December 31, 2007
December 29, 2007
Importance of Trade Finance & Structured Trade Finance for Importers and Exporters of Commodities?
Daniel John asked:
Trade finance is the method importers and exporters of commodities and goods use to finance their business. Basically, trade finance has been in existence for many thousands of years – and one can trace the roots of trade finance and structured trade finance right back to the early days of China and the silk route, Mesopotamia and Europe. Trade Finance was around long before Europeans settled in America and long before the world’s stock markets were born!
Trade finance is the method importers and exporters of commodities and goods use to finance their business. Basically, trade finance has been in existence for many thousands of years – and one can trace the roots of trade finance and structured trade finance right back to the early days of China and the silk route, Mesopotamia and Europe. Trade Finance was around long before Europeans settled in America and long before the world’s stock markets were born!
Today, trade finance is a massive, multi-billion dollar business. As the world trades more and more goods and commodities are bought and sold, so more and more banks and financiers are needed to lend money to finance the purchase and sale of these goods and commodities – right across the global supply chain.
How is trade finance and structured trade finance useful?
Take an example: imagine you are a trader in cocoa beans in Cote d’Ivoire, buying beans locally and selling them to foreign buyers. To make your purchases, you will need to have money to buy the cocoa up-country in Africa, prior to their export. Where will you find money to make these purchases? And supposing you are the international buyer; the shipper, purchasing from cocoa traders all over West Africa – how will you finance your transactions, which at any one time may exceed your cash reserves? What might be supported by your bank who, if they are traditional lenders, will only lend against your balance sheet?
This is where trade finance and structured trade finance is useful – your business can grow and develop if you use the services of a specialist trade finance department who will structure trade finance structures can be tailored to your needs, using the collateral of the goods you are trading, rather than your own balance sheet or other assets.
What is the basis of trade finance and structured trade finance?
Goods and commodities have an underlying value of their own. For example, if cocoa beans are worth many hundreds or even thousands of dollars per tonne, then once a big pile of beans is accumulated in one place; in a warehouse or on a ship, it is worth a lot of money. A bank may lend money against the total value of the beans, minus some amount to take account of price and other risks
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It is the same for every commodity or trade good which is resalable. A bank will make a loan as long as the collateral “adds up” and as long as the bank is comfortable with the way the deal is structured between both the buyer and the seller. Of key importance is that if something goes wrong the bank is able to take possession of the commodities or goods and sell them to realise monies to repay any loan amounts outstanding.
Basically, when we talk of structured trade finance we are talking of deals whereby complex arrangements are put in place to ensure a bank can take possession and sell the underlying capital used for the loan; in this example, the goods and commodities themselves.
Is trade finance complicated?
No. It is a simple business although the structures used in trade finance in more complex deals require a lot of work for all of the parties involved. This is why the total loan amount of a structured trade finance loans must be high enough to warrant the involvement of highly-paid bankers, lawyers and other advisers.
Where can I find out more about trade finance and structured trade finance?
Day Robinson Group has offices in London and New Delhi and is one of the world’s foremost providers of training in the trade finance sector. For more information, you can visit our site at: http:///www.dayrobinson.com or you can contact the author of this article, Dan Day-Robinson at Day Robinson International in the UK (ddr@dayrobinson.com).
December 27, 2007
The Best Used Car Financing Revealed
Sean Patrick asked:
In most cases people shopping for used cars do not have the cash to buy a vehicle outright. They usually are in need of a loan for financing a used car. It is important to remember that you not only need to comparison shop on the price of the car but you should do the same when shopping around for used car financing. It could save you a substantial amount of money in the long run. Before accepting an offer for financing a used car, educate yourself on the particulars of vehicle financing. Using online car loan websites to do research is an easy and effective method. They generally have many articles that offer you car finance help.
In most cases people shopping for used cars do not have the cash to buy a vehicle outright. They usually are in need of a loan for financing a used car. It is important to remember that you not only need to comparison shop on the price of the car but you should do the same when shopping around for used car financing. It could save you a substantial amount of money in the long run. Before accepting an offer for financing a used car, educate yourself on the particulars of vehicle financing. Using online car loan websites to do research is an easy and effective method. They generally have many articles that offer you car finance help.
FINANCING A USED CAR THROUGH A DEALER
What is the difference between getting used car financing from a dealer as opposed to a bank or finance company? Well, for starters, people find the convenience of shopping for a car loan as well as a vehicle at the same place appealing. The process is usually quicker than applying at a bank for a loan. Dealers are more likely to offer auto finance help for borrowers with poor credit than the banks are. They have a vested interest (i.e. the sale of a car) in getting you car finance help. Another benefit to watch for is low % rate vehicle financing promotions on specific models. But in some cases dealership financing can be costlier, especially for borrowers who are uneducated on used car financing. It helps to negotiate the price of the car before discussing the terms of the loan.
TIPS ON AUTO FINANCE: HELP FOR ENSURING YOU GET THE BEST DEAL
- Educate yourself on used car financing so you know what to expect when shopping. Websites on online car finance help in this area.
- Use an online used car financing service to receive quick as well as multiple offers from lenders who specialize in bad credit vehicle financing.
- Comparison shop.
- Become pre-approved using an online lender so that you are at an advantage when it comes to negotiating a price with the dealer.
- Know exactly where you stand financially and only accept an offer that is within your means. Most online sites have budget calculators so that you can break down loans into monthly payments so you know exactly what you are getting into.
- Adjust your loan so that you can make the monthly payments manageable. The longer the term the lower the payments. Leases generally have lower monthly payments. Opt for an older model of the same vehicle so your loan is smaller.
Be smart when it comes to used car financing. When all is said and done, you will be committed to the loan for roughly four years so you want to be comfortable with your decision.
December 25, 2007
December 24, 2007
December 23, 2007
December 22, 2007
Real Estate Investment Trusts
Stephen Campbell asked:
Investment in real estate gives an opportunity to gain good profit for a lot of people. Since investing in a real estate is a great short or long term opportunity, the demands are increasing with each passing day. The price increases substantially over time and this is the main reason for the increasing demand.
Investment in real estate gives an opportunity to gain good profit for a lot of people. Since investing in a real estate is a great short or long term opportunity, the demands are increasing with each passing day. The price increases substantially over time and this is the main reason for the increasing demand.
There are several real-estate investment trusts that are used by people to invest in residential and commercial business of real estate. A group of people form a trust and a lot of mortgages and commercial properties are managed and possessed by them. Investments are made by the trust in several other real estates. These that invest in real estate show the characteristics of stocks and real estate.
A trust that invests in real-estate works like a company and produces income from real-estate like offices, apartments, shopping centers, hotels and warehouses. Though there are wide ranges of property types, most of the trusts that invest in real estate concentrate on just one of the property types. Those ‘trusts’ that are specialists in health care are known as health care real-estate investment trust.
A trust for investing in real-estate was formed in the early 60’s so that it could raise the investment opportunities in real-estate to a great extent. Small scale investors have the right of accessing these investment funds. The advantage of forming a trust is that a person can select a particular amount of share he wants to invest from various trusts instead of investing in a single management or building.
The trust that invest in real-estate can be broadly divided into three types. They are mortgage, equity and hybrid. Mortgage trusts that invest in real-estate offer direct money to the owners of real-estate by purchasing mortgage or loan backed securities. In case of equity trusts that invests in real-estate the management and the ownership is with the trust. The last category of trusts is a combination of the equity and mortgage trusts. The hybrid trusts that invest in real estate not only provide loans to the operators or owners of real estate but also own properties.
There are quite a few differences between trusts that invest in real-estate and limited partnerships. The main variation is that in case of investment trusts the annual tax information should be provided to the investors. However in case of limited partnerships there is no need to provide for the tax information. The second difference is that in case of limited partnerships there is a limit to the amount that can be invested.
However there is no limit to the amount that can be invested by an investment trust. In case a company desires to be a trust that invests in real-estate, the company is bound to share more than 90 percent of the income that is generated and is taxable to all the shareholders at least once a year. When a company is recognized as a trust investing in real estate the dividends that are provided to the share holders can be reduced.
What should i do to become a stock market analyst or a stock market researcher ?
lonappanleon asked:
I want to start a carrer in the stock market, gradually do my MBA and then start a business and probably an investment firm myself. What will be the best way to go about doing this ? Are there any courses i will have to undergo so that i can get into any broking/ investment firm ?
I want to start a carrer in the stock market, gradually do my MBA and then start a business and probably an investment firm myself. What will be the best way to go about doing this ? Are there any courses i will have to undergo so that i can get into any broking/ investment firm ?
December 20, 2007
Easy Buying Van With Bad Credit Van Finance:
Bonnie Castle asked:
Nowadays, your lower or imperfect credit score won’t stop you from buying a van of your choice as loan market is flooded away with the options of bad credit van finance. Bad credit van finance caters to the needs of buying vans for persons who is engaged with bad credit history.
Nowadays, your lower or imperfect credit score won’t stop you from buying a van of your choice as loan market is flooded away with the options of bad credit van finance. Bad credit van finance caters to the needs of buying vans for persons who is engaged with bad credit history.
While purchasing the van, you must be clear with choice, model, price and kind of van that you want to finance. This will help the borrower to know about the amount that he needed at the time of purchasing so that he can make effective use of bad credit van finance option.
With bad credit van finance borrower can finance new or used van depending upon his needs and financial circumstances. Though, borrower can avail bad credit van finance in two forms i.e. secured and unsecured. If the borrower is looking forward for benefits like low interest rate, long repayment term and larger amount then he must opt for the secured bad credit van finance. To avail these features borrower has to place some valuable collateral that fetches him good amount.
In contrary to secured, bad credit unsecured van finance offers options to avail van finance without pledging any valuable collateral against the loan amount. Therefore, borrowers who don’t have or don’t want to place their collateral as security against the bad credit van finance can opt for unsecured.
Therefore, calculative moves and search by borrower might stop him at the point where bad credit van finance requires borrower to pay slightly higher interest rate for the purchase of van. But the interest rate charged on bad credit van finance can be made feasible only if the borrower carries a proper search this has been made possible because of the high competition in the market.
High street banks, financial institutions, leading lenders or online loan market is the places where borrower can search for bad credit van finance. While searching through online, borrower comes across numerous lenders with a single click of button. Today, online mode is considered as the best mode for availing the feasible features against your bad credit.
Bad credit van finance option helps the borrower to avail the van without much bothering about the finance.
