Trade Finance loans & Usage

Trade finance represents the financial instruments and products that are used by companies to facilitate international trade and commerce. Trade finance makes it possible and easier for importers and exporters to transact business through trade. Trade finance is an umbrella term meaning it covers many financial products that banks and companies utilize to make trade transactions feasible.

 

How Trade Finance Works:

 

The function of trade finance is to introduce a third-party to transactions to remove the payment risk and the supply risk. Trade finance provides the exporter with receivables or payment according to the agreement while the importer might be extended credit to fulfill the trade order. 

The parties involved in trade finance are numerous and can include:

• Banks
• Trade finance companies
• Importers and exporters
• Insurers
• Export credit agencies and service providers

Trade financing is different than conventional financing or credit issuance. General financing is used to manage solvency or liquidity, but trade financing may not necessarily indicate a buyer's lack of funds or liquidity. Instead, trade finance may be used to protect against international trade's unique inherent risks, such as currency fluctuations, political instability, issues of non-payment, or the creditworthiness of one of the parties involved.

Below are a few of the financial instruments used in trade finance:

• Lending lines of credit can be issued by banks to help both importers and exporters.
• Letters of credit reduce the risk associated with global trade since the buyer's bank guarantees payment to the seller for the goods shipped. However, the buyer is also protected since payment will not be made unless the terms in the LC are met by the seller. Both parties have to honor the agreement for the transaction to go through.
• Factoring is when companies are paid based on a percentage of their accounts receivables.
• Export credit or working capital can be supplied to exporters.
• Insurance can be used for shipping and the delivery of goods and can also protect the exporter from nonpayment by the buyer.

Although international trade has been in existence for centuries, trade finance facilitates its advancement. The widespread use of trade finance has contributed to international trade growth.

How Trade Financing Reduces Risk:

Trade finance can help reduce the risk associated with global trade by reconciling the divergent needs of an exporter and importer. Ideally, an exporter would prefer the importer to pay upfront for an export shipment to avoid the risk that the importer takes the shipment but refuses to pay for the goods. However, if the importer pays the exporter upfront, the exporter may accept the payment but refuse to ship the goods

Reduce the Risk of Financial Hardship

 

Without trade financing, a company might fall behind on payments and lose a key customer or supplier that could have long-term ramifications for the company. Having options like revolving credit facilities and accounts receivables factoring can not only help companies transact internationally but also help them in times of financial difficulties.

See if you can talk to us about loans against trade finance.

For more information.

 

futureloansiom@gmail.com

loans@floans-iomltd.com

Website: https://www.floans-iomltd.com

Phone: +44 077 4168 0089

Working Capital Loan - Overview, Uses, Benefits, Drawbacks

 WHAT IS WORKING CAPITAL LOANS?

A working capital loan is a type of short-term loan offered by a bank or alternative lender to finance a company’s everyday operations. The goal of working capital loans is to provide working capital for short-term capital expenditure, such as wages, rent, debt service payments, or to finance activities, such as sales and marketing or research and development.

 Summary

• Working capital loans are a form of debt financing meant to cover short-term financial needs, such as capital expenditures.
• A working capital loan can be an effective way to remain agile as an organization and respond to unforeseen opportunities by securing additional financing.
• Cyclical or seasonal business models can be boosted by working capital loans, with the loan financing immediate operational expenses during low-revenue periods.

 

What is Working Capital?

Before understanding working capital loans, we must first understand working capital. Working capital, at its core, can be thought of as money on hand. If an organization’s assets outweigh its liabilities, that organization has working capital.

Mobilizing working capital, however, can be more complex than simply having assets on hand, due to the relative liquidity of some assets, such as land, or intangible assets, such as intellectual property.

 

How are Working Capital Loans Used?

A working capital loan seeks to supplement temporary shortfalls in working capital with outside funding. Working capital loans can be used for a variety of purposes, including tactical positioning of the organization.

For example, a sharp increase in demand for a company’s product due to unforeseen circumstances may present a unique opportunity for the organization. If the company does not have enough working capital on hand, and the demand for their product clearly outstrips its current production, it may seek funding to purchase additional raw materials to boost its inventory.

Similarly, a working capital loan may be sought by a business owner to take advantage of any discounts on large purchases being offered by a supplier. Such an investment in a resource that the organization will need may prove critical to the health of the business and its profit margins.

It should be noted that working capital loans are generally not used for long-term assets and investments, as there are forms of financing that offer better interest rates for such a form of investment.

Working capital loans can be either secured or unsecured, although most are secured or backed by collateral. In order to obtain an unsecured working capital loan, the organization will require a high credit rating to ensure the lender some insurance that they will be repaid.

 

Real-World Example

Often, working capital loans are used to help company’s bridge financial gaps, such as the time delay between the collection of accounts receivable and the need to repay debt or accounts payable.

The need to bridge financial gaps is often seen in businesses that are seasonal or cyclical. Due to periods of high cash inflows followed by periods of relatively insignificant cash inflows, the organizations seek out working capital loans to remain operational during periods of reduced business activity.

An example in the real world is an organization that specializes in the manufacturing of Halloween masks. As the demand for such masks would be significantly higher in the fall, they would need to ramp up production activity in the summer, or even earlier.

However, because they may not be selling a lot of masks during the rest of the year, the working capital to mobilize production may simply not be available from their revenues and regular business operations. As such, they will seek out a working capital loan to begin production in the summer, and by the time their peak season hits, they will have the cash on hand to repay the working capital loan.

 

Benefits of Working Capital Loans

• Working capital loans are generally fast and easy to secure, allowing business owners to efficiently address any immediate financial needs.
• They are received all at once in a lump sum, increasing the impact of the funding.
• Business owners are not required to give up equity and control in their organization.
• Lending institutions can match the working capital loan payments to the cash flows of the business, not adding additional pressure on the business during low-activity periods.

 

Drawbacks of Working Capital Loans

• Interest rates are comparatively high to other forms of debt financing, to compensate the lender’s higher risk.
• For small businesses with no track record of cash flows, a working capital loan can be tied to a business owner’s personal credit, and any missed payment or default would hurt the individual’s credit score.
• The higher interest can be prohibitive to funding large-scale organizational efforts.

 

Get Answers To The Best Type of Loan For Your Business

See how businesses similar to yours benefit from an injection of cash into your operations and take the steps to grow your business.

Learn about additional options for working capital loans and other loans we offer at https://floans-iomltd.com/what-we-do/ and fill out the contact form or simply call.

For more information

 

futureloansiom@gmail.com

loans@floans-iomltd.com

Website: https://www.floans-iomltd.com

Phone: +44 077 4168 0089

 

 

Unsecured business loans for the construction industry

 

Unsecured Business Loan represents a fairly straightforward route to finance, provided your business’ application is accepted.

 

This form of construction finance is targeted toward SMEs and a smaller business, which is typically aren’t going to require huge sums and are less exposed to the volatility of global economics, the commodities and labor markets.

 

Companies looking for funding in the region of 25,000 to 100,000 of USD, EUROS AND GBP can access unsecured debt products far easier than larger firms looking to fund a larger scale project in the millions.

 

The main challenge facing construction firms looking for unsecured business loans is in achieving acceptance. Lenders aren’t able to secure the debt against an asset, so need to exercise caution when agreeing to lend. But here, FUTURE LOANS (IOM) LIMITED remains and provides an advise-given of wealthy investors who is capable of providing a large funding to our borrowers provided the said construction project is viable to yield returns.

 

To that end, unsecured business loans for construction require an unblemished business credit history and the business needs to demonstrate its ability to repay the loan comfortably. Failure on any of these two criteria is quite likely to see the application declined. But FUTURE LOANS (IOM) LIMITED may overlook some bad credit history and approve such loans. That is why we require a round-table meeting prior to funds release and executions of LOAN TERM AGREEMENTS.

 

Benefits and drawbacks of unsecured business loans for construction

As with unsecured personal loans, the benefits and drawbacks of unsecured business loans are fairly simple to deduce.

 

On the one hand, the loan is unsecured, so FUTURE LOANS (IOM) LIMITED is not able to repossess your assets if you default on the debt. But you’re going to pay for the privilege in the form of higher interest rates and fees.

 

One other characteristic of unsecured business loans is that they are relatively easy to apply for and decisions are fairly quick. This can either be a benefit or a drawback, depending on your situation. Quick applications and approvals are great if you’ve got a good credit history and can demonstrate your ability to repay, but if you can’t - and would like to discuss extenuating circumstances - the rigid approval algorithm that ensures the application and approval process is quick will most probably prevent this. The speed and ease of the application process may work against any firm who doesn’t have a straightforward application to make.

 

APPLYING FOR A BUSINESS LOAN WITH BAD CREDIT?

We look forward, prioritizing the vision of your business over its past. We have lent millions to businesses with short trading history, poor credit, missed payments, and even previous bankruptcies. You may be surprised at how much an unsecured business loan will let your business achieve.

Our team will work to understand your business, your goals and your circumstances, and to get you the right loan for your needs.

• Flexible funding

• Dedicated account manager

• Same day decisions

• Less than ideal financial histories considered

• Absent filed accounts considered

• No hidden fees

• No collateral required

   

  Whatever loans you're required, FUTURE LOANS (IOM) LIMITED will make it happen, Over the past 10 years we have successfully secured over $ 800 million dollars in business loans to finance franchise start-up locations, expansion locations, business acquisitions, store remodels, equipment loans, new construction & commercial real estate purchases, partner buy.-outs, and debt refinance / consolidation loans.
  
  For more information.
  
  futureloansiom@gmail.com
  loans@floans-iomltd.com
  Website: https://www.floans-iomltd.com
  Phone: +44 077 4168 0089
  

 

Steps to Getting a Small Business Loan Without Collateral

 That moment you need a SMALL BUSINESS LOANS/FUNDING, it’ either to fund your next stage of growth or to keep your business on solid ground during an unexpected crisis one thing to consider is whether you’ll be expected to bring to issue a collateral to the table.

Collateral acts as security for the lender in the event that you default on the loan and can’t repay it for any reason. If your business is short on assets that could be pledged as security, finding a no-collateral business loan may be your top priority. But however, FUTURE LOANS (IOM) LIMITED may consider what we called a personal written guarantee for loans repayment. Such would be addressed/notarized in the court/or public notary to accord it legal.

In funding your small business with FUTURE LOANS (IOM) LIMITED, you do not need to panic when you don’t have assets to present as collateral. Once you are found eligible within our funding sphere, your loans will be approved in 24 hours.

Fortunately, it’s possible to find business loans that don’t require collateral as a condition for approval. Before applying for one of these loans, it’s important to do your research so you know what to expect.

Know Your Options for No-Collateral Business Loans

The first step in getting a business loan requiring no collateral from FUTURE LOANS (IOM) is to know which options are available. Our experts will guild you through the process No-collateral loans are offered by a variety of lenders, but loan terms and approval requirements can be very different.

With these types of small-business financing, there may be some type of security required, but it isn’t cash or another physical asset you have to offer. For example, with invoice financing, you’re leveraging your outstanding invoices to borrow money. With a merchant cash advance, you’re borrowing against the value of your future credit card receipts. And in the case of equipment financing, the equipment you’re buying or leasing serves as collateral for the loan. But FUTURE LOANS (IOM) LIMITED made it easier through KYC and a face-face meeting before funds release.

Peer-peer Lending is another option for small-business financing that doesn’t require collateral. Peer-to-peer lending platforms connect investors with small-business owners who need loans. Investor’s pool money together to fund the loan, and owners pay it back the same as any other loan, with interest. These loans are unsecured, meaning there’s no collateral needed.

Be Prepared for a Personal Guarantee

As stated earlier, this serves as an indemnity. While you may be able to get a small business loan without having to offer collateral, that doesn’t mean the FUTURE LOANS (IOM) won’t ask for other conditions. Specifically, you may be asked to sign a personal GUARANTEE as security for the loan

A personal guarantee is what it sounds like: an agreement that you’ll personally repay the debt taken on by your business. Personal guarantees are often a requirement for no-collateral loans and small-business credit cards. As the lender has no collateral it can attach if you don’t pay, the guarantee gives it leeway to sue you personally to collect an unpaid debt.

Have your local bank turned you down on a bid to acquire a business loan? FUTURE LOANS (IOM) should be your option. Make a bold step and have your business funded.

Future Loans (IOM) Limited leads on all small business loans and service provider. We can be reached below.

 

futureloansiom@gmail.com

loans@floans-iomltd.com

Website: https://www.floans-iomltd.com

Phone: +44 077 4168 0089

Quick ways to Raise Money For Your Business

 

Quick ways to Raise Money For Your Business

There are few more ways to raise funds for your business. However, these might not work for everyone. Still, check them out if you need quick funds. Kindly make FUTURE LOANS (IOM) your funding options.

Product Pre-sale: Selling your products before they launch is an often-overlooked and highly effective way to raise the money needed for financing your business. Remember how Apple & Samsung start pre-orders of their products well ahead of the official launch? It’s a great way to improve cash flow and prepare you for the consumer demand.

 

Selling Assets: This might sound like a tough step to take but it can help you meet your short term fund requirements. Once you overcome the crisis situation, you can again buy back the assets.

 

Credit Cards: Business credit cards are among the most readily available ways to finance a startup and can be a quick way to get instant money. If you are a new business and don’t have a tons of expenses, you can use a credit card and keep paying the minimum payment. However, keep in mind that the interest rates and costs on the cards can build very quickly, and carrying that debt can be detrimental to a business owner’s credit.

 

If you want to grow really fast, you probably need outside sources of capital. If you bootstrap and remain without external funding for too long, you may be unable to take advantage of market opportunities. Kindly relate to our excellent service for a startup funding https://floans-iomltd.com/project-financing/

While the plethora of lending options may make it easier than ever to get started, responsible business owners should ask themselves how much financial assistance they really need. In that case relate to our experts at https://floans-iomltd.com/project-financing/

Now the big question is – How do you prepare your business for fund raising? It’s better to start from the beginning with good corporate governance as it might get hard to go back later and try to exert fiscal discipline. To address these concerns, invest in good accounting software and keep your finances in order.

 

Future Loans (IOM) Limited takes leads to all your business startups,

 We can be reached below.

 

futureloansiom@gmail.com

loans@floans-iomltd.com

Website: https://www.floans-iomltd.com

Phone: +44 077 4168 0089