You know how they say change is the only constant thing in life? Well, that might not be completely true. It is also a constant thing in life that “life will surely happen.”
At times, life’s happenings are favourable. At other times, life’s happenings are unfavourable. Sometimes, life’s unpleasant happenings could bring series of events that end up putting a dent on your credit worthiness.
The point is that, while poor financial decisions could bring bad credit worthiness, certain people don’t have to make the worst financial decisions to find themselves in a position of poor credit worthiness. Unfortunately, the world’s financial system is not set up in a way that we can differentiate between those who did and didn’t make bad financial decisions to know who deserves financial assistance for their business.
The reality of things is that you’d simply find it extremely difficult to secure loans with a bad credit.
If you live in a house of your own or have a landed property, then you might just be sleeping on the money you need. Several lenders out there understand the happenings of life. They have systems that could qualify you to get a loan despite bad credit score. They would just require some form of assurance from you.
An asset you own could be that assurance. In this case, asset is anything that you can convert to cash. So in addition to a house and landed properties, automobiles, cash accounts, investments, insurance policies, machinery/equipment among other things count as assets against which you can get loans irrespective of your credit worthiness.
Typically, when you apply for a loan from such lenders, they’ll evaluate your asset to know how much it’s worth. The value of your asset will be a big determinant of the amount of loan you can get. In most cases, that amount will be below the market value your asset.
When taking this route, you need to have find out what your asset is worth beforehand so you can negotiate the best term. Some lenders will intentionally undervalue your asset just to make you qualify for a lesser amount of loan. But doing your homework beforehand will put you in the know and hence, be able to speak up to get the best deal.
Small Business Lenders
If you have a registered business, then you might be able to secure loans from small business lenders. Most of them came into business after noticing the limitations of the traditional financial system. They are here to make it easier for small businesses to gain access to financing.
You would need to do your own research to find out what they require. In general, though, small business lenders could offer loans against assets, cash flow, future cash flow, receivables and so on.
Cooperatives are independent associations that are formed to help members meeting mutual economic cultural and social needs. Cooperatives are run democratically by members of the associations.
The advantages of getting a loan through a cooperative include, but not limited to low interest rates, and flexible repayment plans.
In fact, most cooperatives are set up in a way that you’d earn bonuses even if you borrow because they usually share profit among members, which you have to be before you can even qualify for a loan. Typically, you’d join the cooperative society and save money with them consistently for a number of months – usually six months. After a probationary period, you will be able to borrow up to double your savings.
Related: 5 Small Business Loan Ideas
Friends and Family
Statistics have it that more than 50% of business owners get funding help from friends and families at some point in time. What this means is that your friends and families could be willing to help you get your business in motion more than you think they were.
And if any class of people would care less about your credit worthiness – or the lack thereof –, it would be your friends and families. All you just need to do is ask. The worst-case scenario would be to get a NO.
To increase your chances of securing financing from friends and relatives, you should consider offering them something in return. Don’t tell them to give you money or just borrow you money. Ask them to invest, which means they’d expect something back in addition to their capital. Don’t be greedy about this. Always bear in mind that 1% of a $1 million company is better than 100% of none.
(Infographic) The Financial Advice Millennials And Gen Zers Want To Know
Having a grasp on your financials is tricky, but it’s crucial if you want to be successful. And that starts with getting the right advice.
Whether it’s saving for retirement or paying off credit card debt, money management can be a challenge. Of course, different people have different concerns – and that often comes with age. While a 60-something baby boomer might be organising their savings for retirement, your 20-something millennial might be focused on paying off student loans.
In a recent study, financial intelligence company Comet surveyed more than 1 000 people to uncover the top financial concerns of various age groups, as well as the financial advice millennials and Gen Zers want to know and what they hear instead.
Overall, saving for retirement was the top concern across all age groups, with saving for an emergency and affording monthly bills following in second and third. However, it’s no wonder these are some of the most pressing worries – according to the research, 23 percent of people admit they don’t have a savings account, and 43 percent reported not being on track towards their retirement goals. Perhaps that’s because they didn’t hear the right advice growing up. At least that might be the case for Gen Zers and millennials.
According to the research, these young people want to learn things such as how the stock market works, how to manage an investment portfolio, how to invest in real estate and how to build credit. Instead, they’re simply told how to create a budget, save for retirement and pay credit card bills in full every month.
Having a grasp on your financials is tricky, but it’s crucial if you want to be successful and comfortable. To learn more, check out Comet’s infographic below.
This article was originally posted here on Entrepreneur.com.
14 Ways To Make Quick Cash On The Side
If you need money quickly, here are some solid ideas.
Need to make some fast money on the side, whether it’s to pay off a credit card or to make your rent?
Keep in mind, making quick side cash isn’t about making a lot of money or getting rich. It’s about getting a shot of capital to help tide you over and put something extra in your pocket. However, some of these side-income ideas can build up your wealth over time. There’s many ways to accomplish this: By participating in the gig economy, the sharing economy, online sales networks, passive income techniques and more.
If you’re looking to make extra money in a relatively short period of time, check out these 14 slides.
Take Advantage Of Financial Democracy Made Possible By The New Stock Exchanges
Why should financial democracy matter to entrepreneurs?
Because it creates a society able to afford products and services. Without it, even the innovative products and services that are entrepreneurs’ bread and butter will fail.
What is financial democracy, exactly?
It’s both the right and the ability of the (wo)man in the street and business people to make the decisions that affect their financial circumstances.
Financial democracy does not automatically follow political democracy. For almost 25 years after South Africa’s political transformation, the exclusiveness of our financial markets continued to deprive the vast majority of South Africans of the means to invest, save, and build wealth. South Africa has, therefore, never developed a retail stock exchange environment. So, it has deprived the majority of small and medium sized business of access to capital.
For entrepreneurs to truly flourish, they need a mechanism that easily and seamlessly connects the investor pool with every size of business. And, they need affordable ways to enter both the retail and institutional market.
In short, they need stock exchanges. Ones on which listing takes weeks rather than years, doesn’t break the bank for listing fees, and provides the shortest route to the largest possible potential investor base.
That’s not been possible in the stock exchange monopoly that existed for six decades. Now, it is.
We now have four new stock exchanges. The resulting competitive environment will significantly reduce the cost of listing – and the cost for investors of buying and selling shares.
Instead of restricting share trading to people or organisations who already have tens of thousands of rands to invest or millions to spend on listing, by licensing four new stock exchanges, the Financial Services Conduct Authority (FSCA, formerly the FSB) has recognised that most financial decisions do not call for high levels of education.
Most people know how to spend their own grocery money. Most know that it’s better to keep their R1 000 monthly income in a coffee jar than spend R50 of it on bank account fees. People who can barely read and write are immensely skillful at manipulating air time deals to their advantage.
There is significant financial savvy in all social strata.
In the same way, although the mechanics of bookkeeping and accounting may be unfamiliar territory to many entrepreneurs, most have a clear understanding of the difference between profit and loss.
The FSCA has therefore enabled democratisation of the financial markets by enabling the broadest possible spectrum of entrepreneurs and investors to use stock exchanges to participate in and contribute to the economy – on their own rather than prescriptive terms.
How do you take strategic advantage of this democratisation?
- Base your business strategy on people’s instinct for making decisions in their own best interests. Trust financial decentralisation, such as one sees in crowd funding and in digital environments such as block chain, where people would far rather trust one another than institutions and governments. This is democracy innately at work in the financial environment and it’s accelerating organically as digital technologies give people more means and the confidence to help themselves – to information and opportunities. Ride the wave.
- Tap into people’s desire to innovate. Consumer organisations have proved that letting people interactively help them develop products is a powerful growth engine. Apply the principle by letting people grow your business by buying shares in it, giving you capital and themselves a platform on which to build wealth.
- Remember, the ultimate loyalty reward is equity.
Your financial democracy business plan
Look to list on an entrepreneurial stock exchange; one that was founded by entrepreneurs on entrepreneurial principles.
That means: A stock exchange that is already built on financial democracy and decentralisation. One that has, at its core, a single operational concept that keeps things simple for you, automatically gives you an immediate competitive advantage, and, ensures that no matter what your business needs in terms of attracting capital, the exchange can provide all the options in the same, consistent way.
What does such an exchange look like?
It has fintech capabilities. So:
It slashes your listing costs. It achieves this, among other things, by enabling you to populate an electronic prospectus, demonstrating your financial viability, and self publish.
It gives you control by having the granularity and agility to impose relevant governance right down to the individual investor. You get to decide the types and quantities of investors you want to attract. This also enables you to achieve black economic empowerment in perpetuity.
It leads the world by clearing and settling trades in T+0. No-one in the value chain has to hold large sums of money for days following a transaction. Small transactions become profitable. Investors don’t have to risk their life savings on a single large trade. A retail market is opened. An investment and savings culture is entrenched. The economy expands. Your business grows steadily.
It enables anywhere, any time trading via a mobile app that allows investors to see share value in real time. See economy expansion point above.
It integrates processes and procedures, simplifying them and ensuring rapid onboarding of issuers and, therefore, speed to market with new concepts and alignment with the digital economy.
It operates a principles-based regime. So:
It treats you, as an executive, with respect. It’s not prescriptive. It does not insist on excessive oversight, allowing the Companies Act to guide you to sustainability.
It does not attempt to squeeze your company into a pre-defined business or listings format. It recognises and works with your uniqueness.
It obviates the need for expensive specialist listings advisors.
It focuses on financial inclusion and access. So:
Shares can be bought and sold for no more than R1 000. See economy building point above.
The new world of stock exchanges is integrated, synergistic, holistic, organic, self-fulfilling
Decentralisation of financial control, democratisation of opportunity leads to a whole new economy. One in which, for instance, a taxi operator can finance a minibus through a company in which his purchase gives him shares. A single purchase gives him two benefits: a vehicle on which to found his business and a longer-term investment in shares that he can trade. The funding company gains liquidity through access to a wider base of investors while being able to control who buys and sells and the conditions on which trading takes place. Increasing black equity in business becomes an organic, natural, self-perpetuating process.
Everyone wins in a decentralised, democratised financial market. And it’s the stock exchanges that drive the process.
As an entrepreneur, can you afford to ignore the acceleration that listing could give your business growth?