Business finance - news and articles.

Using the bank to arrange business finance

The time when you could walk into a bank, see a bank manager, tell him (in those days it was a him) what you wanted to do, tell him how much you needed to borrow and walk out knowing you had the money, are long gone unfortunately. These days if you want to get money out of the banks you have to do your homework. The main things the bank will look at are… For more

How to read a profit and loss statement

If you are new to business you probably will not have had a lot to do with financial statements. All that will change when you start your own business and you will need to gain an understanding of how a profit and loss statement is put together. Here is a quick guide to get you started: The P&L statement measures all your income sources vs. all your business expenses for a given period. Let's consider an apparel manufacturer as an example in outlining the major components of the P&L statement... For more

Financing a franchise and what the bank wants

Entering a franchise nearly always involves an entry fee, other set-up costs as well as ongoing fees and royalties. These can vary widely, depending on the individual business, the type of franchise and other factors such as location, size, rent and goodwill. While many prospective franchisees have equity available in the form of a home or other savings, they often need to obtain finance and working capital... For more

Seven tips on getting a business loan

There may be somewhat of a ‘banking war’ going on as Banks push to recruit new customers but they are still selective about whom they lend to – especially when it comes to business. Now, as much as at any other time, you must win the confidence of your lender. There’s no silver bullet you can fire to get that ideal loan, but there are some guidelines that can help you succeed... For more

Cashflow forecasts and liquidity

Cash Flow Forecasting - as the name suggests it is a projection of the flow of cash over a period of time, usually on a monthly basis and covers a twelve-month period. It is a summary of cash banked, payments made, and the resultant effect on your bank balance. A business may be profitable, but have no money to pay its creditors. Profits don't pay bills; cash does, so understanding where your working capital is at any particular time is very important… For more

Cashflow financing or business factoring

Factoring and Discounting are two options for businesses to improve their cash flow. Factoring is the sale of current and future invoices to a third party, the "factor." Up to 90% is initially paid, with the balance paid (less charges) once the customer makes payment. Cash flow finance provides an option to immediate funds for business growth and allows the business management team to concentrate on the core activities of running the business... For more

Tax considerations when buying a business

As well as a lifestyle choice, the number one reason to purchase a business is the intention of making money. All too often buyers neglect to put any serious thought into downstream tax considerations, yet the easiest dollar your business will ever make is the dollars you save. Plan the purchase so as to minimise tax, particularly in the first year, when there may be unknown constraints on cash flow and a need for additional working capital. There are 3 key points to bear in mind: The valuation split... For more

Securing business finance is as easy as going online

The recent launch of the BizFinance, an online business finance service site, has proved a huge hit for small and medium business ventures. The new website www.bizfinance.co.nz is an easy-to-use tool towards securing business finance. The system information and advice is sound, confidential and helps buyers access the most competitive interest rate and terms available on the market... For more