Understanding Private Equity: What You Need to Know

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StrategyDriven Managing Your Finances Article | Understanding Private Equity: What You Need to KnowIf you are looking for an alternative investment method, you might want to consider Private Equity investment. This involves investing in capital, also known as equity, that is not publicly listed or traded. The parts of a company that are available to be invested in are not publicly owned, quoted or traded on a stock exchange. Deciding if private equity is the right method for you can be tricky as it mainly comes down to your feelings on opportunities on a case-by-case basis. However, understanding function that private equity investments play and the opportunities they can offer businesses and investors alike will help you make these decisions further down the line.

Why Do Companies Opt for Private Equity?

The purpose of private equity is to raise additional funds in order to bring about a positive change in the company being invested in. This can cover situations such as growing a business (which requires ‘growth capital’ for expansion or development); financing operational changes such as restructuring to make the business more profitable; financing acquisitions of other companies; or delisting a public company in order to give it private status. The latter gives a company the opportunity to focus on long-term growth without the pressures of quarterly earnings reports. Private equity also offers businesses access to funds where they would be unable or unwilling to source financing from traditional sources such as business loans.

What Are the Different Types of Private Equity Funding?

  • Leveraged Buyouts involve buying out a company, improving it and then selling it on for profit. This is the most common example of private equity.
  • Distressed Funding is where money is invested in troubled or even bankrupt companies and turning them around by making necessary changes or selling off assets such as machinery, patents or property. This type of funding is also referred to as ‘vulture financing.’
  • Venture Capital is a form of private equity in which private investors (sometimes referred to as ‘angels’) provide capital to entrepreneurs. An example of this is the television program Dragons’ Den.
  • Real Estate Private Equity commonly involves funding commercial properties and Real Estate Investment Trusts. This type of funding involves higher minimum capital in comparison with other types of private equity funding and involves longer investment terms too.
  • Fund of Funds is the most accessible form of private equity. It primarily involves investing in mutual funds and hedge funds, which offer the opportunity to invest where you may not be able to meet the minimum capital alone.

What are the Benefits and Disadvantages for Investors?

For the investor, private equity offers the opportunity to invest in early-stage companies and ideas such as with venture capital opportunities. As with any investment opportunity, there are significant risks involved in private equity, but it presents the unique opportunity of funding companies and innovations that align with your personal interests. Using investment insights in order to gain full understanding of the opportunity at hand will be of vital importance for many private equity investors. Many people see private equity as an opportunity to invest in improvement and believe that firms seeking private equity are more likely to give higher returns due to their drive for growth.

Sources of Money That You Could Be Neglecting

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StrategyDriven Managing Your Finances Article |Sources of Money|Sources of Money That You Could Be NeglectingWhen it comes to improving our personal financial situation, it’s important to think about how you can budget to maintain a healthy and balanced lifestyle. However, it’s no secret that a little injection of cash could be a fantastic way to greatly improve your financial situation and give you a nice little boost. Whether it’s to pay off a debt early, go on holiday sooner or buy something that you’ve always wanted, it’s always nice to have a hidden source of money that you can rely on. So in this post, let’s take a look at a few hidden sources of money that you might have been neglecting.

Your friends and family

While borrowing money should be seen as a last resort in most cases, it’s still an option should you need to pay for an emergency expense or if you’re having financial difficulties. Alternatively, why not chase those friends and family members for debts that they owe you? This is common for anyone that lends money to other people, so don’t be afraid to dig into past debts and ask for a favour today.

Your accidents

You hear it all the time in adverts; call this number or contact that company to help you claim compensation. While it can seem spammy at first, it’s actually fairly important to understand how to get in touch with a work injury lawyer should you actually end up in an accident. It’s not just about claiming money from a situation that negatively affected you. It’s about claiming that money so you can pay your medical expenses and stabilize your income should it disrupt your ability to make a living.

Your belongings

People have a tendency to hoard things. Thankfully, a lot of the things we buy actually hold value pretty well. Even old electronics such as video games and smartphones can hold value quite well, meaning you can sell them for a decent chunk of money. This is true even for collectable items that might be gathering dust in your attic, or even antiques and pieces of furniture that you have no need for. Sell these items locally or on websites like eBay for a little boost of cash and also a convenient way to declutter your home.

Your knowledge

A lot of people have skills that are marketable on the internet. With the advent of online study, blogging and content creation, it’s completely possible to make a bit of money on the side by just having expertise in a subject and being willing to talk about it. Get started on your blogging journey today and you can begin creating an online presence by teaching others about a subject you have expertise in. This even has the potential to turn into another stable source of income and can be a fantastic way to explore your passions.

There’s money in everything and, as long as you’re willing to invest some time and effort, you can easily extract it to help with your financial situation.

4 Business Finance Strategies You Need to Know About

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StrategyDriven Managing Your Finances Article |Financial Strategy|4 Business Finance Strategies You Need to Know AboutAs well as focusing on improving sales and generating more profit, all businesses also need to understand how to manage their internal finances and stay on track. Any slip in your financial strategy could have a negative effect, which can harm your business in the long run.

Why Do You Need a Financial Strategy?

To pursue your goals as a business, you need to understand your finances and how your funding is going to allow you to accomplish those goals. Having financial strategies in place means you can better focus your money on the things which matter, namely, the development and growth of your business.

Here are four financial methods you can implement to help your business stay on track.

1. Consider Your Funding Options

If your main financial concern is gaining the required funding to get your business off the ground – whether this is a small business endeavor or an entrepreneurial mission – then you will need to consider your funding options wisely.

You should always look for a funding option that you know you can comfortably pay back, and which eliminates any extortionate extra costs. Businesses like Become.co stand ready to help those businesses who might be unsure about the funding options available to them and would like to explore the possibilities.

2. Control Your Expenses

Have a solid business idea, product or service does not necessarily mean that it will be a financial success. What matters more in business – especially during the growth period – is always staying on top of your business expenses to ensure that your business does not fail very quickly if it does not make a high amount of sales in the first instance.

You should implement a firm strategy which allows your business to work at its most productive, for minimum cost. Understanding your set outgoings and look at ways in which you can reduce any expenses if your business sales are at a low.

3. Manage Any Business Risk

This doesn’t just mean financial risk; it means any variability within your business, which could compromise its ability to make a solid profit. This could include:

  • A new business competitor
  • Change in the demands of consumers
  • Environmental factors, such as bad weather, meaning deliveries cannot be made, and therefore orders cannot be processed
  • Technological issues
  • Change in technology
  • Change in business regulations

Only by understanding the risks posed to your business can you work to set up safeguards against them.

4. Don’t Put All Your Financial Eggs into One Basket

You don’t want to have pooled all your assets and resources into one area, only to have that area fail. By spreading out your investments and resources, you are securing less vulnerability if one of these areas should go wrong. When making investments within your business, think about a broad range of unrelated options that let you spread out your finances and assets into many different areas for more financial security.

The Importance Of Personal Loan To Start Or Expand A Business!

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StrategyDriven Managing Your Finances Article |Personal Loan|THE IMPORTANCE OF PERSONAL LOAN TO START OR EXPAND A BUSINESS!Throughout all stages of your life, everybody needs more money. Maybe they want to buy their desired items, but because of a lack of funds, they seem unable to buy. The problem here is that someone who has very little resources at a certain point has no obligation to see hopes and aspirations? Is he not allowed in time to meet his wishes?

Does he have to come back to reality? Yes, since these questions are answered. For such reasons just loan services are present.

Loans for those crucial situations that may happen at any moment are handed out to people. Throughout any lifetime there may be a case where you desperately need money. At that same time when you do not want the colleagues to make money.

Every crisis can arise when a great deal of money is needed. There are different kinds of loans, such as home mortgages, personal loans, college loans, corporate loans, etc. Every kind of loan that is required can be taken.

Loans are of various kinds, however, the important ones we are dealing with in this section are personal loans. The various loans are distinct and intended for multiple uses, however, personal loans are sometimes used for commercial reasons. It is, therefore, necessary to realize whether this should be achieved, and whether or not it makes perfect perception to have a personal loan. If you want to

If anyone wants to know what is probably the fastest loan? Click here to find the cheapest and quickest loans in your area. However, the importance of personal loans for starting or expanding a business is mentioned here.

IMPORTANCE OF PERSONAL LOAN FOR A BUSINESS

Take the following into consideration, but keep in mind that the optimal loan service relies on a range of factors, such as the lender’s performance, wages, properties, standard payment period and original intent of line of credit or mortgage.

1- Charges for start-up

Credited resources help to pay investment costs for businesses. Crediting capital is among the most important causes of finance for smaller companies. Tiny management of companies. Even new businesses increase their loans over upfront costs. The reality that the lenders want to depend on loans, deposits and credit cards to finance new business transactions does profit entrepreneurs from the liquidity of entrepreneurs. Consumer loans reduce the individual financial burden that corporate owners carry on at the beginning of a new venture.

2- Support Building

For entrepreneurs, a strong business credit history is beneficial as it improves the reputation and potential of the enterprise to encourage new investors in the prospect. A business loan is a mortgage that only occurs in the original company and is distinct from both the personal loan of the company owner. The loan is generated by the applicant as it makes regular payments to credit companies who provide a credit history for the new company.

3- Specifications are minimal

If the money required is high, a private loan can be allowed. The fee is disbursal and therefore does not involve the same amounts of paperwork as a business loan. It might be all right so that you can get a personal loan if you ever need a couple of short amount of money.

4- Tools for reimbursement

Companies are generally able to repay debt more flexibly than persons. To companies with insufficient liquidity to reimburse money borrowed, this one is important. Some companies pay debts per month, although new companies might have the choice of structuring their expenses so that, if the company becomes less successful, it is smaller at the start. As long as the company earns money, payments continually increase.

5- Deductions on investments

The Financial services authority provides entrepreneurs with the right to subtract justifiable business costs. Owners of businesses can subtract against their income tax report the interest charged on commercial loans. This is good for begin-ups that need to recycle their earnings into the venture.

6- Making Tax Payments

Your projected annual tax contributions cover no rate, quick-term government loans, and state taxes. Why are you making payments on the money that you earn?

Secondly, because it needs the profitability. You may not even have sufficient money inside to make equivalent contributions if you are running an enterprise or sole owner who receives unusual or periodic profits–like a cafe or an accountancy agency that specializes in professional services. You will settle the debt by the complete declaration deadline or immediately thereafter by using credit cards to pay the taxation. Without such a prolonged zero percent APR contract period for several months, however, higher interest rate rates undermine over longer periods the collection of credit card taxes. A personal loan of less value is a much more affordable option.

7- Protection

Personal loans are unprotected in default, implying that, broadly speaking, you do not require protection to enjoy the benefits of them. On the other side, corporate mortgages are often free, so you need to guarantee it. If you don’t have or do not want to have leverage for a loan, revolving credit is a great way to increase funds.

8- Time and return date

If the purpose of a mortgage is to offset an immediate cash deficit a personal loan can be significant. Even though you have unsecured loans to deal with such circumstances, it is appealing because of the relatively easily of accessing a private loan. Furthermore, you may choose a private loan for the company, when you are confident that you would be able to pay back the sum inside the specified period or perhaps even i.e. before-pay the project.

Conclusion

You’ve got opportunities. Assess the personal and business accounts, have your investments to allow your company somewhat more intimate and consult with a mortgage professional to give you some idea if your investment makes complete sense. An actual lender’s credit history is based on a personal loan. You might or could never take a personal loan when you do have debts available now, based on your salary.

4+ Reasons Why Your Business Needs An Accountant

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StrategyDriven Managing Your Finances Article |Why Your Business Needs an Accountant|4+ Reasons Why Your Business Needs An AccountantWhether you’re starting up a new business or have a successful one already, you may feel like you don’t need to use an accountant. After all, if your financials are simple enough to calculate, why pay for the services of an accountancy firm?

Well, whether you may wish to admit it or not, there are actually several reasons why it makes perfect sense to use an accountant for your enterprise. Here are seven of the top reasons to enlist the services of a local and reputable accountancy firm:

1. You can ensure your tax affairs are all in order

Let’s face it: one of the reasons anyone hires an accountant is because they want to lower their tax liability. The thing is, if you attempt to manage your firm’s financials yourself, you could be in danger of paying too little tax. It’s for that reason alone that an accountant can make sure your tax affairs are all in order, especially with things like IR35 and capital gains tax.

2. You find dealing with finances rather boring

Trawling through tens or even hundreds of documents to determine things like turnover, profit and loss, and tax liability isn’t the most fun job in the world. If you haven’t got a head for numbers or just find the idea of dealing with company accounts boring, you are most likely to make mistakes in your calculations. That’s why it’s best to leave such tasks to professionals.

3. You can get advice on improving your business

It goes without saying that accountants have an intimate insight into the financial health of each client’s organizations. With that in mind, when an accountant works on your firm’s financials, they are best placed to advise you where you could improve things in your business to increase profitability. For example, they can suggest ways to save money by cutting out certain expenses.

StrategyDriven Managing Your Finances Article |Why Your Business Needs an Accountant|4+ Reasons Why Your Business Needs An Accountant4. You want to raise extra capital for your business

If you’re planning an ambitious growth project for your business, you may find that you need to secure funding from a third party such as an angel investor or your bank. Before you can ask anyone to lend you some money, you need to provide a detailed insight into your company’s financial health. You will also most likely need to provide financial forecasts to show that your business is a viable one. An accountant is the best person to ask for help with such requirements.

5. You need to have an audit

There are times where businesses must legally oblige with audit requests from government agencies such as a tax office. Some business owners panic when they must comply with audit requests, especially when they’ve been taking care of their financial paperwork themselves. Luckily, an accountant can make it easy for you to provide the required documentation for any audits.

6. You want to sell your business

If you’re planning to retire soon, you are likely going to sell your business and use some of the proceeds to have a comfortable retirement. An accountant can help you determine the value of your business.