Tag: credit rating

Risks of Investing in Bonds

Posted by WFG – August 22, 2011

International Money Pile in Cash and Coins

Image courtesy of epSos.de

Despite their reputation, you still need to understand the risks of investing in bonds. Some suggest that they hold a lower risk than stocks. And though this may be true, it’s important to why this is when investing large amounts of money.

The Lower Risks of Investing in Bonds

To begin with, let’s look at why bonds carry a lower risk than other investments. Read the rest of this article

The Financial Crisis: Europe Vs. USA

Posted by WFG – August 11, 2011

As the economy continues to hang in the balance of a financial crisis, it feels as though Europe and the USA are battling against one another. But it’s not to see who is the best, but more like who’s the worst. As the two heavy weights of business economy battle it out, who can take the most hits?

The bad news has been appearing for quite some time, so to assess the situation closely, it’s better to take more recent updates. And it begins in Greece. With their taxes high and job losses out of control, they took a huge blow for Europe. The stock markets nose-dived and the rumors of defaults echoed through the financial market like kids in a school playground. But as their image was battered and bruised, bailouts came to the rescue. The European side of the argument climbed back from near death and though they might be wobbling, stayed on their feet. Read the rest of this article

Greece Still in Threat of Default

Posted by WFG – July 4, 2011

The leading credit ratings agency Standard & Poor have warned that Greece could still be in threat of default. This comes following the consideration that banks will roll over their holdings of the country’s debt, which is proposed in a recent French plan.

The position of S&P could cause problems on the European attempt to deal with the crisis, especially if Moody and Fitch, a rival company, come to the same conclusion. A ‘selective default’ may trigger insurance claims for Greek bonds and cause further turmoil for the fragile markets.

Both German and French banks had revealed that they were ready to help Greece. But now many officials have stated that a final decision hasn’t been approved. Ultimately holding back on a verdict that seemed to have been made.

Another option was put forward, suggesting that French financial institutions invest 90% of the proceeds of the expiring Greek bonds into newly-issued bonds lasting five years. The plan gained a fair response and could be used as a model similar to the German plan.

Greece will need billions of Euros over the coming years, to aid in assistance. But government officials have postponed a second aid package until they know how much the banks can help.

How to Improve Bad Credit

Posted by Winflow – June 22, 2011

Whether you’re trying to open a small business or trying to grow it, you need funds. More often not, getting funding involves applying for business loans or lines of credit from the bank. Unfortunately, since the economic downturn, many banks are much more strict with their lending policies. To improve your chances of getting funding for your small business, consider the following:

  • Look into micro-loans. Micro-loans are a good option for businesses that have small funding gaps or have temporarily lost their line of credit. Business owners can take out a micro-loan for as little as $5o0 and once you pay it back it will boost your credit history.
  • Re-negotiate payment terms with vendors. If you are having trouble paying your vendors, talk to them about it. Assure them that you are doing everything you can to get their money back to them. If you’re honest about payments, there is less of chance the vendor will send your debt to a collection agency which could harm your credit history.
  • Be timely about collecting customer payments. Banks are more likely to lend to business owners that collect their customer payments in less than 45 days.
  • Review your personal and business credit standing. If there are any errors, it could affect your chances of getting a loan.
  • Re-work your business plan. Be specific about how you plan to use a loan, pay it back and turn a profit.

If you need assistance getting a bank loan, contact the Winflow Financial Group.

The Micro Loan

Posted by WFG – June 14, 2011

When you are starting a business and need funding, you may feel overwhelmed by the high numbers. But not all companies start with investors giving you hundreds of thousands, you can start smaller by using microloans. Not only will these help you start your business but there will also be less pressure.

Start by taking your borrowing request straight to the lenders. You can explain in detail why you need the money and choose the interest rate you can pay. This will allow investors to see you directly and give them an opportunity to read about your business before they invest.

When everything is completed you will able to use your investment funds and set up a payment schedule. This is determined by the interest rate and will help your credit rating when you meet the timely payments. For the borrower, advantages of the microloan are that there is no fixed interest rate, no hidden fees and no pre-payment penalties. There are also advantages to the lender, including earning better returns than banks, helping people directly and also seeing if your investment is moving in the right direction.

There are some disadvantages to microloans though. With being that if your company expands the money available may be insufficient. Critics also suggest that owners of small businesses use their microloans for operating costs, rather than capital investment. This may end up with a never-ending cycle of borrowing.

Commercial Credit

Posted by WFG – June 13, 2011

If you’re the owner of a company then the likelihood is that commercial credit will play a part in growing your company. It will help you manage cash flow despite low cash on hand and is awarded by a bank for commercial commitments.

Despite banks awarding commercial credit, it can also be issued by credit unions. But obtaining it can come from a number of reasons. The main being how long your company has been in operation. If you are a startup company then personal credit will figure more prominently, alongside your business plan. But if the company has been operational for a longer period of time then your previous management of commercial credit will hold the most weight. Be sure to work with your current lender but also research other possible options.

When you receive commercial credit a record will be kept on when you received it. This is completed by a specialized company but you may also keep a credit score yourself, when you first start the business. The benefit of this is that you may file positive reports that will later show up on reports searched by future lenders. Your score will be determined by the overall running of your company, and not just your commercial credit repayment, though a low score may make it harder for you to gain future commercial credit.

For more information and questions on commercial credit contact Winflow Financial Group.