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Business loans are offered because they serve a purpose. When handled properly, both startups or established brands can benefit from debts as they, though temporary, serve as additional and time-saving working capital.

Let us look into the practical reasons to get business loans:

1. Inventory Replenishment

A business surely knows the demand for its products and services, and it’s a core duty to meet these demands to continue gaining wider patronage and making people into loyal customers. Being unable to provide what your brand stands for yields red flags to achieve the investors’ trust and good conversions.

Inventory replenishment takes part in every business process, and getting a loan to fill up stock is also a usual option. Sure, there are analysts who can guide you about the behavior of customers and the trend of consumption, but you don’t want to skip the sales that peak season promises. Also, you don’t want to deliberately miss that opportunity for a bigger profit from an unforeseen situation.

2. Uninterrupted Cashflow

Fund allocation plays a vital role in determining the life of a commercial entity. The working capital should suffice to run the day-to-day operations and keep the business alive for long. Entrepreneurs are aware of the risks in managing a business, which may cause financial decline. A worse scenario highly follows a working capital that went short.

To mitigate further losses, business loans can reverse the situation. It can immediately patch up a financial emergency that prevents operations delay and allows you to have additional time in resolving the dilemma. However, well-backed studies should support this decision as it can backfire when mismanaged. Until it is necessary, you should keep your financial activities smooth and clean.

3. Equipment Purchase

Innovation is necessary for business growth, and this decision to improve systems does not only include your products or services but also your equipment. There’s the need to add more equipment, change the units, or upgrade what is currently utilized by your company. An example of this is the installation of IT infrastructure or automated processing platforms to pave the way to the dynamic digital era.

Equipment purchase entails a very high cost, which is not surprising. One common way to keep your outfits updated without depleting your company’s funds is by taking a business loan. Consider it as an investment as these can be used as collaterals. It then requires careful decision-making – purchasing articles or tools that can streamline the business process, uplift the brand, and generate more income.

4. Increase in Manpower

People are the greatest assets in the business. Employees accompany you into the journey of growth and uncertainty. They are also instrumental in the performance and future of the business.

If you have seen the opportunity to expand the workforce because it will create bigger returns but you don’t have the resources, a loan is deemed practical. As long as the hiring process goes in line with the revenue goals of the company, the risk is worth it.

5. Business Expansion

Every entity wants to have its brand recognized on a wider scale, establish a strong influence, or even build an empire. This vision takes a lot of work, investments, and financial decisions.

If you see that the company office feels cramped with the growing number of employees or added new equipment, then, business expansion should be carried out. The need for a bigger or newer office doesn’t only address the limits of the current physical location of your business, but it may also improve the turnaround time of the processes or performance of the whole operations restrained by these limits.

GDFI strives to deliver the best experience to all our clients because at GDFI, #ServiceIsTheDifference.

A financial planner will help you construct better, more personalized financial plans to achieve your goals and guide you in saving, budgeting, and investing your hard-earned money. So if you recently decided to hire one, then great for you! Below are three steps to choose a great financial planner.

Pick One Based on How They’re Paid

In case you don’t know, there are three basic ways advisors get paid: commissions-based, fee-based, and fee-only.

Commissions-Based Financial Planners

Fee-Based Advisors

Fee-Only Financial Planners

These include brokers, registered representatives, and insurance agents. Commissions-based advisors focus on selling products like mutual funds, insurance, and annuities, and large financial institutions usually employ them. They are great people to hire if you want in-depth insights into these large companies and get great tips on how to avail and manage financial instruments. However, keep in mind that they’ll most likely promote their products while advising you.

While relatively new in the financial industry, fee-based planners can assist you in achieving financial independence. Not only do they offer their knowledge and expertise, but they also sell investment or insurance programs for a fee (since most of them are affiliated with brokers or agents).

But if you want a more comprehensive financial plan, best hire a fee-only advisor. Unlike fee- and commission-based planners, they won’t sell you any financial products, and they’ll act in your best interest. And instead of making a living through commissions, they earn through flat fees or hourly rates.

How financial planners are paid somewhat influences how they’ll serve your needs. So best pick someone who has your best interest at heart.

Determine How Much Help You Need

Next, you need to decide how long you’re going to hire a financial advisor. Depending on your current financial situation, you can choose from the following:

Hourly Consultation

Comprehensive Financial Planning

Asset Management

If you have any inquiries about a specific financial issue (e.g., buying a house, funding a business, or paying for medical schooling), then best go with a financial planner that offers hourly consultation. Since they charge by the hour, you’ll be able to have a total cost estimate based on the scope of work necessary.

Meanwhile, advisors who specialize in making comprehensive financial plans either charge per hour or ask for a flat fee. Either way, they’re great if you want a one-time roadmap to help you meet your money goals and achieve financial independence.

But if you want someone who can help you take care of your assets, best hire a long-term financial planner. Not only will they help you maintain and grow your assets portfolio, but they’ll also help you craft a financial strategy that will set you for life.

Choose the Planner with Positive Traits

Lastly, look for the following when checking out a list of prospective financial advisors:

Credentials

Ethics

Experience

Compatibility

Ask for their licenses and certifications, particularly their CFP, CPA, CFA, and ChFC credentials. If they can’t present any of these, then best look for someone else.

Look for criminal charges, investigations, or any ethical or legal issues in your candidates. Pick the financial planner who has none.

Check if they have the experience to deal with the financial situation you’re facing. If they can’t handle it, then they’ll waste both your time and money.

Find a financial planner you’re comfortable working with. After all, they’ll have access to some of the most intimate details of your financial life.

Conclusion

Buying a new or secondhand car can be challenging. Luckily, numerous auto financing programs are now available to help you obtain that much-awaited ride. Now one of the biggest decisions you’ll have to make when considering car loans is whether you should get it from the bank or go elsewhere. Below is a list of reasons why it is better to finance a car through a bank.

They Offer More Competitive Rates

Banks have to dish out favorable rates if they want to gain more customers and fend off their competitors. Generally speaking, banks are free to determine whatever interest rates they want for their lending programs. But for their own sake as well as our own, they don’t set them too high.

Take advantage of this fact, and get auto financing through banks. Not only will you be able to save money in doing so, but you’ll also be able to have access to lots of perks, discounts, and other benefits in the process.

They Give More Personalized Services

Another reason why it is better to finance a car through a bank is because they can offer you more personalized services. Many lending companies now-a-days offer their programs online. And although this can make the entire process faster, it can also make your experience feel less personalized and more mechanical.

Banks need to cultivate relationships with their clients in order to retain them longer. To that end, they take great lengths to ensure that their customers’ needs get taken care off in the most personalized and tailor-fitted manner possible. Yes, they also have online platforms, but they’re mostly used to ease up the process.

They Provide Better Payment Terms

Banks also give out nicer repayment terms to help out the people who loaned money from them. This not only helps their customers afford their lending programs better, but it also has the added benefit of minimizing interest charges, your monthly payments, and other loan-related expenses.

You need to choose the car financing program with the best payment terms if you want to properly manage your expenses. Yes, great payment terms can also be found in private lending companies, credit unions, and elsewhere. However, most of the best deals come from banks.

They Can Pre-Approve You

Getting your car loan application preapproved has several benefits. For one thing, it helps you estimate the amount of money you can borrow. It will also help you predetermine the payment terms and interest rates you’ll receive, among other things.

One of the worst things about getting pre-approval online is that it leaves your personal information vulnerable. Banks have better facilities for pre-approval than other lending entities. Aside from being smoother yet intensive, banks will also be able to protect your privacy and secure any of your information (which you need to give out when you apply) more effectively.

They Won’t Pressure You

Last but not least, banks won’t pressure you into buying a car. Dealers might hand you over to one of their financial partners to close a deal, but not banks. Instead, they’ll discuss their lending programs to you. Then they’ll ask for certain information so they can lay out a personalized program that will help you buy your dream car.

Making an emotional decision when buying a car or applying for a loan is a very foolish thing to do. By going to banks, you’ll be able to avoid doing such missteps and make better, more objective financial choices.

The Takeaway

For many Filipinos (or everyone else for that matter), saving money is easier said than done. Through effort and proper planning, however, you can achieve precisely that. And to make your journey a bit smoother, here’s a list of top 10 tips to save money for hard-working Pinoys.

1. Keep Yourself Healthy

Getting sick always sucks, especially if you want to save money. So if you’re going to have an abundant financial nest come retirement day, you’d better start taking care of your health (physical and mental). That means eating right, exercising regularly, and getting enough sleep, among other things.

2. Bring a Water Tumbler

Buying bottled water too often can gradually take its toll on your savings if you let it. By bringing a water tumbler with you whenever you go out, you’ll be able to avoid such expenses as well as do your part in minimizing plastic waste.

3. Eat Home-Cooked Lunch

Bringing packed lunch to your workplace won’t just help you save money, but it will also allow you to enjoy your meals more (since you get to eat whatever you want). Additionally, doing so helps you stick to a diet regime (if you’re following one), thus allowing you to achieve weight and health goals.

4. Commute to Work

Driving in and around Philippine highways is hellish, to say the least. And that’s not even mentioning the toll fees, parking fees, gas expenses, and what-not. So instead of bringing a car to work, best take advantage of the country’s public transportation.

If commuting is not an option, you might want to considering getting a used car financing.  Check our article about car financing for first timers and how to get approved for that car loan.

5. Leave Your House Early

Speaking of commuting, you should leave your house as early as possible. That way, you’ll be able to avoid the country’s rush hour, allowing you to save time alongside money. Plus, going to work early is more comfortable since the sun hasn’t risen yet.

6. Create a Budget Plan

Keeping a realistic budget helps you save money more strictly, since it gives you an opportunity to set aside a certain amount of your salary for that particular purpose. And it’s relatively easy to do. You can write it in a notebook or even use a smartphone app.

7. Track Your Spending

And while you’re creating a realistic and detailed budget plan, you might as well find ways to track your spending. That way, you’ll be able to follow your budget correctly, as well as check yourself for any unnecessary expenditures. Luckily, many smartphone apps developed to help users plan their budgets can also be used to track spending.

8. Buy in Bulk

Believe it or not, buying stuff in bulk will actually help you save money. That’s how sari-sari stores and online sellers make a living, after all. Look for shops and stores that offer discounts for wholesale purchases, like Puregold, Super-8, and San Roque.

9. Consolidate Your Debts

Debt consolidation offers you a very effective way to save money, especially if you’re currently carrying a couple of high-interest credits. Not only will it help you reduce your monthly dues, but it also makes it easier for you to return the money you borrowed. Moreover, it’s a great way to boost your credit score, which will be useful for future loans.

10. Build Passive Income

A passive income allows you to earn money without working. By building passive income sources, you’ll be able to save more money and achieve financial independence. Examples of passive income ideas include renting out a spare room or house, getting dividends from stocks, and relying on affiliate links.

Save Money By Following These Tips

As a hard-working Filipino, you should do whatever you can to protect the money you worked so diligently to earn. Following the tips listed above will help you do that, and it will help you lead a more financially comfortable life in the future.

How does a car loan work for you? That’s one of the most important questions you need to ask when considering getting a car through auto financing! Vehicles are fast becoming a necessity these days, and you’re probably wondering how getting a loan will help you acquire your own set of wheels. So to help you out, below are 5 things you need to think about.

You Can Save Money on a Car Loan

You’re probably applying for a car loan because you don’t have enough cash to purchase an auto up front. But even if you’re rich enough to fully pay for a car in one go, you would still do better through loans. That’s because there are tips that’ll allow you to save money through auto financing, such as getting a shorter loan term, improving your credit score, refinancing your loan, and paying early or more, among others.

Car Loans are the Same as Secured Loans

You may not realize it, but a car loan is just another type of secured loan. For those who don’t know what that is, secured loans are loans wherein you present an asset (like a car) as security payment. Failure to settle the loan will result in your vehicle getting seized by the moneylender. Anyway, when you take out an auto loan, you’re practically pledging the car you’re buying to the bank or lending company. In short, you need to return the money you borrowed so you can fully own the vehicle. Otherwise, the lenders would take it from you.

Longer Terms Can Cost More

Another thing to keep in mind when learning about how does a car loan work for you is that the longer repayment terms tend to be pricier. Aside from having to pay for the monthly interest that comes with loans, you’ll also have to deal with the fact that a vehicle will incur costs as time passes. That means you’ll have to make room in your budget for your monthly obligations to the lender, as well as for car maintenance and repairs. So if you want to minimize your car loan expenses, best get a shorter repayment term.

You Can Still Get a Loan with Bad Credit

While you need to have a great credit score to have a car loan application approved, that doesn’t mean people with poor to non-existent credit history can’t avail auto financing. In fact, many banks and lending companies provide programs that offer financial assistance for people who want to build up their credit scores. Car collateral loans are also available for those who are willing to pledge any of their additional and unused assets as security. Keep in mind, though, that having low to no credit score might increase your chances of incurring unfavorable interest rates.

Banks Aren’t Always the Best Loan Providers

No need to worry, too, if you can’t find any banks that would approve your loan application. There are other channels that offer auto financing. Take auto dealerships for instance. Many of them have in-house financing schemes to enable their customers to buy their merchandise. Others have partnered with lending companies that will provide similar services to their clients. You can also get car loans elsewhere, including credit unions or cooperatives and private lending firms.

The Takeaway