Londrescallando Finance Secret

Archive for April, 2011

With the turmoils in the global economy, Indian Rupee exchange rate has seen huge volatility against USD and other major foreign currencies during the last three years. In the past, Indian financial markets offered very few options such as currency forwards, swaps and options (traded on OTC – over the counter market) to Indian investors for hedging their currency risks. Cash Forex or OTC Forex trading was not easily accessible to small investors and even more, it was suitable to only large participants due to various factors that acted as deterrent to retail investors.

Although trading forex on exchanges is not a new concept in the international currency markets, Chicago Mercantile Exchange being one of the top exchanges for foreign currency futures and currency options, but in India, trading in currency futures is relatively new. However, after having commenced Currency Futures trading from August 2008, Indian Currency Markets have witnessed huge growth in terms of turnover and number of contracts. At present, three recognized stock exchanges NSE, MCX and BSE offer trading in four currency pairs USDINR, EURINR, GBPINR and JPYINR and very soon the market regulator SEBI is likely to allow trading in Currency Options.

Exchange traded currency futures have come as a blessing not only to large participants but also to retail traders and investors. Here is a quick guide to the basics of currency futures.

What is Currency Future?

Currency Future is a legal contract or a commitment to exchange one currency against another at a fixed price and at a fixed date with the contract tradable on any recognized exchange.

Easy Accessibility: With the availability of currency trading on the recognised exchanges NSE, BSE, and MCX, it has become very easy for all sorts of market participants to trade in currency markets.

Easy Affordability: With contract size of $1000 USD and margin as low as 1.75%, it was never so easy and affordable for any retail investor to take a call on Indian Rupee by taking position in currency markets.

Low Transaction Costs: As compared to high commissions and spreads payable to the banks or foreign exchange agents, you have to pay a small amount of brokerage charges, and statutory taxes when you trade in forex futures on exchanges.

Transparency: When you trade on recognized stock exchanges such as NSE and MCX, it is possible for you to verify trade details if you have a doubt that the broker has tried to cheat you.

Efficient Price Discovery: With its state-of-the-art automated electronic trading system where the orders are executed on price-time priority, exchanges are better poised to offer efficient price discovery than the unregulated OTC Forex markets. In fact, internationally, it has been established that currency future is a better and efficient mechanism for price discovery. 

Running a home based business is hard enough, you only get to act together. The last thing you want is one very excited about the things that you can not control. Do not get me wrong, I do not say the things that pull the hair out of my head is, but you must learn when it’s time to cut your losses and move on to something else ignore this book. If you do, you will notice that your life as an entrepreneur goes home to go a lot smoother.

Piracy Report

Probably theThe best example of this is piracy. There’s more file sharing sites on the Internet than you can shake a stick at. Unfortunately, if your own products, you are probably a few of them can be found at these sites. It is part of the cost of doing business. Well, I do not pretend to just let it happen. Contact the Web site, they demand you take the file and then … move on. Either or not. Press the matter further only lead to a lot of wasted hours.

- Piracy Report

AnotherProblem you will run into is serial refunds. These are people who claim to buy your products and then five minutes later she sat in a refund. And they do this for every product you own. Now, there are ways to ban IP addresses and e-mail from accessing your site. This is a way around this problem. But the truth is, if someone is intent on stealing your product, they will do it. Do what you can avoid it, but do not be mad about it.

And then Of course there are the problems that go on the road running with your hosting company. Now it is to make your hosting to normal once in a while. There is no such thing as 100% availability, no matter what anyone says. However, if you find that you are having major problems with your hosting service and it will have for ever, not in a war with them. How to pack your bags and come to another hosting company. Save yourself a lot of gray hairs in the process.

Health insurance is a kind of agreement between you and your insurance company that you need in case you get sick and need medical help. Unfortunately, usually people get interested in their health insurance only when something bad happens – only to find out that they have a 3,000 deductible or some important things you need (such as a wheelchair) are not included into the policy. Before you get a health insurance policy it’s recommended to review all of them and find the one that will give you most coverage.

Almost all health insurance policies cover emergency services and whenever you have to go to the hospital and receive the treatment the cost will be covered less the deductible specified in the policy. A basic deductible for emergency room treatment can start at $50 and it should be mentioned that insurance companies are very particular about conditions that can be considered an emergency. If you have flu it’s probably not going to be covered, unless your fever is way too high. Your health insurance is likely to cover annual check-ups, with their number specified by the policy. If you need to see your doctor more often than it’s usual you need to look for a health insurance policy that soul be more comprehensive and would provide you with more coverage. Vision services are usually covered, including one visit to the eye doctor a year, while glasses and contact lenses are not covered in most cases, especially if you have a basic health policy. Read the rest of this entry »

Let’s face it, if you don’t have a proven track record or some notable credit worthiness, it is tough to get financing. Risk factors and high costs of servicing small accounts are the major reasons for banks and financial institutions to stay away from people who don’t have a good credit history.

However, the silver lining in the cloud is – business finance, small or big, is the bread and butter for banks and other financial institutions. If you can convince them that you are a good investment opportunity, you are on!

Following tips might make your application irresistible for banks or other institutions.

1. Be Thoroughly Prepared: You need to satisfy the lenders regarding your track record and your future viability. The documentation required for this has been discussed in my other article All About Small Business Funding.

If you are just starting out, you need financial projections for at least next three years. A financial projection typically comprises of:

• Estimates of your income and expenditure

• Working capital estimates

• Cash flow statement

• Projected Balance Sheets

• Precise loan utilization detailing

• Profiles of decision making people i.e. top management who would be handling the project(s) for which you need financing

• Comprehensive business plan

Some of these documents require professional expertise and you would need a professional accountant to prepare them.

You would also need the following documents apart from above mentioned documents, if you are already an established business and want a small business loan to fund your working capital requirements or your expansion plans.

• Copies of the Balance Sheet, Profit and Loss statement, and tax returns of the company

• Personal financial statements and tax returns for last three years

2. Anticipate Questions: You need to be well prepared, and need to have a fair understanding of the lending process to anticipate questions you are most likely to face.

Remember, lenders need to be convinced about your loan repayment ability. Ideally your business plan should also include answers to your banker’s questions. The most frequently asked questions are:

• How much money do you need? Be exact! You can add a little extra for contingencies.

• Long term or short term? Be prepared to go into detail supported by your documents, the time you require to repay the loan.

• What are your loan utilization plans? Explain whether it is for capital expenses, working capital, and expansion or to set off old debts.

• How you will repay it? You got your cash flow projections here to explain repayment time frame. Use your financial projections and business plan to convince the banker of your repayment capability.

3. Don’t Be Apologetic: Remember; banks look for good opportunities to invest. Be confident that you are one of the better opportunities the bank has come across and project that confidence to the banker. It is a deal on equal terms. Banks are not doing you any favor by giving you a loan. You are giving banks good business too. You are an entrepreneur who can and will repay the loan.

4. State the truth and back it. Bankers are very smart people. If you make any unsupported grand statements, take my word, they will see through it, and you will come out looking as someone who is desperate for a loan. And bankers don’t touch such people with a barge pole! Better idea is to keep your projections, documents, figures and your statements on the conservative side. You will cast an impression of a cautious and methodical person.

5. First impression is the lasting one. Dress in a professional manner for the interview. All the loan documents must be typed; handwritten documents look unprofessional. This is a business transaction, so treat it as such.

Last but not the least, a word of caution: getting approval for a business loan is good and you are almost through to your path to realizing your dreams. But don’t forget to read the fine print. Loans have hidden costs such as: annual fees, bank charges, closing costs, commissions, and balloon payments. So stay focused and clear-minded about these riders during the loan process. Be sure about your goals, keep focused and work according to the plan. Your small business finance requirement may turn out to be just the dose you needed to turn your dream big!