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General Motors Corp has launched a last-ditch bond exchange offer to avoid bankruptcy and plans to cut 21,000 US hourly jobs in new restructuring that would see the automaker nationalised under majority control by the US government.

GM CEO Fritz Henderson said the automaker would file for bankruptcy protection if an offer to exchange bonds for company equity failed to cut $US27 billion in bond debt by about 90% or other changes faltered.

But analysts doubted the debt exchange offer would succeed, setting up GM to restructure under bankruptcy protection.

Separately, Chrysler lenders were expected to receive a new offer from the US Treasury as early as Monday in the wake of cost-cutting deals the struggling US automaker has reached with unions in the United States and Canada.

Chrysler is staring down an end-of-April deadline to reach a debt-cutting deal and cement an alliance with Italy’s Fiat SpA to continue to receive US government emergency support.

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There are several methods of business financing that are available to businesses today.  One of them is applying for a small business line of credit.  What is a business line of credit and how does it work?  Should you use a line credit to fund your business?  If so, what important points should you consider before submitting your loan application?

Line of Credit for Businesses

Lines of credit are loans that are used particularly for business expenses.  Business owners with home properties and who want to apply for a business line of credit submit their homes as collateral.  This type of loan is usually not given as a lump sum payment or a one-time payment but instead, is taken in installments.  This means, any time throughout your loan’s term, you can take out cash advances from your lender.  Take note that the amount of loan you can borrow will depend on the value of the collateral you submitted. 

What benefits can you get from a business line of credit?  As your business grows, expenditures will also increase and a bigger budget would be necessary.  Therefore, having a stable source of financing is crucial to the growth of your business.   A line of credit gives you the assurance that you can take out the cash you need at any time.

What are the requirements for a business line of credit?  Generally, lending companies require that a business must have already been established and must be in operations for at least two years.  A good or excellent business credit history can also qualify an entrepreneur to lower interest rates and the best deals. 

Important Points to Consider About Business Line of Credit

Before applying for a line of credit, a business owner must carefully examine his plans and financial situation.  Are you really ready to take on a loan or a new credit?  To what specific purposes or expenses will the money be used?  Exactly how much money does the business need at the moment?  More importantly, have you created a repayment plan to ensure that you can keep up with your loan payments?

Unfortunately, some businesses did not utilize their funds efficiently and instead of achieving growth, overspending or mismanagement has led to failure.  Hence, after getting approved for a loan, you should also be prepared to take on your payment responsibilities.  Remember that a line of credit is guaranteed using your home and missing payments puts you at risk of losing the property you’ve submitted to your lender.

Ultimately, this business financing method is indeed a viable choice for small businesses and home based business owners.  However, business owners must be realistic about their plans and goals for their business and take things one step at a time. Even with a business line of credit, it is still a must to pay close attention to where and how you spend your finances.  Make sure that every cent of your loan is spent for the enhancement and growth of your business.

Read More  Why Consider Obtaining a Small Business Line of Credit

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PHILADELPHIA, April 24 — Higher-than-expected US unemployment claims and mixed news on banks yesterday suggested the global recession is far from over despite a survey that found euro zone businesses cautiously optimistic about next year.

But on the eve of a G7 finance ministers meeting in Washington, Wall Street stocks ended higher on surprisingly strong earnings from companies including oil major ConocoPhillips and regional bank Fifth Third Bancorp. European stock indexes vacillated, held back by anxiety about the overall health of the banking sector and poor results from Swiss engineering group ABB.

After the closing bell, shares of tech heavyweights Amazon.com and Microsoft gained on stronger-than-expected earnings, largely helped by cost-cuts.

Still, investors were bracing for the results of "stress tests" ordered by US regulators to determine if banks were adequately capitalized to withstand a deeper recession.

US banks including Bank of America Corp, JPMorgan Chase & Co and Wells Fargo & Co may need to raise US$1 trillion (RM3.6 trillion) of capital, Keefe, Bruyette and Woods analysts said in a report.

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Equipment Lease Financing

If you’ve just ventured into the world of business, equipment leasing may be a new thing for you.  The fact is, this type of business financing has long been used by many successful businesses in the industry.  Both big companies and small enterprises turn to equipment leasing to bring their business ideas to life at a minimal cost.

A wide variety of equipment, machinery, vehicles and special building tools are available for leasing.  In this article, let’s discuss the benefits of leasing business equipment as compared to purchasing. 

Why Lease Business Equipment

100% business financing.  No down payment is required for you to be able to lease equipment or vehicles.  Imagine not paying the down payment and using the money instead on other needs of your business.

Free your working capital.  Leasing frees up your funds while purchasing ties up your budget on the purchased equipment.  There is no need to shell out a huge amount of investment to buy machines or vehicles needed to start the business operations.  This is why, equipment leasing gives new entrepreneurs the chance to start right away even with a limited budget.

 For growing businesses, leasing enables you to push through expansion projects even if the working capital is still stuck as unpaid invoices.  There is no need to wait for your accounts receivables to get paid to obtain additional equipment or vehicles.

Eliminate obsolescence.  Machines, equipment and vehicles can get obsolete or phased out from the market at any time.  Leasing gives business owners the opportunity to replace their old equipment with new ones at any time during their lease term without worrying about the cost.  Obviously, if you purchased your equipment or vehicles, you can’t enjoy the freedom to replace them for better ones unless you have an excess budget.

Get access to state-of-the-art technology.  Even newly start-up businesses can compete with established companies by using the best equipment in the market.  Since the devices are “leased” or “rented” in installments, business owners can opt to obtain the latest in technology even with a small budget.

Enjoy tax benefits.  Business equipment leasing gives business owners the chance to enjoy tax privileges.  Many business equipment leasing companies offer programs designed to assist business owners especially with regards to their leasing tax privileges. 

Lower monthly costs mean more profit.  Most small business owners prefer the monthly mode of payment when leasing business equipment.  This way, the leasing costs are considered as operating costs instead of a one-time investment.  Monthly expenses can be balanced and funds can be distributed accordingly so the business can enjoy more profit.

Fast and easy process.  Business equipment leasing doesn’t involve complicated processing.  As long as you can fulfill the requirements of your chosen leasing company,  you can get approved within the same day of submitting your lease application and complete processing your orders in a maximum of 4 weeks.  If you still prefer to get a loan, leasing can help you get started immediately while you’re waiting for your bank loan to get approved or while waiting for your funds to be released.

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PHILADELPHIA–(BUSINESS WIRE)–ACE USA, the U.S.-based retail operating division of the ACE Group of Companies, today announced the launch of its next generation ACE DigiTech^® and ACE Privacy Protection^® policies, which provide two of the most robust forms of privacy and network liability protection currently available for the digitally-driven global business arena.

ACE DigiTech^® offers integrated errors & omissions, privacy liability and network security liability coverage designed for technology companies, while ACE Privacy Protection^® offers privacy liability and network security coverage designed for companies in all industries. ACE has revised both policy forms to address new privacy regulations for the handling of sensitive data and the increasing expenses associated with data breaches.

Three new regulations that are taking effect are potential “game-changers” for the privacy environment. These include the Identity Red Flags under the Fair and Accurate Credit Transactions Act; Massachusetts 201 CMR 17; and the Health Information Technology for Economic and Clinical Health Act, passed as part of the American Recovery and Reinvestment Act of 2009 (ARRA).

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Equipment Lease Financing

The tough challenge of financing a business isn’t just met by new companies.  Even established businesses can face the same challenges especially when it comes to business financing.  In this article, let’s talk about a business financing method that can help both old and new businesses.  This financing option is known as business equipment leasing.

What is Business Equipment Leasing?

Whether you are a new business entrepreneur or running a growing business, there is no doubt that you’ll need machinery and vehicles to start your business operations or enhance the performance of your company. 

Business equipment and vehicles can eat up a very large portion of your business budget and if you’re on a limited budget, purchasing may not be a possible option at all.  That’s where business equipment leasing comes in.  By leasing business equipment, a business owner can reduce a significant percentage of costs and save the available budget for other important business costs.

What types of equipment can be leased?  Any type of device, machinery, or business equipment can be leased- from computers, printers to special manufacturing devices.  Even vehicles such as delivery vans, trucks, trailers, etc can be leased.  Many leasing companies offer service for all types of businesses-regardless of what type of products or services you offer or to which industry your company belongs.

Leasing business equipment is also referred to as “renting equipment”.  Instead of purchasing and submitting a one-time lump sum payment, a business owner is given the chance to “lease” or “rent” the equipment or vehicles needed and submit payment in installments.  Leasing companies offer a variety of payment options such as monthly, quarterly, and yearly payment mode.  Furthermore, leasing business equipment does not require a down payment nor additional tax fees.     

More Reasons to Lease Your Business Equipment

Aside from cheaper costs of leasing business equipment, there are other advantages.  For instance, whether you’re a small business or a big business, you can obtain state-of-the-art equipment at an affordable cost.  Consequently, being able to use the latest equipment available will give any business the edge to be more competent in the market.

Equipment leasing eliminates the risk of obsolescence.  When you lease, you can request to replace your equipment for a new one at any time without worrying about costs.  On the contrary, purchasing calls for big investment so your money is tied up to the equipment you bought.  If you purchase equipment, getting a replacement is not a very practical option unless you have excess funds or the equipment gets broken.

The process of business equipment leasing is also quick and convenient.  Some business owners apply for a business loan to get the necessary funds for purchasing equipment but this option involves a much longer waiting time.  With leasing, a business owner can expect to receive the devices or vehicles ordered within a 2 to 4 weeks processing time.

Whether you have plans to expand your company or to start your very own small business, equipment leasing is surely worth considering.  Grab the chance to set up your business or see your business grow at the most minimal cost possible through this tried and tested method of business financing.  

Read More  Equipment Leasing and Expanding Your Business

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WASHINGTON (Reuters) – U.S. President Barack Obama gave a spirited defense of his economic strategy on Tuesday, saying there were signs of progress in battling the recession, but "by no means are we out of the woods just yet."

In his most comprehensive speech on the U.S. economic downturn, now in its 16 month, Obama offered no new policies but gave a detailed review of the steps he has taken to rescue the economy and rebuffed critics who say he is spending with "reckless abandon."

"History has shown repeatedly that when nations do not take early and aggressive action to get credit flowing again, they have crises that last years and years instead of months and months — years of low growth, years of low job creation, years of low investment, all of which cost these nations far more than a course of bold, upfront action," he declared.

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Every business owner is aware of just how important sufficient working capital is.  Every business is confronted with expenses each day and without a working capital, the performance of the business can be affected or daily operations can be put to a halt.  Therefore, where can you find the needed assistance for your business cash flow?

Your Working Capital and Equipment Leasing

Many businesses started with only a limited budget and if you’re one of them, equipment leasing is definitely an option worth considering.  Equipment leasing is a business financing method which helps a business obtain the necessary equipment, vehicles or machinery it needs to start operating.  Generally, leasing is paid in monthly installments so even with limited funds, a business can already begin its production without the need to purchase new equipment.

How does leasing help in keeping a sufficient working capital for your business?  We all know that the cost of equipment and machines can be very expensive.  Purchasing these essentials can eat up a very large portion of your budget.  On the contrary, since you don’t have to buy equipment, you can save the money you have for your day-to-day expenses. 

What About Working Capital Loans

Aside from leasing equipment, you can also consider acquiring a working capital loan for additional funding.  Unlike traditional business loans, working capital loans or fast business loans are especially designed to meet a business’s short term financial needs.  The money you loaned can be used in purchasing supplies or inventory, paying your workers, marketing your business, and paying your daily expenses. 

What are the requirements to qualify for a working capital loan?  In the past, these loans do require collateral just like bank loans.  Nowadays, most lending companies who offer these types of business loans do not require any security at all.  As long as you can present a good or excellent credit history, a fast approval of your loan application can be expected.  Unlike bank loans that take weeks or even a month to complete, working capital loans can be processed within just a few days upon approval.

Working Capital Loans and Bad Credit History

But what if you have bad credit?  You’ll be glad to know that there are some lenders who are willing to provide working capital loans even with bad credit.  Is there a catch?  As long as you make sure that the lending company is legitimate and reliable, the only thing you need to watch out for are the interest rates. 

Because of your bad credit, you are considered as a high-risk borrower and therefore, lenders are expected to impose higher rates on your loan.  Thus, if you want to apply for a bad credit working capital loan, it is crucial to set-up a repayment plan to be sure that you can keep up with your monthly payments and avoid additional charges that you may incur. 

Take note that working capital loans are short-term business financing options.  They are not meant to be used to execute your long term plans for your business.  Yes, these loans can be obtained more easily and quickly but remember that you’re also expected to pay the off at the soonest time.

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Just when it might have proved most useful, peer-to-peer lending has been severely hamstrung by the U.S. Securities & Exchange Commission’s efforts to get a regulatory handle on the fledgling industry. With the credit crisis making it harder and harder for cash-strapped households and small businesses to get bank loans, the opportunity for creditworthy applicants to borrow up to $25,000 from strangers at slightly higher interest rates was seen as something of a godsend.

In a cease-and-desist order to Prosper.com on Nov. 24, 2008, the SEC labeled the loan notes that Prosper issued to investors as securities and said the company violated sections of the Securities Act between January 2006 and mid-October 2008, by selling securities without an effective registration statement or valid exemption from registration. The order cited the definition of a security under two Supreme Court cases as the basis of its judgment that Prosper’s notes qualify as securities.

That judgment could potentially sink Prosper, ultimately costing it up to $10 million, Jim Bruene, editor and founder of Netbanker.com, an online banking resource site, wrote in an open letter to the SEC posted on his Web site. The ruling also exposes Prosper to potential class-action suits from investors who may try to recoup losses on loans by arguing the platform was selling unregistered securities, he said.

Prosper, the leader in the peer-to-peer lending business with about 80% of total loan volume in 2008, stopped accepting new loan applications in mid-October, pending the SEC’s review of its registration paperwork. Another P2P lender, Loania, is also registering with the SEC, while British import Zopa, an industry pioneer, retreated from the U.S. market very soon after entering it, probably to avoid onerous regulations and the resulting added expenses.

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Are you interested in establishing your own small business?  In that case, prepare your business plan in advance and make sure that you’re really ready for the challenges of running a business.

Why is It Important?

Why is it important to prepare a business plan?  First, it helps you set a definite goal for your business.  Your business plan would serve as a road map to your success.  Once done, all your future decisions should be based upon the plan you’ve created.  However, this doesn’t mean that you cannot make changes or alterations in the plan you’ve made.  Of course, you can modify your plan according to the situation that your business is confronted with.

Another reason why a business plan should be one of the first things on your list of tasks is because it is a major requirement when applying for business financing.  Whether you choose to apply for a bank loan, a commercial loan, a government grant, or to find a capitalist or an angel investor who’ll be willing to fund your business, submitting a business plan is often required.

Your prospective lenders and investors can either reject or approve your loan application based on how your business plan was presented.  Naturally, lenders and investors want to guarantee that your proposed business would be a lucrative one.  If your business plan is impressive, you should have no problem convincing any lender or investor that your business is worthy of financing.

Create an Impressive Business Plan

Obviously, not just any plan would do.  To be effective, your business plan should be clear and concise.  It should contain all the important details such as the type ownership, the company name, business licensing and registration numbers, and an accurate description about your business.  

It must present the result of the feasibility studies that you’ve conducted such as the product or service you plan to sell, the demands of the market, your target market, your marketing strategies, etc.  It should also discuss the steps you plan to execute to grow the business.

Finally, a financial plan must be included to show lenders how you intend to maintain the business.  For businesses that are already in operations, copies of financial statements or balance sheets for at least the past 6 months is also required.

Needless to say, an effective business plan should be based upon extensive research and facts.  Being able to present a well-written plan would surely increase your chances of getting your business loan application approved with no complications.

Lastly, don’t forget to research about the specific documentations or paperwork required by your chosen lender.  Aside from preparing your business plan, the basic requirements may include your business permits and licenses, copies of your business accounts, insurance, and a good credit history.  

Knowing what the specific requirements are helps you become more prepared in starting up the business.  Submitting the complete requirements would eliminate unnecessary delays in the processing of your business loan application.  Hence, having a business plan prepared enables you to start up the business at the soonest possible time.

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