If you've taken the plunge to start a business, first of all, congratulations! Second of all, welcome to the start of a long and challenging journey. One of those challenges is simple: money. There's overhead costs, there's salaries, taxes, and a lot of things that you don't even account for in your initial budget. So likely you'll need a loan. In the world of business loans, there's a lot of noise; first you need to know if you'll be qualified. But how? One place to start is LendingTree.
Before you can find the best vendor for you, it's essential to ask yourself a few questions to determine your best course of action. You'll first need to specify the reason why you need this loan and how it will help your business grow. Then, you need to find the right business loan for you, whether you're a startup or an established business. Businesses with more revenue history have a lot more options for how to get financed, but that doesn't mean that the little guys are left out.
After the initial steps, you need to find the right lender, whether it be through a bank, microlender, or online lender. To see if you qualify for a loan, you have to take into account your credit score, business, and payment history. It can all seem like you're in over your head, unless you go the simple route. Here's why LendingTree is one of the easiest ways to see if you'll be approved for a loan.
LendingTree is a company that will find you the best deal on your loan by giving their customers competing loan offers in just 24 to 48 hours. Here's how it works. Go to their website, click on business loans and "get your free offers." Then select your business type (LLC, sole proprietor, Partnership, Corp, or S Corp) and choose the amount you're looking to borrow (anywhere from less than $15k to over $300k). Enter your business inception date and current annual revenue, then answer a few simple questions about your business history and you'll receive results quickly! LendingTree's network includes loans such as SBA loans, Short and Long Term Business Loans, Working Capital Loans, Accounts Receivable Financing, and Business Credit Cards.
You've already made it so far by establishing your business, so don't let your business fail because you don't know how to properly apply for an affordable loan. LendingTree gives you the tools to save money on loans so you can focus on the important things, like growing your business.
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.