Modern Banking and Lending, and the Unfairness of It All

Reading David Moyal’s fate after his bank, a subsidiary of the People’s United Bank in the United States, had withdrawn its funding for his business’ equipment I could not help but think how unfair banks have become. 

David Moyal is an owner of Color-Web, a printing company. He ordered new machinery from Mitsubishi Lithographic Presses (MLP). However, when regulators and shareholders pressured banks to clean up their act, many small business who received financing they erased from their papers by withdrawing their financing.

Moyal’s case had him lose hundreds of thousands of dollars for equipment and had to lay off some employees because of the losses.

I couldn’t help but empathise with him. Banks in the UK have done the same. We’re actually facing the biggest financial scandal in history, and yet banks have the nerve to use regulatory provisions and even reduce the refund of consumers by forgetting to refund penalties incurred because of the policy.

In the end, regardless of how flowery the words of financial leaders are in the world, they are still companies looking to gain profit. But they will still gang up on you in the end. Moyal is still fighting his case against a bank who had kept a secret deal with the MLP, who had returned his bank’s down payment, but still demanded it from him.

Where to Get Small Business Loans?

The current economy provides two options for individual financial and economic growth: either you step up a career ladder or you make your own small business. A career ladder makes you an employee who continually evolves into a leader of the company. As a small business proprietor, you instantly become your own boss and you will need a business loan to begin your business.

If you’ve saved enough capital for your business, you may or may not need to get a small business loans, but in case you do, there are three options for you to get them.

1.     The Banks

Financial institutions and banks still have the best offers when it comes to opening small businesses. However, you’ll need a good credit score to ensure you have a low-interest business loan. If you have an existing business, the business’ records and accounting must hold strong to get low-interest business loans.

2.     Small Business Administration

Every country may have a SBA that regulates and disperses small business loans from financial institutions. If you get a loan from the SBA, you have a loan secured by the SBA, which might have average to low interest rates. The SBA also provides lessons in business management and financial areas of a business.

3.     Online

Some lending companies have used the Internet to render their services. While many small businesses found online loans to be effective, some found the high interest rates to be troublesome. Sure, the financial institution online does not mind your credit score, but you are entailed to pay some high interest rates if you’re not too careful.

The Great Advantages of Financial Management

A small business also has a small budget and most entrepreneurs reserve that budget only for necessary investments. Most business owners skip having an accountant or a financial manager because they think it’s only “added budget weight” and that they can go the process alone. However, that is where they are mistaken. Financial managers can offer a lot for small business just for what seems a large sum for payment. Here are a few advantages of having one.

1.     Knowledge

Good financial management requires good knowledge about the subject itself. Financial managers research on business data, which they later analyse and discuss with you. The viewpoints they share show you the consequences of future actions and if the budget can handle future business objectives. Doing financial management by yourself or with a business partner can be tedious, while a financial manager can give you their complete insight about the business.

2.     Planning

Every company has its own objectives, which they strive to meet by the deadline and a financial manager can help meet these objectives properly. Financial managers outline the income of the business profits that might go to maintenance costs, employee payrolls and potential future investments. Financial managers could also advise owners how to reduce costs while increasing expenditures.

3.     Confidence

A good financial manager is more than somebody who could explain the numbers your company generates; they are also advisers that could help your company become stable in a crunch situation. A company with properly managed finances increases the chance of success and loyalty from employees and its own success.