How to Get a Line of Credit Approved for Your Business

Running a business has always been a challenge for everyone. There are a lot of tough times that you will go through along the way, but these will make you strive for success. Whether you own a big or small business, you still have to exert more effort to achieve your end goal and keep it thriving.

One of the essential things that will help your business succeed is by getting a business line of credit. This type of loan can be borrowed through a credible lender for a specific purpose. In case you need more finance to start a new business, you are legible to get a line of credit.

In fact, this works the same way as a credit card. You have the freedom to utilize the money when you need it the most. The interest rate can be lower, since you only have to pay for the interest on the money that you have actually withdrawn. Moreover, a business line of credit is particularly designed to fund short-term finance needs, such as purchasing new equipment, bridging financial gaps, buying inventory, or paying operating expenditures.

If you are interested to get a business line of credit, here are some smart ways to get your business line of credit approved:

Review your credit history and rating

One of the most important things to consider before applying for any type of line of credit is to know your credit record. You have to check your credit history, so you can be prepared when you ask your bank for a business line of credit. Apparently, you can access your overall credit information and have it printed out. In addition, to have a good credit record, you should pay your bills on time or keep a low ratio of debt to your credit cards. Therefore, lenders will know that you are creditworthy and have the ability to repay the loan. Also, your limit will be higher and the interest rate will be lower.

Collect your financial records

Prior to getting your line of credit approved, financial institutions will look at your financial records first. These loan companies will inquire into your income, the kind of job you have, where you live, and other necessary factors that could either hinder or be of help to your application. Thus, you need to ready some copies of your bank statements, employer information, and past tax returns.

Increase your credit and utilize it

It is highly recommended that you utilize and apply early for both business credit lines as well as credit cards. With this, you can establish a good credit history and be able to request for an increased credit limit, though you don’t really need it immediately.

Overall, getting a business line of credit will be easier if you have a good credit rating. You have to make sure that you are able to pay for your finances on time and never let your record turn into a bad one. Simply follow these tips mentioned above when you are about to apply for a line of credit. Certainly, you will get what you deserve.

Six Ways Student Debt can Swallow up Your Budget

Chances are you won’t find a single postgraduate in the nation who doesn’t audibly groan and wince like they stepped on a Lego at the mention of “student debt”. The truth of the matter is that student debt actually has even more dire implications than people are aware of. Aside from simply needing to struggle with paying back their personal debt balance, student loan debt impacts your budget in ways that are far more expansive than you may know.

Less opportunity for independent proprietorship

Historically, people have been able to survive periods of economic destitution by starting small businesses to supplement their income. However, due to the costs for college skyrocketing in such a short period of time, the windows of opportunity for you to overcome a saturated job market by opening a small business are shrinking. Student debt isn’t just something that you need to pay back, but also an anchor on the amount of money that you can safely invest into improving your overall standard of living in general. The higher your debt grows, the less freedom you have to use innovative and independent methods for fighting it.

Inability to set aside money for a buying home

In the face of soaring student debt, you won’t have nearly as much of an ability to think about becoming a homeowner. Without being able to set aside as much money as you would if you were debt free, the costs of home ownership will likely be far higher than what’s reasonable. Without being able to escape loan debt, chances are that most postgraduates will have to resign to renting for the rest of their lives.

A much lower chance of getting any other kind of loan

Even if you sweep your student loan debt under the rug and refuse to think about it, student loan delinquency is never invisible. Your inability to pay back a loan will be recorded and have a direct effect on your credit score, which will essentially blacklist you from all credit unions that bring it up. Due to the difficulty of getting any loans, student debt can end up forcing you to pay for just about everything in cash.

Your retirement will be hindered

Obviously, when you’re so focused on keeping your head above water with your student loans, there are other responsibilities and needs that just go untouched. It’s not news that it’s becoming more and more difficult every year for Americans to make retirement their priority, but what is new is the amount of debt that young adults are having to take on to help pay for a degree

If there’s one piece of advice that young adults need to take is that if your employer has a 401K plan, and they have a matching program, you should probably take advantage of it. Retirement advisors agree that the optimal time for Americans to start saving is 24 or 25. Even if it’s only $50 a month. Save.

Budgeting for student debt

Despite the reality of how daunting student debt can be, it isn’t impossible to successfully fight against it with the right budgeting techniques. The first step of the process to to simply come up with a budget in the first place, which is many people may initially find too intimidating to even consider.

Mark off a weekend that you can sit down and identify all of the specific ways that student debt could potentially interfere with your personal ambitions; there is generally a six-month grace period allowed after graduation. Even if six months have already passed, you can still benefit from working the budget out as soon as possible.

Determine a monthly payment amount, and make a commitment that you can reasonably maintain. Even if you can only pay back a small amount at a time, anything is better than nothing at all. Calculate any payments on private student loans that you may have as well, and be sure to consider talking to any private lenders who may be able to guide you in the right direction.

After you know how much you’re going to be spending on loan repayment on a daily basis, take a moment to see how you budget can be reconfigured to accommodate it.

Don’t Take the Deal: Three Alternatives to Payday Loans

There is no question that you do have to behave responsibly and employ some clear thinking about your financial situation, if you are contemplating applying for a payday loan.

If you need a short term loan that gives you more flexibility on the repayment date, there are services like Moneyboat UK and other similar lenders, who do offer an alternative to getting yourself into a payday loan scenario.

Payday lenders under pressure

The fact that some payday lenders have attracted the attention of the Competition and Markets Authority, who are proposing that these lenders list their interest rates on price comparison sites, is an indication of the high cost of this form of borrowing.

One of the main concerns about these payday loans is that due to the very high interest rates they normally charge, any sort of default or late payment could very quickly escalate into a scenario where your financial situation worsens, as you try to service a higher level of debt.

The Financial Conduct Authority produce annual figures on the level of borrowing associated with payday lenders and lending levels are in the region of £2.5 billion, with some borrowers signing up for as many as six payday loans during a 12 month period.

With the interest rates being charged by payday lenders coming under scrutiny, consumer groups tend to suggest that you need to file this sort of service under the “last resort” category.

There are normally a number of viable alternatives, so here are some options to consider.

Start out on the credit repair route

A number of borrowers are likely to view payday lenders as their last option, especially if they currently have a poor credit history and their options are therefore limited.

If your credit file is not exactly perfect, that will limit your borrowing options to a certain extent, depending on how bad the information on you is. If you have missed a few payments, this can be viewed more leniently than if you have court judgments for example.

Your goal should be to try and repair your credit score so that you can qualify for more lending options. Having a better credit score will often be reflected in the interest rate that you are charged.

One way to get on the credit report road to recovery would be to apply for what are referred to as “credit repair” credit cards. These credit cards start off with a low credit limit, which is increased as you demonstrate your ability to make payments on time, so they can give you access to some funds, at a much lower rate than you would be charged for a payday loan, and you improve your credit rating at the same time.

Join a credit union

There are plenty of credit unions around and there may be a suitable one to join in your area.

The benefits attached to joining a credit union, if you meet their acceptance criteria, is that it opens up the possibility of being granted a small short term loan when you need it, at rates that are much lower than a payday loan.

You will find that some credit unions offer free financial counselling if you are experiencing difficulties, and they also offer a savings plan that should allow you to get a bit of money behind you, and might even allow you to qualify for a larger loan through the credit union at some point.

A payday loan from your employer

If you need to borrow some money for a financial emergency and can pay it back from your wages when you next get paid, it makes more sense to approach to your employer rather than go to a payday lender.

Some employers definitely do agree to provide advances on your salary and because this is an advance on money you are due to be paid rather than a loan, there should be no interest to pay.

It is not ideal to start taking money from your next wages payment and if you find yourself needing this help on a regular basis, you should take a good look at your finances to see what you can change.

If you do need an advance until payday, there is no doubt that if your employer does agree to provide this facility, it is a much cheaper option than going to a payday lender.

If you do need to borrow some money, explore the options available, such as short term loans, “credit repair” credit cards or credit union loans, as these should save you a fair amount of interest and therefore allow you to hopefully get your finances back on track faster than you first thought.

Nicholas Krauspe is the Head of Operations at MoneyBoat.co.uk, a London based alternative finance company providing unsecured consumer credit to residents of the UK. Nicholas has over 10 years of operations and management experience in the consumer finance sector.

A Financial Frame of Mind: Drawing the Line Between Frugal and Obsessively Cheap

Michael Jackson was known for the lavish shopping sprees that he went on for his own amusement. According to unauthorized biographies by Randy J. Tarraborelli and others, though, Jackson could be grasping when it came to compensating the music producers, attorneys, managers, security agents and other professionals whose skills he depended on.

Michael Jackson’s life carries an important moral lesson on the line between frugality and cheapness, generosity and flash.  If your particular brand of financial philosophy hurts anyone — you or others in any way, you’re probably doing something wrong.

What are some of the other tests to apply to yourself?

What is your bottom line — price or value? It’s an important test to apply. If you find yourself picking a cheap, low-capacity computer solely for the price savings to be had and don’t feel like thinking about how you lose out on productivity, you could be crossing the line from frugality to cheapness.

Do you want to save to spend, or just save to save? Those who are frugal love to spend, but only on the things that they personally consider important. They may not shop for clothes or gadgets, but may spend on a college course or a great vacation. The frugal person does want to spend, but wants to do it on their own terms. A person who is cheap saves for no good reason.

Is there any elective spending that makes you happy? If you tend to lean towards cheapness, there is probably no kind of spending that does. Every elective expense leaves you with a feeling of guilt and dread. If you have a healthy attitude to money, though, there are likely to be plenty of things that you can think of, that you would spend on without feeling bad.

Are your choices short-sighted ones? Would you buy a cheaper home for the saving right now, even if it means a poor long-term investment? The inability to loosen up for a better investment is a hallmark of obsessive thrift. When it comes to investments, it’s important to take the long view.

Is your thrift more about smartness or brute force? People who tend towards frugality spend less money by being smart about their shopping. They might always buy quality brands, but choose the previous year’s model to save money. They might spend some time couponing, and always be careful never to pay credit card interest. When you’re cheap, you usually go all out, and simply shut down your spending. Your purchases will tend towards unreliable, low-cost brands, or not buying anything, at all.

Do you like spending to make others happy? Frugal people usually do. They find their careworn minds loosening up when it comes to an opportunity to spend a little money to make someone happy. If you find that you’re unable to happily spend for any reason, there’s a problem.

Finding the will to change

Whether you hold on to your money or blow everything to impress others, you basically value money itself, rather than the power to create happiness that it represents. While being tight-fisted can make you happy in a narrow sense, it can have devastating consequences on your life and the lives of those who depend on you. It’s important to step back, take a look at what your relationship with money does, and gradually develop the will to change. If you’re willing to give yourself enough time, and to begin a careful move towards moderation, you’ll find that it leaves everyone far happier.

Start by spending on others

Buy the best gifts for your loved ones on birthdays and on holidays, going as far as you can afford. Look for good charities to give to, and don’t claim a tax break. Tip well, and be generous when you pay people who work for you.

Certainly, you shouldn’t spend any more than you can actually afford. It’s important when you begin to loosen up, that you are aware of exactly where you’re headed financially. If you aren’t used to being free with your money, it could end in overreach.

Make solid, logically defensible choices

One of the best ways to make the change is to carefully begin paying for greater quality in every purchase. Whether it’s a car where you get greater protection or better quality foods that are more nutritious, upgrades where you can easily calculate the value that you’re getting for your money are an excellent way to begin.

Look for the irrationality

A careful look at your motivations for not wanting to spend money is usually the ultimate way to change. It can take a painful look at yourself to be successful. In the end, though, it’s worth it.

Sheldon Roberson came across frugal living a few years ago, and was instantly hooked as she realized how it could assist her as an investor. She encourages others to learn about these lesser-known ideas and writes on the topic for a small number of blogs.

Spartan Blues

Earlier this year, I mentioned that I’ll be running the spartan death race.  Despite the fact that it’s taken up a rather large share of my time since then, I’ve been fairly “mum” about it on the site.  I’m not exactly sure why I havent written much about it, other than the fact that as of right now, my training is simply working out every day.  Mostly, I didnt want this to turn into a death race blog, because there are tons of those out there already (I read them on friday nights – for real).  However, I’ve lately been feeling like the workouts that I do are not going to be enough, and it’s starting to bother me.

This race is meant to be a physical, mental challenge and mindfuck.  They publicly tout the fact that only about 15% of the entrants finish the race each year.  When I signed up for the race, I pretty much knew where I’d stand – in the 85% that would get their race packet stamped with DNF (Did Not Finish).  I’m dont think I’m some sort of workout god or anything like that, nor do I think that I’m some sort of superhuman, so I simply trained for 5 months, resigned to the fact that even though I was training, I wasnt going to finish.  The worst part about that is that there was most likely nothing that I would be able to do about it either.

Unfortunately, this developed a poisonous attitude within me during my training.  All of the sudden I began to make excuses about skipping certain exercises while at the gym, in the interest of “time”.  I told myself that I’d do the sit ups and push ups at home, so that I could get out of the gym on time and get to work.  I mean, what difference did it make anyway?  It’s a virtual certainty that I wasnt going to finish the race, so skipping out on a few sit ups wasnt really going to matter in the long run, right?  That logic has been very pervasive, as well as very damaging to my training.  With the results pre-ordained, it gets difficult on a down day to even bother trying.  As I’ve been noticing, this is very common with large, seemingly insurmountable tasks.

This race isnt about finishing or about getting to the top and checking something off of a bucket list.  This is about life.  How you handle adversity, what you do when you’re unsure of things, and breaking limits that you never thought existed or have never bothered to test.  Knowing that I’ll come out of this with something that I cant get anywhere else is assuring, but isnt going to change my attitude now.  Lately, I’ve been pushing myself even more as the race is getting closer, and I’m still having trouble breaking out of the attitude.  Somedays it goes well, and others not so, but still I keep going.  After a while, it hit me – this is just like getting out of debt.

At the beginning, I was very gung ho, and was able to pay off all of my credit card debts and one of my student loans.  From there though, the initial excitement and “can-do” attitude waned, and I fell into a few year long slup with my debt repayment.  I never added new consumer debt  (not counting mortgage) but I didnt make significant progress on the debt that I had already.  After a long spell of not doing much, I slowly started to focus on student loan number two, and was able to get a few wins and feel successful after that.  Once that happened, I decided to make one last push and get it paid off once and for all.

That taste of victory continued, and after a quick slowdown because of cash flowing our wedding expenses, H and I got back on the wagon and started hammering down the truck, which I paid off at the beginning of the month.  This win has ignited both H and I, and we will begin to attack the student loan with the vigor that we attacked the truck, and that I attacked the credit cards with back in 2009 and 2010.

With the race, I’ve been conditioned to fail.  I dont know what’s going to happen during or after – all I know is what’s happening before the race, and I dont mind it so much at all.  It’s easier to stick with what I know than push myself outside my boundaries, which could be fraught with risk, uncertainty and potential failure.  Who wants to experience that, right? No one likes to fail.

The same thing happened with my debt repayment.  Everyone told me at the beginning that debt was just something you lived with and tried to manage.  You couldnt be totally free of debt, you just had to watch the amount that you had and try and keep a lid on it.  You needed debt to buy a house (not totally true, but it helps), you need debt to buy a car (not true) to live your day-to-day life (not true).  I’d been conditioned to accept debt, but to try and keep it at a manageable level.  My dad even told me this when I told him that I was trying to pay off all my debt.  On the side of well managed debt, I was conditioned to find it acceptable, because changing that would take a lot of hard work, and uncertainty and sacrifice during the debt payoff period, and fear about what was going to come after.  Then again, I’d made my wishes of being debt free so public, I’d have to come back and explain to everyone that I failed, and they were right and living debt free was not possible.

While I dont know the outcome of the death race just yet (but I can guess) – it’s nothing more than that at this moment – a guess.  I can absolutely go there and tear it up, or I can break my ankle getting off the plane in vermont and not even start.  But there’s one thing that I do know: No one can stop me from trying but myself.

The same goes for you and your debt.  You may be facing a mountain of debt yourself, living paycheck to paycheck and feeling comfortable about your situation.  If you are, and you feel like debt is something that you can never completely eradicate, then go ahead and keep doing what you’re doing – that’s more than fine.  However, if you’re willing to sacrifice and work hard the common logic of debt needing to be managed does not apply to you.  You can be one of the many that is afraid to try, content with the way things are going for you or you can be one of the few that is curious about what’s on the other side of debt, and do anything in your power to get there.  No one but you can stop you from trying to pay off your debt.  You also dont need anyone’s permission to pay off your debt, you just need  a plan and some spare cash to start.

You most likely cant pay off all of your debt in 1 day, 1 month or even 1 year – it took you a lot longer to build it up than that.  Get ready for a long, hard slog and a lot of sacrifice.  But I promise you, it will be worth it in the end.  I am not even finished with my debt repayment yet, but I’m close enough now that I can taste it.  I didnt make much progress for the better part of 2 years, but I didnt stop trying and my balances kept going down.  When I started, I had 55,000+ in consumer debt, and I made about 32,000 per year.  Things have changed since then, and now I’ve got just $8,800 in non mortgage debt left to pay off.  Despite what everyone says about debt, I’m closer to being debt free (without the mortgage) than I have been since I was probably 19 years old, and it feels swell.

Remember, the things that always make you feel the best (and the best about yourself) require an effort that you’ve never put forth before that point.  I had never made more than $6,600 in 1 year when I started trying to pay off my debt.  I didnt let it stop me and right now, I’m almost out of the woods.  Use the hardest thing that you’ve ever done in your life for motivation, but know this will be more challenging – just not in the same way.  Grab on to the chair you’re sitting in and it’ll be a rough ride, but you’ll get through it, and you’ll be so happy with yourself on the other side.  You’ll also be ready to take on a task that you never would have dreamed of starting before you paid off your debt.  What will it be?

The death race may get the best of me, but it wont be for lack of me trying.

Readers: Have you been talking yourself out of debt repayment for one reason or another?  If not – congrats, if so, how can you get yourself back on track?  How do you treat the naysayers in your life, and how do you deal with yourself when you join them?  

How to Payoff your Nelnet Student Loan

Well, it’s time again to do one of my favorite things: Write up a post on making a final debt payment.  I did one for when I finally paid off my last credit card here and now I can do one for my Nelnet Student Loan.  (I’m talking strictly the steps needed to take to pay off the loan.  If you want to know How to Pay off debt, check out this post)

This loan and I have kind of had a rough history.  When I first had to start paying back my student loans, I thought I only had 2, and didn’t know about this one until I got a missed payment note in the mail.  Whoops! I remembered taking it out, but I had figured that it had been lumped in with my other loans.  Unfortunately it wasn’t, and that is one thing that really bothers me about student loans.  Many students have payee’s coming out their hind parts, and consolidation isnt always the right move.  It wasn’t for me because I was planning on paying them off in a few years, and once I did that, it wouldn’t matter.  I also had some very low interest rates on my student debt, and some were subsidized as well.  I would rather just pay 1 person, but that’s just me.

With this loan specifically, I’ve gotten questions on it before regarding the payoff schedule.  In short, a reader wanted to know what nelnet did if extra was paid on the loan.  Short answer: They moved your next due date forward to get their (interest) money.  He also asked me what happens when you pay off the loan.  Here’s what I did to to pay it off.  (I tried calling, but was told to go online)

First, you need to log in to your nelnet account.  You should already know how to do this if you’ve been making payments to your loan thus far.  Once you’re logged in, go to the My account tab, and you should see this:

Pay off nelnet

As you can see, after I made the big payment at the beginning of this month, it pushed my due date into 2014.   I don’t want this stupid little thing hanging over my head (and accruing interest) until then.  I want to pay it off.  Above the box, you’ll see I’ve circled the “click here” to obtain your 10 day payoff quote.  Once you do that, it will take you to another page that will tell you how much you  need to pay them in the next 10 days for them to consider the loan paid in full.  It takes into account interest that has accrued on the loan that is outstanding, estimated interest over the 10 day period (I’m assuming this was more relevant when people paid bills by paper check and snail mail) and the current principal balance on the loan.  Here’s what mine looks like:

Pay Nelnet

So, I can happily say that I submitted the online payment on 10.21, and it has cleared the bank.  Since this is the first student loan that I’ve ever paid off (but  not the last, rrrrgh) I was curious as to what would happen next.  Would I get a letter from the servicer saying that it has been paid off ?  (Not sure, but I don’t think so)  Would my credit report score improve? (not sure on that either) Would I have not sent the right amount and owe them something ridiculous like 32 cents?  (not at all).   After the payment clearing the account, here’s what my “My Account” section looks like:

Nelnet Loans

I now have a $0 amount outstanding – it’s awesome!  Here’s another shot of the group summary.  This is what you’ll want to see when you’ve sent them the final payment.  Notice on the “status” it says PIF by borrower, Paid In Full.  Not sure why it still shows me needing to make a 38 dollar payment, though.  Here’s the shot:

nelnet4

There is the process to pay off your student loans.  Make sure to keep your focus and you’ll be here in no time!  Good luck, and if you have any questions, contact me or leave them in the comments.  I’d be happy to answer them.

Where Would I be Without 2 jobs?

Unfortunately, this is all very difficult to predict due to the fact that I would have been making different decisions if I had less income, starting with the car, and who knows how far the reach would extend from there.  I’ve tried my best, though.

As I was driving into work the other morning, I was thinking about my jobs.  I’ve been working in the “real world” for over a year now, and have had 2 jobs for most of that time.  When I found a new job, my original job said it was ok for me to stay and work afternoons/nights and weekends for a while.  I wanted to get rid of my debt fast, so I figured that I may as well give it a swing.  I also realized that this was probably the best time for me to do so, as I don’t have children that need to be cared for.  It also works well because once I get out of debt, it will be easier for me to build savings (from increased cash flow) and stay out of debt.  I also figured that I may not always have as much energy as I do now to work as often as I do.

I began to wonder where I would be if I had only 1 job this entire time.  While my expenses would have gone down slightly, it wouldn’t have been much.  I’ll assume that my car would still need to be replaced and that every other major thing would hold constant.  These numbers will most likely turn out to be quite speculative, as my purchasing and behaviors would have changed if I had less available cash.

Going back to my monthly review in November 2009 on this, the first thing I noticed is that my budget is very, very different now.  I pay a lot more for car insurance (here are some car insurance quotes if you need them) and gas, to name 1 thing.  The other thing that I noticed is that I was still in my post graduation 6 month grace period for my student loans (It ended in December), so those did not even make the list!  There was $4,800+ worth of credit card debt left at that time.  I don’t remember what the minimum (combined) monthly payment was for these 3 cards, but I think it was around $200.

After this, my blogging gets fairly thin, but in my next update at the end of February had actually brought my credit cards up to 6,000 total after an adventure in vehicle sales tax.  I paid that off right after I charged it, and I was sitting with about 4,000 on credit cards still.  Unfortunately, I had taken on a lot more water than I had anticipated.  I now had 3 student loans to pay monthly (total: $300) and a car (plus more expensive insurance, total $500).  At this point, loans alone were running me about $815 per month.  It should be noted that if I only had 1 job at the time, my car purchase would have been much different than it actually was.

I think that I would have limited a car payment to 200/mo, bringing my total monthly debt to 700.  With that, there would have been about $400 worth of payments to start my debt snowball with.  The way my snowball has been working so far, there has only been 1 month (in 12) where I’ve applied less than 1,000 to my debt.  Its usually been closer to 1200 to whatever was the focus of my snowball.  Just by that rough estimation, the second job has helped me move 3 times faster than I would have been able to otherwise.  Given the hole I was digging out of, this is no small feat, and could mean freedom from debt years earlier.

I’ll be able to start saving more years earlier, and allow compound interest to work in my favor longer.

It’s been worth it to me.  Are you willing to sacrifice to slay your debt?

PS – I don’t even work as much as some of the other bloggers.  Jeff at Deliver Away Debt is killing it too, digging out of a much larger hole much quicker than I am.  Godspeed, brother.