Small Business Finance

WASHINGTON (MarketWatch) — The world is in the midst of a banking revolution that has nothing to do with exotic financial engineering. It’s in microfinance, or the provision of financial services to poor people worldwide.
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rTo most people, microfinance means microcredit, or lending to the owners of very small businesses in the developing world. In recent years, though, efforts to extend a wider range of financial services to reach the nearly three-quarters of the world’s population with per-capita incomes below $3,000 — the so-called “base of the pyramid” — have gained significant traction.
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rSince the first microloan was dispensed in Brazil in 1973, microlending pioneers such as Accion International and Grameen Bank — the latter founded by Nobel laureate Muhammad Yunus — have proven that the poor, served responsibly, are excellent credit risks and prudent users of financial services.
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rA surge of experimentation in the last five years, fueled by an influx of investment capital, has demonstrated an equally strong demand from the base for savings, insurance and tools such as bank cards and cell phones to facilitate payments.
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rNew York Times columnist Paul Krugman has said that we should “make banking boring again.” If “boring” means returning to the basics of relationship banking, strong underwriting and transparent products, he’s right. But there is nothing boring about extending service based on those principles to the base.
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r$5 trillion in purchasing power
rThat’s the long-term challenge for the financial industry, from multinational banks looking for new sources of sustainable growth to small microfinance organizations seeking to extend their reach and diversify their services. Statistics show the base’s collective purchasing power currently stands at $5 trillion.
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rScaling microfinance up presents daunting challenges. Chief among them are the high costs of reaching deep into rural backwaters and inner-city slums, and of servicing very small transactions. Meeting these challenges requires creative alliances and cultural insight as well as technical innovation.
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rSome recent successes:
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r– Partnerships for last-mile delivery: In 2001, Brazilian banking authorities introduced the banking correspondent model, a regulatory innovation that has radically transformed access to financial services in Brazil and is being adopted, with regional variations, across Latin America and to a limited degree in India. Brazil allows any enterprise, including supermarkets, lottery kiosks, pharmacies and post offices to act as an agent to one or several banks.
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rIn Brazil today, 95,000 agents are conduits for services such as new accounts, deposits, withdrawals and bill payments. Before the banking agent revolution, almost a third of Brazil’s municipalities had no banking services; now they all do. At least 13 million new savings accounts have been opened.
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rThe agent model may be the single most powerful means of localizing banking services. Banking authorities in Peru report that a bank branch costs about $200,000 to set up, while an agent costs just $5,000.
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r– Technology: One engine of the agent model is the pre-paid bank card and the humble point-of-sale machine, the device that reads your card at the supermarket checkout counter. A point-of-sale machine typically costs less than $100 vs. thousands for an ATM. Customers can use cards at locations with the point-of-sale machine to make deposits, withdraw cash, make a money transfer, and pay bills as well as make purchases.
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rThe pre-paid card model avoids risks of over-indebtedness and the problems of complex fees currently bedeviling the U.S. market. For poor people, liberation from the need to pay every bill in cash and in person at the bank branch saves a tremendous amount of time, cost and risk.
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rAn even more flexible and user-centered payment device has taken off in parts of Africa and Asia: the cell phone. In Kenya, the Philippines and South Africa, millions of cell-phone customers use text messaging to withdraw and deposit cash at the same retail outlets where they buy airtime for their phones. They also use the phones to receive their salary, pay off loans and store money, as well as make retail purchases.
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r– Product design: Microinsurance providers have proved especially creative in designing products tailored to specific cultural needs. In Latin America, many women balk at buying life insurance because they don’t want to enrich their husband’s imagined second wife. “Education life” policies therefore provide benefits in the form of school

There are times when people are in urgent need for money and cash loans are especially designed to provide financial help to those people. These loans are the short term loans which generally do not require any security. It fulfills the urgent needs like medical bill, paying previous debts, etc. And these loans are approved in very short time and can even be availed by the people with bad credit history as well. The finance is meant to provide financial assistance to people who are in urgent need of money and are approved in very short time and the loans amount is actually transferred to the borrower’s account within 24hrs of approval.

Cash loans are generally unsecured in nature and it means that you do not need to place any security against the loan amount in order to avail these loans. Since these loans are short term loans as the loan amount that can be avail is also small. The borrower can avail an amount ranging from £ 1,000 and £ 25,000 with the short term category of these loans. The various factors like credit history of borrower, bank details, repayment ability, monthly income etc. are taken into account while Granting the loan amount. The prerequisites for availing these loans require the borrower to be at least 18 years of age. Moreover it is also required for the borrower to submit your income proof and bank details to avail the finance. These loans carry higher rate of interest as compared to other loans because cash loans are short term in nature and therefore you do not have to place any security for availing it. The people with poor credit history can also avail these loans but the interest rate for them is a little higher.

The finance is beneficial for the people who are in urgent need of money and these loans are approved very easily and in short time period. It can be utilized to meet certain needs like car repair, medical bills, paying debts etc. cash are very helpful for tenants who do not have any property to place as security. These loans therefore can not be availed by those people who do not want to loan risk their property in order to avail. However these loans can be easily repaid since these are short term loans.

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Just saying the word ‘entrepreneur’ should make your heart beat just a little bit faster. An entrepreneur is a business-minded visionary on the cutting-edge of creating a new enterprise. An entrepreneur is someone who can take an idea and add their passion, energy, enthusiasm and know-how to transform what was once a synaptic impulse into a living, growing entity. More than just building a better mousetrap, the entrepreneur uses his ideas and energy to transform the entire mousetrap into industry with his fresh blend of products and services.

Some of the attributes of a true entrepreneur include:

1. Good Instincts
An entrepreneur has good instincts. When they get an idea, they know how to find out if it’s worth pursuing. They know that success likes speed.  Therefore, they don’t sit on their ideas, but they take action right away to see if their idea is viable, or if they should move on to something else.

2. Teachable
The ability to be teachable–to be willing to learn from those who have gone before–to seek wiser counsel these are the hallmarks of a smart entrepreneur. They know that it makes sense to bounce their ideas off of a trusted advisor who will help to moderate their tendency to be impetuous and passionate.

3. Self-confidence
An entrepreneur has enough confidence in herself to ignore the ‘haters’ who will try to talk her out of her idea before it as even becomes a reality. An entrepreneur has the confidence to stick with his ideas even when no one around him has an encouraging word.

4. Discipline and commitment
A strong sense of discipline allows entrepreneurs to remain focused on achieving their goals when the going gets tough. A sense of commitment to nurturing their idea and continuing to take action is what sets entrepreneurs apart from the rest.

5. Determination
How many times can a person hear the word, “No,” yet they still persevere with hard work, creating products, delivering services and planning new ventures.

In this time of great upheaval in the global economy, entrepreneurs are seizing the day and creating their own opportunities. When the concept of “job security” has become such an oxymoron, those who have the entrepreneurial spirit know that they can build their own company and find a way to flourish despite the news of doom and gloom in the traditional job market.

While entrepreneurs can often be largely misunderstood by those well-meaning people in their life, they can always find solace, support and encouragement in a group of like-minded people. If you’re a would-be entrepreneur and you’d like to meet with other entrepreneurs and get inspired, network or share resources you can check out websites such as meetup.com where you can look up your location and find in-person groups that meet at local cafes to discuss their shared interests.

If you are working on developing a business plan, be sure to visit sba.gov, if you live in the United States, to access the free business planning resources there.  

Finally, know that you are in great company. The small businesses formed by entrepreneurs are the backbone of the U.S. economy. Keep on coming up with your ideas and hatching your plans. The world is waiting for your new ideas.

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