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Category Archives: Finance

Hire Debt Collection Experts

When the business is developing, it will be better to have a debt collection firm for determining bad debt issues. This is because these professional have the appropriate labor and assets (and even equipments) to focus on the collection of your business. Meanwhile, you can boost the utilization of your own assets to proceed with your business operations and productions. It spares you time and cash on as the debt collection company can help for nominal charges, wiping out the need to pay separate individuals who will simply see on collecting debt from your clients.

The method of debt collection from clients varies from business to business. Some would hold up between 90 to around 120 days while others keep waiting for a year. Do remember that the longer you wait, the lower will be the chances of debt collection.

A business may encounter such clients who will not respond to the first notice. Often these clients do not react as they mostly do not have the ability to pay or they do not have any intention of paying. There will additionally be times when clients simply don’t respond as they just wish to pay whenever it is convenient for them. An alternate issue of businesses is that the clients change their addresses without prior notice. It simply becomes difficult for businesses to find such people.

Then there will be clients who complain a lot. They are quite difficult to manage and more often, they even deplete assets and time. There are additionally clients who just deny obligation regarding a request they have made. These things indicate the more losses of business.

Eliminate Your Debts

Arrange Your Funds

With list in hand, set aside enough money to cover the minimum payments on each debt. With the funds you have remaining, apply an additional payment amount to the debt that is on the top of your list, in other words, make two payments. If the minimum payment is too steep and you do not have enough funds for making an additional payment, move down your list to debt that you can afford to make an additional payment on.

Yes, you could go ahead and apply your remaining funds to the remaining balance on the debt that you have on the top of your list, however, our goal is to pay off your debts, not pay them down. This will all become clearer a little later on.

Set’ em Up and Knock’ em Down

Once you have started this plan, keep going until you have the first debt completely paid off. When it is gone, you can take the money from that payment you no longer have and apply it to the next debt on your list. If you had to skip the top debt, go back and see if you now have enough to be able to make two payments. Continue paying off your debts in this manner until you have completely cleared your list. Before long, you will have accomplished what you initially thought would be impossible, you have eliminated your debts.

Does this plan sound familiar? It is commonly referred to as the “debt snowball”. No, I am not saying this little slice of genius is my creation. I am simply saying that it is the best way to eliminate your debts without causing, even more, financial hardships. Just keep in mind that if you are having a hard time making even the minimum payments, you will have to either find an extra source of income to initiate this plan, or look for financial counseling to help via alternative methods.

Some Benefits of Payday Loans

No Strict Qualifications

Payday loans are easy to qualify for. Even if you have a bad credit score, you can qualify. All you need to do is let the loan provider know that you have a job and that you make enough money each month to pay back the loan. If you meet these qualifications, the provider will grant the loan. On the other hand, other types of loan require a lot of time consuming background checks before you get access to the loan amount. In some cases, the background checks take weeks to complete. As a result, you have to wait for a few weeks before getting the funds in your account.

No Cash Advance Limits

If you can get a payday loan, what you can do is get cash quickly that you can spend on whatever you want. On the other hand, with a credit card, the bank won’t allow you to get the cash and spend it on whatever you want. You can use the credit card online; however, if you get the cash, you will be charged a very high rate of interest. Moreover, you can’t get the same amount in cash that you can spend to buy stuff online. For instance, with some cards that have an online spending limit of $10,000, you can only get $2,000 in cash through an ATM machine.

Flexibility

Flexibility of a payday loan is another advantage that you can get. You won’t have any restriction as to where you can spend the money. On the other hand, with other kinds of credit, you have some restrictions to consider. For instance, if you go for a car loan or mortgage, you can only spend it on a car or a house. You can’t spend that money to buy other things you may need to do your routine work. You are bound to spend the money on either a house or a car.

Business Credit Cards

Some business owners take matters into their own hands by funding these expenses from their personal stash. However, using personal credit cards for business ventures is a risky-business since you assume total liability. If your company, God forbid, is ever sued or goes under, you risk losing your personal possessions and the good credit rating that took you years to build.

Now what if there was a way to free up some of that needed money you are currently using to support your business, by matching some of your expenses with items your business is already buying on a regular basis? Well, there is and it is in the form of business credit cards.

In other words, if you dish out $500 cash each week on realty supplies to make repairs on your properties, but now instead you make those same purchases using business credit cards for just one month, that would temporarily free up $2000 cash from your usual operating budget.

Of course, you are responsible to pay the balances on any business credit cards you receive, but that would be over a period of time giving you enough occasion to make a profit from the $2000 utilized on the business credit cards before the first payment is due. Are you seeing how having business credit is to your advantage? Let’s go a little further.

Business credit cards are a pretty darn quick way to get resources for short-term needs and at the same time they can increase your business’s purchasing power. But it has to be used economically and not to go all out on spending sprees just because it is available.

Other advantages include:

• Business owners with a limited credit file or credit history can apply without providing the stringent requirements of traditional banks.

• It is much easier to make purchases online and make cash withdrawals from these credit lines.

• Bookkeeping becomes simplified with the use of monthly statements and year-end statements to track expenses and pay taxes.

• Unlike installment loans, business credit cards offer discounts and rewards that can be used toward air travel and the like.

• Business credit builds credit. By paying on time and paying more than the monthly minimum fee, incentivizes lenders to increase credit limits and lower interest rates.

Drowning In Debt

Lesser are the loans to service

As you would have experienced, keeping track of several loans and trying to pay various bills by the due date is a tedious affair. Even when you have to ability to service all your debts, it is easy to miss payments when the number is large. And within no time it can balloon into a gigantic problem. When you consolidate all your debts into one or two, you get a much better perspective of your financial picture and your debt problems appear much less alarming.

Lesser is the interest outflow

Different debts carry different rates. Also, there is the additional penal interest whenever you default. When you take a single loan to pay off multiple debts, the interest payout on this new loan is almost surely lower than the sum total of interests on many individuals loans. This is a double bonanza. One, your monthly payout reduces. Two, lesser payout means more money in hand, which can be helpful in accelerating your debt reduction. So within a short period of time you will see a rapid decline in your liabilities.

Lesser is the time pressure

One of the key aspects of too many debts is too many missed payments. Naturally, therefore, you are under immense pressure of these numerous unpaid bills. And, despite your good intentions, you may have no means to pay them all off at one go. What if you get an opportunity to repay the overdue amount in instalments? Combining debts comes to your rescue by staggering these outstanding payments over a longer time frame. With the pressure off, you start rebuilding your life with a lot more peace of mind.

Lesser is the harassment

Many debts means many forgotten bills. And many unpaid debts means many unhappy lenders. Many unhappy lenders means many foreclosure notices and many threatening phone calls. One or two creditors, post consolidation, means lesser chances of not remembering your due dates. No delays means no more harassment.

Merchant Accounts

The various pros merchants services offer

1. Increased sales: Yes, this is right, as credit card orders are these days are larger in number than check & cash orders.

2. Faster checkout: It speeds up the checkout line because accepting credit card payment is instant and easy.

3. Cheaper than cash: It is cheaper to accept cards due to the huge order amounts.

4. Security: Dealing with cash needs more security, as the risk involved is high. Dealing with heavy amount can lead to troubles and there is also the possibility of employees giving out the wrong change amount.

5. More choices: The more payment options you offer to the customers, the more you decrease the probability of losing the sale.

The limited cons

1. Cost: Accepting credit cards involves cost similar to every other cost the business incurs. A good approach is taking it as a cost of doing business.

2. Fraud: Degree of internet fraud or risk is possible to some extent. However, such possibilities are extremely rare.

3. Charge backs: It is important to abide by the rules of credit card company’s rule. In this way, consumers are more safe when paying with card and win against the merchants while disputing a charge.

Which businesses are classified as high risk?

When the credit card industry realizes that a particular business is high risk, they conclude that the business model poses higher level of risk as compared to the traditional business. It is important to ensure that the payment processing account is well established and doing business will bring profits to the business as well as the merchant service providing company.

Here, the processing company has to manage the risk and reward, the merchant needs to be fully equipped to do business without going through over inflated charges. As understood, with any service, few companies charge unfair fees and provide incompatible services; hence, it is important to go for the best business company. High risk is involved in companies that are:

1. Involved in morally ambiguous industries
2. Process card-not present transactions
3. Sell products and services to international countries
4. Use risky sales methods
5. Transacts high average dollar amount

High Rate Loans

Here are the reasons:

  1. As a business model, it is proven to be resilient and profitable. Diverse portfolio, small exposure, short term nature of the loan and catering to a sector few traditional lenders touch.
  2. With Americans’ incomes not keeping pace with inflation, and increasing illegal immigration, there is growing need for Payday type loans as more and more people live from paycheck to paycheck.
  3. While there is State level regulation on Payday practices, this form of lending is highly unregulated and as yet unchecked in any real form by Federal government. And State supervision is spotty. So no wonder new Payday type lenders are cropping up all over.
  4. Because of small loans and not much oversight, entry barriers are low.

PROS AND CONS

Pros:

  1. Easy terms, no collateral
  2. Negative credit history is not an obstacle
  3. Very local
  4. Caters to a segment of population which has no other alternatives to cover their expenditures or budgets

Cons:

  1. Very high rates of interest (although many States have Usury laws, so Payday lenders skirt it by calling these “fees” or “service charges”
  2. Addictive. Since money is easily available, there is less incentive to save and forgo certain expenditures
  3. Does not improve borrower’s credit history–whereas getting credit from a traditional source, even a store, and paying it down regularly will actually improve your credit rating and open up other doors to borrowing

Payment Gateway

While the whole process of swiping the card takes not more than a few seconds, there are quite a few factors which affect the money transfer process. So choosing a proper processor is a must to make the complete process secure and fast. It should also be hassle free without any hidden charges or any other fees. Payment processing speed and security could be a deal breaker with the customer if it is not up to the mark. Accepting credit card is not enough, you should also look for a merchant account services. A few payment processing companies have a high merchant account rate but provide mediocre merchant services.

A proper Credit Card processor provides support to every aspect of your business starting from merchant account processing by providing you with merchant processing account. The processing of credit cards and debit cards with a fast response from both the front-end and backend is the key to a proper business merchant processing. The charges may vary according to the payment gateway, but you can find yourself relieved of the hassles you otherwise had to take. They take care of the details of cards along many devices like mobile device, POS, etc., and verify the data according the card holders name. The transfer request is sent almost immediately for crediting the same amount to the merchant’s account.

These companies are already developing their commitment towards the security of transfers. Even the small businesses are relying more on the cashless transaction, thus the small business merchant support is also being provided by many such processors. They accept credit card payments and process them taking utmost care to provide security and speed.

To assure the merchant of the security and speed of the processing, the companies are engaging their efforts in making the payment gateway more encrypted. Thus any chances of forgery or hacking are obliterated. With the latest 128-bit SSL algorithm, only the merchant and customer have the right to know the required part of the transaction, I. e. PIN number or identification number on the part of customer and another PIN number for the merchant. This classified information provide the base of the secure mode of payment.

Stuck in Debt Trap

We continually hear these statements: you deserve the best, shop till you drop, just charge it, treat yourself, pay later. What sounds like a good idea ends up becoming a burden when the credit card statements come and there isn’t enough in our bank account to cover the minimum amount.

Have you ever considered how much money you spend on stuff you don’t really need? There is a huge difference between needs and wants. We might really believe that we need something when in fact, we really don’t need it, we just want it. Here is a quick list of some costly wants:

  • COFFEE – If you buy 2 coffees a day costing $1.60 – in one year you will spend $1,168.00.
  • EATING OUT – If you eat out at a restaurant once a week and spend $80.00 – in one year you will spend $4,160.
  • TAKE OUT – If you bring home food once a week and spend $40 – in one year you will spend $2,080.
  • CLOTHING – If you buy 1 new item of clothing each week and spend $50 – in one year you will spend $2,600.
  • GROCERIES – If you buy extra snacks, sweets and treats each week when you buy groceries and spend $40 – in one year you will spend $2,080.

If you total all these things, they come to over $12,000! Yikes. This could buy a car, a down payment on a house or even be saved towards the future.

Hiring Debt Collector

Every state has its own regulations that cover how debt collection is done and how the agencies work. It is important to ensure that you select a firm that adheres to Fair Debt Collection Practices Act. Moreover, the firm should be bonded and licensed to work in the locality.

Sometimes the firms use very uncouth means to collect the debts. This may raise legal cases if the debtor feels that the agency has acted in bad faith. The insurance ensures that you are not held liable for hiring the agency to collect the debts. Ensure you pick a firm that has a valid errors and omission insurance. It will act as your protection if you are dragged to court.

Once you have a list of a few companies, take time to compare their costs. Different agencies use different formulas to come up with their rates. Some charge a small flat rate mostly associated with pre-collection activities. You are then charged a contingency fee that is part of the amount collected. The charge is about 20% to 30% of the amount collected. Pick a company that offers a no collection no fee model.

Some debtors tend to run away with your cash and ignore your calls. Some even skip town. If this is your situation, ask if the agency you are using has a skip tracing service. This service enables the debt collector track the defaulting client even when they have not left any forwarding address.

Just remember that you shall not receive all the cash once you have hired a debt collection agency. For this reason, it is advisable to exhaust all of the other means of collecting debt before asking for help. However, if none of the other methods work, hire a firm that will collect the debts right away.