycle. A bank may subject a loan to restrictive covenants as per its assessment like ceiling on market credit, ceiling in new investments and others.

Almost every company requires a capital loan as many promoters are unwilling to reduce their stake in the company by bringing in equity infusion from new partners. Also, the interest rate for working capital loans is generally less than the rate at which credit is available in the market.

Advantages and Disadvantages

A working capital loan enables a company to monetize its assets at a competitive rate. At the same time, it provides an avenue to increase its business. Though it has many advantages there are also some downsides. For example, irrespective of the limit, one generally pledges all current assets to the bank. Also, the bank may impose certain conditions on the management in running the business. These conditions may interfere in day to day business decisions. In the worse cases, the bank may even takeover the management of the unit.

You may find out more about working capital loans from a Licensed Moneylender. A Licensed Moneylender will be able to provide you with relevant advice, so do not hesitate to drop us a message!