Finance Book

Small businesses and startup companies often have limited options when it comes to quickly generating cash to support a sudden growth surge. Banks are reluctant to lend to companies without strong credit histories, and investors usually want a big chunk of the pie. One short-term solution is to use Asset Based Funding, also known as Asset Based Lending (ABL).

Company assets such as property, inventory, or accounts receivable can be used to take advantage of Asset Based Funding. It will generate quick cash needed for a short period of time. The assets are used to secure the loan by the funder, which gives the funder the ability to seize assets in case the business defaults on the loan. Often if a business uses inventory as security, the funder will require that the goods be stored in a public warehouse for monitoring purposes.

Asset Based loans follow the same general guidelines used in secured conventional loans. Some of the requirements are:

The business should have a reasonable net worth and appear viable in the long term Financial statements will be reviewed by a funder approved CPA A year of monthly forecasts must be presented The business principals will need to sign a personal guarantee Personal financial statements will need to submitted Life insurance may be required on key principals

Typically the interest rates and fees are higher than conventional loans, although lately they have been getting more competitive. So why would you want to use this type of financing if it costs more?

It provides speedy access to large amounts of cash Almost any company asset can be used as collateral Companies with less than perfect credit they can still qualify It can be set up on a revolving basis

How does an Asset Based Lender monitor the loan?

Borrowing Base Formula -The ratio between the collateral used for the loan, and the actual balance of the loan is monitored on a regular basis.

Collateral Reporting -Reporting may be required on a daily, weekly or monthly basis and should show sales records, invoices, and shipping documents. Depending on collateral used, accounts receivable aging reports and inventory listings may also be required.

Collection Controls -If Accounts Receivables are used as collateral, the funder will require that an account be set up for the accounts receivable deposits. Access to this deposit account is restricted to the funder.

Ongoing Audits -The funder will periodically audit the books to verify accuracy of the collateral used to support the loan.

If a business wants to be successful in negotiating Asset Based Funding, they must submit a short but detailed description of the business. It should paint a positive picture of the business, but most importantly, the description needs to be accurate and truthful. Always tell the funder everything, even if you think it could harm your chances of being approved. The funder needs to feel comfortable with the deal. If they get the sense that the business is hiding anything they will immediately back out. You can also be sure that they will warn other funders about a company who has tried to hide or falsify information.

By: Linda Bayko

It would be nice to believe that there is some magic ‘cure’ to all our debt problems. Kevin Trudeau would like you to believe that in his latest book Debt Cures They Don’t Want You to Know About. In the first article in this series, I described what happened when I ordered Debt Cures online and my initial review of the first few chapters. In this article, I will continue my review of Mr. Trudeau’s latest book.

Picking up where we left off – chapter seven – a chapter that should have just been left out of the book entirely. It covers the basics of credit scoring and credit reporting. Chapter eight is similar, it tells you what goes into your credit report. You can go to the Fool, Bankrate or Yahoo Finance website or a host of many other sites and get this same information.

Debt Cures rehashes much of the same information already found in most debt, credit and finance books. Despite Kevin Trudeau’s claim that it is groundbreaking and never before been released secrets, you can find the same info by doing your own research online. So it all depends on how much you value your time. You can spend time searching for this same info or you can find it all in one resource such as Debt Cures. Having said that, he does adds some tips and tricks and if you use just one of those tips then the book will have paid for itself in spades.

And when it comes to credit card debt and curing our debt problems, when the amounts of money involved can be quite substantial, using one of these tips can potentially save you thousands of dollars. The only question is are you willing to put in the work to get it done and make it happen? Are you going to make the calls to your credit card companies and ask them to lower your interest rate? Are you going to order your credit reports and credit scores and dispute the inaccuracies?

So no matter which financial book you read, if you do nothing and do not take action, you cannot call any book a scam. Even if it comes from Kevin Trudeau.

Moving on to chapter nine and ten. These chapters continue on with getting copies of your credit reports and credit scores and getting rid of errors. Once you fix the errors in your credit report, your credit score will go up and you will save money on any loan you take out – home, auto, refinance, etc.

He also recommends monitoring your credit report. This will protect you from identity thieves and make sure no new surprises appear on your credit report the next time you check it.

Chapter 11 offers tips for improving your credit score overnight. One of his tips include boosting your credit score by using less of your available credit on each credit card. He recommends you only use 35% of your available credit on each card you have. Using more than this will lower your score.

One tip from chapter 11 offers a strategy to eliminate negative items on your credit report. This tip has about a 50% chance of succeeding when dealing with debt collectors and erasing negative items off your credit report. If this one tip works then you’ll have easily paid for the cost of Debt Cures several times over.

Chapter 12 is only six pages long but it contains the 2 magic words that several people have asked about. I have a feeling that you may be disappointed about what the 2 words are. But then again, if you know someone who has been affected by this then you’ll understand why Kevin hyped these two words up so much. There are few things that can ruin a credit report and credit score faster and wreck havoc on your life than these 2 words.

Kevin recommends checking your credit report and monitoring your credit to protect yourself from I_ _ _ _ _ _ _ T_ _ _ _. It is the fastest growing crime in America and affected 9.9 million Americans last year and cost them roughly $5 billion.

Chapter 13 covers cutting your mortgage loan payments down. Money saved is the same as money earned. Kevin offers tips on getting rid of your PMI, making biweekly payments and refinancing your variable rate mortgage for a fixed rate now that interest rates have gone up.

Rising interest rates is a recent topic so Kevin Trudeau including it in this book is a timely addition. He offers a few tips on dealing with lenders who do not want to be flexible with you.

If you need to refinance your variable loan to a fixed loan, do it and save money each month on your payments.

This article covered the middle section of Debt Cures. In the third and final upcoming article, I will finish the review of the book and highlight Kevin’s tips for getting free money from the government, how to rebuild your credit, how to stop debt collectors, and how to build wealth. Stay tuned.

By: Adam Tijerina

In this article we are going to learn about Suze Orman’s 9 Steps to Financial Freedom. I will be explaining each step in full detail and then giving you my opinion on how the step is/isn’t applicable to personal finances and benefiting you. 9 Steps to Financial Freedom is a book that Suze Orman wrote in 1997. It is now over 10 years old but has stood the test of time and is still liked by many today.

Suze Orman’s 9 Steps to Financial Freedom:

Step 1 – Seeing how your past holds the key to your financial future

In Orman’s 1st step of her book she talks about how most people have some past memory that effects the way they perceive money and finances. In this chapter she helps you to realize that past memory and move on from it so that you can start new with your personal finances.

This steps to be a bit off and useless for most people. There are some people who have bad memories regarding money but in general most people are just to lazy and undisciplined. For most people it is an issue of motivation and not an issue of a bad experience. This step could be helpful to some people to get them started but it not broad enough to be applicable to a lot of people.

2 – Facing your fears and creating new truths

Here Orman makes a connection with the first step in the book. Orman has her readers look at their past memories and see how they cause them to act toward money in their current life. Orman suggests writing out a list of your money related fears and then realizing how to overcome these.

Again, I find this step to be more of a mental exercise for those that need it but not to be widely applicable to all people. The first two steps in her book seem to be more related to a traditional self-help type book and not a personal finances or financial planning book.

Step 3 – Being honest with yourself

In the third step of Suze’s book she goes into detail about budgeting. Suze suggests getting all of your past records and realizing where you money has gone over the past 2 years. The plan is to use previous records to determine your budgeting plan for the future.

This step is extremely good and something we should all consider. Setting up a budget to track our income in the most basic and important step in starting on a quest for financial freedom. The only issue here is having 2 years of old records. If you do not have 2 years go with whatever you have to make estimates for the future.

Step 4 – Being responsible to those you love

In step 4 Suze talks about setting up your money so that it can help your loved ones if you were to pass away. The basic setup of this step tells you all about insurance, estate planning, trusts, and wills.

I find this step to be very important but it seems to be out of place. I think that before you can begin to plan for others once you are gone you need to get your own personal finances in order. If you do not get your own finances in order you won’t have anything to leave to your heirs and it will be useless. Steps 4 & 5 should be switched.

Step 5 – Being respectful of yourself and your money

Here Orman focuses on helping her readers sort through and organize their own finances. This chapter includes information on putting money towards retirement, eliminating debt, and many other things. Orman writes how taking control of your finances can make you feel a whole lot better about yourself.

This is another one of Orman’s best steps out of the whole book. This is the most important step in achieving financial freedom. Without the proper savings, debt elimination, and future financial planning people cannot even start to think about financial peace.

Step 6 – Trusting yourself more than you trust others

This step talks about how people should trust themselves over others when making financial and investing decisions. It says that people should always go with their gut-feelings too.

I find this step to be completely inaccurate. People should always seek out the proper advice about financial planning from experts and have all moves planned out rather than going with a gut-feeling at any moment. I think that all people should have a personal financial advisor to help them with their finance and investing decisions. It is important to note that a financial advisor is only an advisor and all final decisions should come from you.

Step 7 – Being open to receive all that you are meant to have

In this step Orman goes into detail about money not bringing happiness but the opposite being true. It also goes into detail about the joys of donating to charities.

Here Orman contradicts many statements from the earlier in her book. In earlier parts of her book she continually talks about happiness and feeling better about ones self but then says the opposite here. She says that you get happy first and then you achieve financial freedom. What does that even mean? The two are completely independent of each other in both ways.

Step 8 – Understanding the ebb and flow of the money cycle

Here Orman writes about how sometimes all the tough and bad times in our lives teach us really good lessons for our futures. She talks about how to make the most from our past failures to see success in the future.

I think that Orman hits the nail on the head with the accuracy of her statements but again, what does this have to do with the nuts and bolts of financial planning?

Step 9 – Recognizing true wealth

In the last step of Orman’s book she writes about how the real value in life does not come from money and wealth.

Again, I feel this section contradicts some of what Suze says throughout the book but I also think that it is very true.

Overall, Suze’s 9 Steps to Financial Freedom is an excellent book for people who want to learn about the psychology of money and want to change their mindset about it. It is more of a self-help book for these people.

Her books give very little true financial advising plans and there is not much mechanical substance to it. I would not suggest this book for people looking for the nuts and bolts about personal finance advising. For these people I would suggest something by a different financial advising expert.

By: Jesse Chettle