Category Archives: Business Finance

The Buy to Let Business Model

The Buy to Let business model has attracted a lot of people in the recent years. This business model helps a person in owing a property over a period of time. A person can borrow money to buy a house which will be rented out.

Banks prefer this type of loans as they know that the house will be rented and rent can be used to pay the installments. Over a period of time, the owner can pay the whole amount of loan taken and can relieve himself from debt.

Thus, all the rents from that point of time are the profits earned by the owner. This Buy to Let business model helps a person in buying a property through the monthly rent. Thus, once the house is bought it becomes necessary for the owner to find good tenants. A bad tenant who can create payment issues thus, creating problems for the owner.

Balance of trade and payment

This term is a basis of an individual country’s economic position in respect to the others. Each country exports its surplus products, and likewise imports its deficit materials. The import- export ratio is crucial for getting down the balance of trade. Any discrepancy is equalized through other means like foreign aids or charities, depending on the country’s specific position.

Balance of payment is the sum-total of country’s doings in all manners of payments; secured and unsecured. Both liability and asset sides have to be balanced, and this is again done by aids or risk management.

These balance sheets give a crystal clear position of a country’s standing. Of course, a country will be in green if its exports exceed imports, and vice-versa. Sometimes, due to forging methods and other loopholes, the gap widens, and then the balancing item finds it tough to equalize matters. Exemplary analysts are needed for such balancing acts.

Essential Requirements for Finance Management

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Finance management involves planning the future of an individual or corporation to make sure cash flow is positive. The process also entails finding out risks involved and managing them.
For the individual level, finance managers tailor your expenses depending on your resources. If you have some surplus cash, you have to invest it to make up for the effects of inflation and taxation. Decisions made have to assist you to reach your financial goals.
For an organization, financial control and planning is essential for finance management. Financial planning will quantify the resources available and make appropriate plans on how and when to spend them. The financial control will ensure that the organization’s cash flow is monitored.

Financial reports are essential and they include income, cash and balance sheet statements. Critical financial decisions have to be made to determine the viability of investments. The various techniques used for asset and project valuations are also required.

Why Bank Overdrafts May Be a Bad Deal For You?

Bank Over DraftsIt is always a surprise to many as to how banks often run in the green. This is purely because of certain aspects like floating money, transfer check delay and bank overdrafts. One fails to understand that overdrafts cut incredulous interest rates.

Generally, banks say to you that you are a valued customer of the bank and your overdraft limit has been raised. This means that even if your fund status is insufficient to get a check cleared, if it is within your overdraft limit, you will get it cleared. The catch lies there only.

Overdrafts cost you huge interest rates and offer you very short time to repay. This may be a good idea for black marketers or those who deal in fast money and may have sudden cash crunch. But for salaried employees, these are a curse. Banks also care to clear your largest amount checks to extract the maximum from you and often inform you leisurely.