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Rural Finance and Rural Credit

In a densely populated, metropolitan landscape it can be easy to forget that the majority of India is rural. Finance companies have recognised the distinctive needs of pastoral India and designed schemes exclusively for this sector.

Rural finance is a line of credit specifically intended for the requirements of the agricultural industry. Ranging from mortgage assistance to land development and farming equipment, these credit plans are a significant aspect of rural and semi-urban support. In a country like India, where agriculture continues to play a central role, farming finance is a service closely related to the continued progress of the country.

A number of banks and finance companies have begun to specialise in offering credit to farmers. Appreciated as a key impetus in poverty reduction, this type of support can greatly assist regional development and growth. The creation of a business model that takes the unique needs of non-urban India into account, along with the unique challenges, is the key to success for companies working within this field.

The customer seeking rural credit is often at a lower position on the economic scale. Agricultural assistance must concentrate more on future earning power than the borrower’s current position. As with any loan, the lender should reasonably demonstrate a capacity to repay the amount borrowed, but in the case of credit for farmers, providers are often dealing with lower income groups. Understanding this customer is essential.

Finance in this sector has the added benefit of supporting further work in regional areas. As banks and financial services continue to extend their services into rural India they are generating employment in the vicinity. This employment ensures that customers can relate to the local face of the institution. It also represents a significant basis for skill development.

The conditions surrounding rural business are never constant. Ruined crops, bad monsoon seasons and natural disasters are just some of the ever present, largely uncontrollable factors. Those offering services in this area must commit to supporting their customers through both turbulent and growth patch of time. If this can be achieved, rural finance has a huge market to work in.

An Opportunity For Growth Through Accounts Receivable Financing and Business Factoring

Have you ever seen a great growth opportunity for your business, but had to pass it up because you were unable to finance it? Have you ever looked at a large balance for your accounts receivable, but a much smaller number in your bank account? Have you recently started your business, have it successfully operating, but struggled with ways to finance it to reach the next level?

If you can relate to any of these scenarios, there are alternative financing solutions that you may be able to utilize. As a small company there are many times when traditional financing is not available, cannot be obtained quickly enough or is not sufficient.

Adequate working capital is often the biggest issue facing any business, but especially the small business. One of the reasons most businesses falter or fail, particularly in the early years, is inadequate working capital. Often it is completely preventable by having an increased cash flow through accounts receivable financing or factoring

If your business has accounts receivable from other businesses or government, these are valuable assets that can be quickly turned into cash. It is a process that is centuries old and has been utilized by larger companies for years. It is now available to small businesses and can alleviate cash flow issues. This form of financing is usually more costly than the traditional types of financing, but it is more readily available, more flexible and more opportunistic.

The approval process can be quick and uncomplicated. After filling out a short application, your business, customers and accounts receivables are evaluated. Funding can usually start within a two week period and ongoing funding is available whenever you need it, limited only by your company’s growth. As soon as you issue an invoice, it is verified and funds can be advanced to your bank account usually within 24 hours. Instead of waiting 30, 60 or 90 days to receive payments from your customers, you can have immediate access to cash, usually for 70%-80% of the invoice amount.

Once these funds are advanced to you, they are available to you for whatever you choose. Funds can be used for business expansion, meeting payroll, increasing sales therefore increasing your profit, new product development, purchasing additional inventory, seasonal fluctuations, purchasing at a trade discount, marketing or advertising expense, paying taxes, or buying/repairing equipment. Once your customer makes a payment, you are advanced the remaining funds less a transaction fee.

Factoring and accounts receivable financing can be utilized by many industries such as distribution, manufacturing, and professional services. It is also ideal for more difficult to finance industries such as construction, transportation, staffing and medical.

The best feature of this form of financing is that YOU maintain the control and equity in your company. You do not accumulate any debt, therefore your balance sheet improves. It is an ideal situation to assist in improving or establishing a credit rating. Even though bank loans or credit lines may be less expensive, this is another option to quickly and easily grow your business.

Remember…nothing is more costly than a lost opportunity!

First Time Buyers and Bank Foreclosure Properties

Many more people are considering bank foreclosure properties when buying their first home. These properties are owned by banks who have repossessed them from borrowers who have failed to pay for their monthly payments. The homes are first offered at public auctions but if they do not sell there they become bank-owned homes or real estate owned homes. Banks typically pass on their listing of foreclosed homes to licensed realtors to be marketed and sold.

Buyers of bank foreclosure properties need to be able to have the capacity to finance the homes they will buy. They can either pay by cash or take out a loan to finance the foreclosed home they intend to buy. The first step is to assess your credit score and get pre-approval for a home loan. This can be accomplished by approaching your bank or any mortgage provider to get an assessment and a pre-approval certification. This document will indicate the amount of money you can borrow, which will give you a better idea of the price range of the homes you can purchase.

Your search can be conducted in many ways but online foreclosure listings yield very good results. These web sites have a database dedicated entirely on foreclosed properties across the country. You can customize your search according to your budget and other preferences like location, home type and type of foreclosure, which in this case would be bank foreclosures.

The Purchase

When you have found the bank foreclosure properties to closely consider you may touch base with the property manager, whose details should appear on the listing. They will make an offer to the bank on your behalf and negotiate the purchase. At this point it is suggested that you request for a home inspection at your own cost to assess the cost of the needed repairs. Set aside a portion of your funds for other incidental expenses such as a value appraisal or a title search if they are not being offered.