Author: Bryce Gaila

Understanding Finance

Posted on by Bryce Gaila

Although interrelated; often times people mistaken Finance with Economy, Savings, and Money in general. So, what exactly sets it apart from the rest?

Finance as a discipline, is derived from economics. It involves assessing money and other aspects of the financial systems such as banking, investment, and credit, and can be broken down into 3 smaller and separate categories.

It’s crucial for keeping businesses run smoothly without emptying one’s bank account in the process. It’s also a great way to secure funds for both short and long term investments.

Finance is a part of our everyday lives and it can even make or break us and our businesses

 

Beware of Financial Scams

Posted on by Bryce Gaila
Financing a business may be challenging. Businesses need funds to start up or to expand the existing business. During this pandemic, some businesses need the funds to survive these uncertain times. Securing funds is not at all easy. Financing options will depend on the type of business you own.

The Top 5 Financial SCAMS of 2020 | With Special Guest Meet Kevin

 
Most financing companies will look into your business’s standing. They would scrutinize a business’s performance, market, assets, and a lot more. No matter how difficult it may seem, there will be a right financing company to help with your business. Just be wise to look and ask around. When you feel desperate don’t get lured in a financial company that offers something that’s too good to be true. You may be a victim of scams. Since financing involves money there are many people who fall prey to predators. These predators will take advantage of you and would put your business down.

Fintechs Work Their Way Up To SME Financing

Posted on by Bryce Gaila

Large banks have left lending to small and medium-sized companies to fintech and technology groups. But now they have to realize that their new competitors have grown up. Dirk Elsner on the upward mobility of the new financial companies. 

What is Fintech?

Clayton M. Christensen, who unfortunately died in January, is known to be the father of a classic in management literature: “The Innovator’s Dilemma“. In it, the Harvard professor worked out the thesis that well-run companies prefer to concentrate on the upper end of their markets. There the volumes are large and the margins high. Christensen calls this the “click-in principle” or “upward migration”. Accordingly, companies force entry into high-end markets rather than investing in the low-end area. The lower end is more characterized by price wars and low margins. Managers would find it difficult to find plausible arguments for entering new, poorly defined low-end markets with initially low-profit prospects and possibly even high levels of uncertainty.

Christensen’s approach can be used to explain the observation in the financial sector that many financial institutions do not want to fight for small and new markets with the young fintech. According to Christensen, this can be disadvantageous if such disruptive innovations are underestimated. Today relatively young financial service providers such as Paypal, Wirecard, and Adyen have established themselves, whose valuations are now in the double and triple-digit billion range.

Small start-ups started crowdfunding and P2P lending around the 2010s. Because there were only low returns and the risk of bad investments was high, it was not attractive for established companies to gain resources and budgets in this environment. As a result, banks’ energy was concentrated on customers and products with higher volumes and margins, such as financing business with large companies.

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Fintechs are mobile upwards

The past few years have already indicated the innovators’ dilemma associated with the snap-in principle. While established financial houses are not downward mobile according to Christensen’s thesis, the fintech is certainly upward mobile and work their way upwards from the lower end of their markets.

Let’s stay with the financing for small and medium-sized enterprises (SMEs). When the term fintech did not yet exist, it was only possible to obtain loans of up to 25,000 euros via marketplace lending. Via marketplace lender, often referred to as peer-to-peer financing (= P2P lending), a private individual was able to take out a loan through several other people or institutional investors. Small companies would only receive funds if the founder took out a personal loan in this way.

The segment was unattractive for many banks. According to a study by the management consultancy Barkow Consulting, SME loans for banks show a structural weakness in earnings because the return on equity is on average 2.1 percent lower than the cost of equity. Higher loan volumes and large capital market financing were interesting for banks. Here, the high manual processing work was also distributed over large amounts of financing and even reduced the incentive to process digitization at low average costs.

Over the next few years, institutional investors initially discovered small P2P loans as a lucrative asset class. In large numbers and highly automated, they promised high risk-adjusted interest rates. The high inflow of funds in turn motivated the credit marketplaces to expand credit volumes and target groups. Increasingly high loan amounts could be raised through digitized processes via the loan fintech, which soon also discovered companies as a target group.

The young companies are becoming more professional

Today, crowdfunding platforms like Exporo finance several million commercial properties. The now listed Frankfurt Fintech Creditshelf finances companies with up to 5 million euros. Companies like Crosslend or Acatus bundle claims from small and medium-sized companies and make them fit for the capital market. Platforms such as Compeon, Lendico, Fincompare, Finmatch, and Auxmoney have discovered companies as borrowers, with some of them not acting as lenders but acting as intermediaries.

The examples show how fintech companies are becoming increasingly professional and have cut their way out of a niche with digitized processes into higher market segments and do not stand still here.

Free State of Bavaria Extends Loan Programs To Affected Businesses

Posted on by Bryce Gaila

Companies in the Bamberg-Forchheim region can also be affected by the consequences of the corona virus. The Free State of Bavaria assures the companies of its support and increases the citizenship volume by EUR 100 million. This includes the promotion of short-time work. Companies wishing to apply for short-time work benefits due to the virus must notify the responsible employment agency in advance. This then checks whether the requirements for funding are met. Furthermore, affected companies have access to loan programs from the Free State and the federal government. With these measures, the federal government and the Free State want to minimize the impact of the corona pandemic on the economy.

German authorities work to contain the virus

Short-time work due to the corona virus: Companies wishing to apply for short-time work benefits due to the effects of the corona pandemic must first report the short-time work to the responsible employment agency. This then checks whether the prerequisites for the service are met.

Loan programs and guarantees from LfA Förderbank Bayern: Affected companies have access to loan programs and guarantees from LfA Förderbank Bayern to deal with the economic consequences of the Corona virus. Information is available at LfA Förderbank Bayern . The LfA universal loan is available for the currently necessary safeguarding of liquidity . Tel. 089 / 2124-1000, the LfA funding experts can be reached for general inquiries and specific advice on the funding offers .

ETF for Weed Investment

Posted on by Bryce Gaila

Recently, the ETF for marijuana in Canada investment is increasingly growing and broadly expanding as of these days. There are some ETF to come along and would like to penetrate the cannabis industry. Despite of the favourable response from the regulatory environment, there are five solid weed ETFs that joined the market totalling to six ETFs all-in-all.

It is very nice to say that the cannabis ETF within the US market has a healthy standpoint. But, the major concern is that the return is not as good as expected as the banking explained money and credit. MJ, the oldest marijuana ETF, contributed at least greater than 50% of its value for the past years and for about 52-week it resides on 56% below.

MJ once became a $1.1 billion fund.

As of now, the six cannabis ETF in New York have less than $820 million worth of assets in combination. Knowing this, the probability for the cannabis stocks to soar up again is expected to explode this 2020. It is also within this year that the weed industry would filter out toughest one from weakest.

The Weed ETFs

Below is the list of the ETFs being used in the marijuana industry.

TOKE – Cambria Cannabis ETF

TOKE has a 0.42% annual fee which is the cheapest marijuana ETF circulating in the market. TOKE is managed properly and actively as well. Its management team are performing to prevent the most problematic cannabis stocks.

They also work to hunt for the best value and at some instance, owning US cannabis establishments. TOKE has the goal to invest in about 20 to 50 companies of well-known cannabis establishments. This ETF is also ideal for investors seeking for small stocks exposure. This goal is also based on the eagerness of Cambria for its exposure to wide range of cannabis industry.

POTX – Global X Cannabis ETF

The POTX is a new comer in the marijuana ETF. Its expense ratio for start-up is 0.50%. The good about POTX is that the fund value is attractive. This fund value is dependent on the valuation metrics which is utilized for the analysis of the new weed ETF. Another good thing is that POTX is connected to the growth of the market and legislation updates.

THCX – The Cannabis ETF

This ETF is the third on the list of the US cannabis ETF. It controls around 37 stocks which generally focus on the smaller aspect through an average market value of $372.4 million.

Quick Loans Specific To Your Business Needs

Posted on by Bryce Gaila

In most cases, the traditional channel of corporate credit works for companies looking for additional working capital to finance their business. But there are also situations in which a company must quickly be provided with additional working capital in order to seize an opportunity or to resolve an unexpected emergency.

For such cases, there are fortunately lenders who specialize in providing fast business loans and fast application procedures. In most cases, you will receive a definite answer on the same day about how much you can borrow quickly.

9 Startup Funding Options

The money then becomes available the same day or the day after. This is in contrast to traditional corporate financing through less-favored banks, where you can spend weeks with bureaucratic procedures and slow processes.

Some example situations that call for fast cash business loans

Here are some examples of why a small business needs quick access to a small loan:

  • Suddenly a critical device, machine or part of the company breaks down and needs to be repaired or replaced urgently.
  • Something is missing in the electricity network or in the plumbing and there is an urgent need for work on the company building (maintenance work).
  • The company is growing fast and fast and there is a need for extra workspace. The business premises must, therefore, be expanded (this may also be necessary temporarily to accommodate a few peaks).
  • There is a rare opportunity to gain extra profit. However, extra working capital is quickly needed to seize the opportunity with both hands.
  • There is a possibility to tap into a new geographic market or to start offering a new product line in your existing market. This requires additional working capital in terms of marketing, stock, additional business processes, and so on.
  • So borrowing business money quickly is not only interesting for companies that are in trouble due to unforeseen costs.
  • A business loan without annual figures, free from unnecessary bureaucracy in terms of application, can also be the ideal tool to respond and act quickly when an irresistible opportunity presents itself.

Quick & flexible

Many companies finance their growth and solve their working capital needs in the short term with fast business financing. There are times when quick access to additional working capital, or access to a fast business loan, is critical.

This is to quickly seize a business opportunity and achieve more return on your invested equity. Or borrow money quickly for business is also the perfect solution to tackle a short-term challenge for your company.

Unfortunately, in traditional media, an incorrect picture is often sketched about corporate credits. For example, people often promote that money is the solution for almost every challenge or problem of a company and the more money there is, the better.

The downside of borrowing more than what is needed

It is important to realize that borrowing more money than necessary can be very expensive for small and medium-sized companies. Taking out an overweight business loan (which raises more capital than strictly necessary) can in certain cases even lead to financial problems and even bankruptcy. Even though a traditional small business credit from the bank may be a good option for some borrowers in certain cases, there are also many situations where this is not the case.

It often takes weeks to months of procedures that result from strict application procedures and criteria that make a bank as a lender simply too slow and/or too bureaucratic. In practice, business events call for a quick turn around time in order to be able to meet certain business needs.

Non- Traditional Lenders over Traditional Banks

When unexpected operating costs arise, or when a business opportunity suddenly appears, the local bank may not be the best choice for quickly borrowing business money.

Fortunately for most situations, you can also apply for a fast business loan online via the internet. The advantage is that you can expect a lightning-fast response to your application through this route.

A business lender that offers quick loans, for example, is able to provide a definitive answer to your loan application within a few hours. And once your application has been approved, the money will be available within 24 hours. Talk about borrowing fast business money.