Banking Finance

Several agencies of the US government support departments that have mandates to help you increase your export sales and minimize risks with regard to the sales of products and services to Africa. These departments exist within US agencies such as the Export-Import Bank of the United States, the Department of Commerce, and the Overseas Private Investment Corporation. All are supported by a relatively recent law called: The African Growth and Opportunity Act. The African Growth and Opportunity Act (AGOA) was signed into law by President Bush on May 18, 2000 as Title 1 of The Trade and Development Act of 2000. The Act offers tangible incentives for African countries to continue their efforts to open their economies and build free markets.

The African Growth and Opportunity Act (AGOA) has been modified three times to increase exports to Africa.

In the first modification, AGOA was changed in to substantially expand preferential access for imports from beneficiary Sub-Sarahan African countries in several ways: 1) The term “fabric” was previously interpreted by U.S. Customs as excluding components that are “knit-to-shape” (i.e. components that take their shape in the knitting process, rather than being cut from a bolt of cloth); now knit-to-shape apparel will qualify for AGOA benefits. 2) The definition of hybrid cutting was broadened to include cutting of fabric in the U.S. and/or AGOA countries. 3) The volume cap on duty-free treatment for apparel made from fabric made in AGOA regions or, for lesser developed beneficiary countries from fabric made anywhere was doubled. 4) Botswana and Nambia were specially designated as less developed countries.

In the second modification, AGOA’s periods for preferential treatment for African imports to the US were expanded.

In the third modification, known as AGOA “1V” was expanded and liberalized again. In essence, US laws were created to increase US exports to Africa and imports from Africa to the US.

Pursuant to AGOA the US organized a U.S.-Sub-Saharan Africa Trade and Economic Forum hosted by the Secretaries of State, Commerce, Treasury, and the U.S. Trade Representative. The Forum serves as the vehicle for regular dialogue between the United States and African countries on issues of economics, trade, and investment. This fosters a unique cooperation between US agencies, African countries, and US businesses that desire to increase export sales to Africa with minimal risk.

How does this work? It involves the Export Assistance Centers of the US Department of Commerce to assist you with your marketing and sales efforts to Africa and financial support from the Export-Import Bank of the United States to Banks that participate in and finance the export of goods and services to Africa in a variety of programs.

The Export Assistance Centers are part of the U.S. Commercial Services which is the trade promotion of the International Trade Administration (a part of the US Department of Commerce). Their mission is to provide 1) market research in the form of country specific commercial guides; 2) industry sector analysis; and 3) internal market insight reports. They provide trade counsel and advocacy through every step of the export process. They sponsor trade events that promote your product or services to qualified African buyers. They provide introductions to qualified buyers and distributors. They will help settle disputes and negotiate tariff issues. Once described as “glorified matchmakers” they will go as far as possible to help you export safely to Africa- even to the US Ambassador to facilitate these objectives, if appropriate.

And they help with the nuts and bolts of exporting to Africa such as setting up meetings for you with up to 5 prospective buyers per day, selecting drivers, translators and hotels. When you go to Africa to sell your goods or services you will not be making a cold call; you will be meeting with pre-qualified people when you participate in this program- all at a nominal cost to cover the agency’s expenses.

It is necessary for you to actually travel to Africa and meet face to face to successfully export to Africa. This is a cultural necessity. African businesses do not operate like American businesses where we trust negotiations conducted over the telephone and internet, and often transact without ever meeting the buyer or seller.

What exports are needed in Africa? You can read the research reports to find out specifically what is in demand. At the top of the list you will see products that purify water. Africa has a huge water infrastructure need. There is also a great interest in security related devices such as high tech devices to prevent theft of vehicles and increase recovery of stolen vehicles. Textile manufacturing equipment and telecommunications equipment also head the lists. Certain medical devices are also in demand.

What are some of the challenges regarding creating or increasing your export sales to Africa? It is difficult to qualify buyers; there are limited credit reporting facilities in Africa; African companies’ auditing and accounting systems are not “world class”. And it is difficult to ascertain who will actually pay as promised in you negotiations. To minimize these risks it is prudent to work with the Export-Import Bank and their correspondent banks and insurance brokers for international trade transactions to Africa.

There are specific Export-Import Bank standards for short-term and medium term credit; these may be located on their website at exim.gov. Financing guarantees and insurance are available for short term financing in 44 Sub-Sarahan African countries. They facilitate more competitive terms for African buyers. After the US correspondent bank has reviewed and approved you for financing, you can use these guarantees and insurance to minimize your accounts receivable financing risk when extending credit to African buyers. This applies to transactions wherein you have successfully delivered your products or services to African purchasers.

Unfortunately, there presently is no way to insure against contract frustration, also known as transactional risk. In other words, you take the risk of default if a prospective African buyer cancels the transaction before it is completed. You are at risk regarding disputes such as delivery or product specifications until they are resolved. And you cannot avoid devaluation of currency as a political risk either.

On the other hand, commercial risks such as insolvency, bankruptcy and protracted default are covered risks utilizing these programs; also covered are political risks such as war, revolution and insurrection.

The bottom line: you can use accounts receivable financing to export to Africa to increase your sales, minimize risks, and increase your working capital when you work with the appropriate US agencies, their correspondent banks and insurance brokers.

Copyright © 2007 Gregg Financial Services

Banks may not be everybody’s cup of tea but you will not get far in the financial world without a bank account – or more accurately a current account. A bank account is key personal finance building block, not only providing you with a straightforward and secure way of looking after your financial affairs but also enabling you to obtain access to other key financial products such as a mortgage or credit card.

Unfortunately, millions of people still do not have a bank account. If you are one of these people, you should seriously consider opening an account. If you don’t have an account because you have been rejected by banks in the past, try applying again, maybe through another provider or one of the new online players by using a personal finance comparison site.

Some people still prefer the bed to the bank but it is a fact of life that a bank account is a must for people who want to go on and own a home and have access to important personal finance tools such as a credit card.

Bank accounts are also a more secure way to conduct your financial affairs than keeping large amounts of cash at home. And if these points haven’t convinced you, it is a fact that many bank accounts are now far more user friendly than before, furnishing account holders with interest on credit balances (unheard of a few years ago) and a whole array of payment facilities.

When choosing a bank account key factors which you must consider are convenience and cost. In terms of convenience, you need to find an account that will give you ready access to your money.

For some people this may mean an account offering a large number of cash machines near to their home or work or access to a nearby branch. For others, it may mean 24-hour telephone banking.

In terms of cost, you need to compare the cost of operating various bank accounts, both in the black and the red.

A personal finance comparison site can provide full details on all bank accounts offered. Such sites can be an excellent starting point for anyone looking to open or change bank accounts.

Of course, asking friends is also a good way of finding out about banks which offer a good current account backed by satisfactory service.

For anyone choosing a bank account, either for the first time or because of a wish to switch, minimize the risks and efficiently use your resources to fulfill your financial goals by doing finance comparison for each step of your personal finance management.

With the advent of the Internet, even the smallest of businesses can branch out to international sales. Depending on the scale in which the business chooses to move in to, international trade finance may be the logical choice if working capital for such a venture is not easy to come by. There are many agencies and financial institutions that have dedicated complete departments to assisting just this type of business owner.

There are government run programs that can assist in finding the proper backing for these types of enterprises. These are easily located by doing a simple online search for this type of assistance. They are more than willing to answer any questions that a business owner may have regarding international finance for their particular business.

These programs offer contacts with financial institutions that specialize in this type of backing. They are well versed in international money laws, credit and goods and sales protection. With consultants based all over the world, it is easy to get all the information required to branch out in this manner form almost any location.

Each of the websites has a question and answer section to handle the more frequently asked questions. If a specific inquiry is necessary, many have not only email address available there, but phone numbers and hours of operation for those particular departments. There are also downloadable guides on each website to assist with all of the different options available that can be printed out for future reference and comparison.

International trade finance is a very expansive field with many different choices available. This wide of a selection may be a bit overwhelming to some, but there are consultants available to assist the business owner through every step of the process. This includes setting up the financing and necessary forms that need to be filled out.

Many of these forms are available online at the websites. They can be filled out electronically or printed out, filled in and mailed direct. It is a good idea that if these are filled out online, then a printed copy be made anyway for record keeping purposes.

This not only pertains to the small business owner, but larger corporations as well. All of the international trade finance runs through the same government agencies and all are required to adhere to the same set of rules, no matter the actual business size. While large corporations tend to have their own employees that specialize in this, these agencies tend to be geared more towards assisting the small to medium sized businesses that are just starting out in this endeavor.

By searching online, all of the necessary resources can be located rather quickly. These include banks, assistance office and the governing agencies themselves. The websites have all the detailed information laid out in easy to read formats and the forms are readily available. Feel free to make use of the consultants as they are there to help and have a wealth of knowledge in this exact field.

Why would you not consider yourself a business of ONE person? Or your family as a business of 3 or more people? Well that is exactly what you are – “Me Incorporated”, “I Inc”, “We Incorporated”. You truly must consider yourself a small family business. Like any business you have ongoing expenses (mortgage, rent, utilities, groceries), revenue (salary and other income) and major capital expenditures (house, vehicle, vacations, renovations).

Like any good ‘household business’, you need to do some planning. Set out a budget for the year, track your expenditures and retained earnings (savings). Yes, all of this looks, feels and is exactly like a well run business. On My Gosh! Don’t rush out and buy an accounting package to run your household. And no need to take a crash course on accounting or bookkeeping. You can accomplish all your financial tracking and planning requirements with some paper or by using a simple template with your favorite spreadsheet package – Microsoft Excel or even with Open Office.

Just like a well run business, your household budget and tracking your spending is best served using a visible record of events; namely, financial records, bank or check register. It is just like tracking your road trip progress using a map. If you know where you are now, then you will have some idea when you will arrive at your destination. In life, money or finances allows you to get to your personal destinations or dreams. A visible financial roadmap of your ‘Me Incorporated’ finances, mapping your progress, seems logical.

Running your ‘Household Business’, like corporate business, requires a few processes to keep track of your finances:

1) Establish a yearly and monthly household budget. Consider all your expenses – weekly, monthly, quarterly and yearly outlays of money. You will be surprised at the length of this list and all the places you spend your money.

2) Track monthly your actually spending and income against the budget you established in step 1. This will help you see the ‘peaks and valleys’ of spending or seasonality aspect of your expenses. Over time, you will come to know these expense ‘peaks and valleys’ and this will help you maintain a positive cash flow. Bottom line: have money in the bank to pay all your expenses and still have some left over (retained earnings). Your single biggest challenge in running any household (or business) is always having enough money in the bank to pay the bills; especially, the unexpected ones. Having a buffer of savings will help with these ‘peaks’ in expenses.

3) Track all your bank account activity. Track and enter in your Bank or Check Register every deposit, every electronic (ATM, web, PayPal, debit machine) transaction and every analog (check, money order) withdrawal. And reconcile your bank statement every month. Know exactly how much money you have available in your bank account(s).

4) Especially track your spending through credit cards and lines of credit. These are potentially the ‘run away’ expenses. Remember only once a month do you see the visible record of your credit card spending. Compound that with the fact that most people have more than one credit card. This can easily result in multiple ‘spending surprises’ each month. Be diligent in tracking your use of credit card transactions. Breakdown the credit card expenses into their respective budget items – gas, groceries, clothing, entertainment, etc. This will help you separate normal household expenditures from other shopping incidentals. You will come to see your spending patterns and can now make adjustments. Just like your bank account, reconcile your credit card statement every month.

All this personal bookkeeping every month can be done with pen and paper or set up a personal finance and budgeting template using your favorite spreadsheet software. Using an electronic spreadsheet allows for all of the mundane calculations to be processed automatically, reducing monthly reconciliations to a simple 5-10 minute endeavour. Whether you choose an analog or digital approach to your personal finance bookkeeping, these visible records are the most effective way to plan and control your personal finances and reduce one of the major stress points in your life – Your Financial Health.

Finance for real estate is now easily available in India. The property boom is not restricted to the national capital region but it has even transcended to satellite towns and remote semi-urban areas in and around the national capital. The number of transactions in the real estate sector has increased a number of times, making it profitable for the banks and other lending institutions to offer more finance opportunities to the buyers.

In India, the most of the borrowers in home loan segment fall in the first time buyer category. It means that they are either tenants or living with their parents in their ancestral house. As the salaried-class is spreading and emerging stronger than ever, more and more people are becoming capable of buying house. Their need to get finance from banks is being taken care of by all the major players in the market. Banks like ICICI, Standard Chartered, HDFC and all the nationalized banks are offering home loans at attractive rates.

The procedure for taking a home loan is rather easy. You can directly approach the bank or call for a meeting to be arranged with the bank’s loan executive. This can also be done over the Internet. The banks may ask for various proofs like those related to your residence, income, spouse’s income, number of dependants, etc. Based on a number of parameters, the banks arrive at your credit rating and offer you varying amount of loans.

Home loans in India come in various forms inviting fixed interest rate or floating interest rates. There are hybrid loans also that are a middle path between fixed and floating options. The borrower can put a part of his loan amount under fixed rate and expose the other part to the floating rates that depend on market conditions and the interventions by the Reserve Bank of India.

The Internet as a medium of loan arrangement is fast catching up in India. Many websites are coming up that take care of individual and corporate finance for various purposes like buying real estate, investments, business operations, etc. This medium of finance is growing rapidly although it is surely in its nascent age as far as the Indian market is concerned.

Whenever one invests in real estate the most important thing that they have to look for are the finances. Any real estate property be it apartment or other requires huge amounts of money and hence the need of apartment financing. The choice of a particular financing option largely affects the investment outcomes and hence one must tread cautiously in the matter of apartment financing. There are many financing options that one can go for in apartment financing such as banks and private lenders. There are also some prerequisites that one can consider before going in for apartment financing. The traditional methods of apartment financing do not allow much flexibility but with the growth of private lenders there is much flexibility which one can consider in apartment financing.

Apartment Financing Options

Before considering the different financing options one must make sure how long one is going to hold the property and whether the investment is long term or short term because this has important implications in the choice of finance one can get. When one is considering owning the apartment for a short period then one can surely go in for the adjustable rate mortgage or the ARM for short. The ARM apartment financing option offers an interest rate that changes with the index. The initial interest rate in the ARM is more competitive than other apartment financing options. Interest rate fluctuations in the future impact the finances and hence the ARM is important in this regard. Also the maximum interest rate also works as protection for those who hold the mortgage. For those wanting to remain long in the business there is the fixed rate mortgage apartment financing. The rate of interest for the borrowers in this apartment financing remains the same for the whole period of the mortgage and hence it offers the borrowers cost effective apartment finance.

When one goes for the fixed interest rate apartment financing when the interest rates are low all the advantage is for the borrowers since they qualify for the same interest rate until all the loan is repaid. The opposite happens when the interest rates are higher in the market. First time investors must also look for the value of the apartment because it affects the type of finance they will receive. Generally higher the value of the apartment the best interest rates will be got from direct lenders or investment companies. However when the value of the property is smaller one can consider the financing options from ones local banks.

Apartment financing from smaller banks or direct lenders is another important option that one can consider in apartment financing because they offer flexible apartment loans as compared with other reputed banks and lenders. One can have finances like non-recourse as well as partial-recourse loans from the small banks and the direct lenders who are always on the look out for borrowers. In the event of non-repayment of the amount the traditional lenders can claim the property and recover their loan while in the conventional loan the lender cannot claim the apartment for which finance is given but they can claim the property that has been mortgaged as the security for their finances.

Find out more at Learn Apartment Financing

Your decision to have a finance career can be a start of something big for you. According to latest employment and business trends, the growth of the world economy plus the increasing number of people retiring in the next decade will create a demand for finance professionals.

Commercial banking means having an opportunity to work in the areas of financial management, accountancy and auditing, securities, commodities and financial services sales. There’s also an opportunity to work in the area of financial and credit analysis since commercial banks are there to provide banking services to individuals as well as small and large businesses and organizations.

People who work in banking and finance are paid well for the work that they do. Four of the fields that many professionals get into include accountancy and tax, Insurance, investment banking and retail banking. Let’s talk about each of these.

For people to work in accountancy and tax, you need to graduate and get your CPA or certified public accountancy license. To learn more about what you will be doing, many have to complete an on the job training with a legitimate accountancy firm.

The training period is about three years and afterwards, you can continue on staying with them, working for another firm or going into private practice.

Insurers just like accountants need to be licensed. This varies from state to state so you have to study and then pass the exam. Once you do so, your career may get you to sell property or casually insurance and life or health insurance.

You should also take further classes in the future because although you have your license already, rules change and you have to be aware of them.

Perhaps the biggest challenge selling insurance is deciding whether to work for an insurance company or doing this on your own. There are advantages and disadvantages doing both. When you are employed, you get a basic salary while those who decide to work for themselves can only make money earning commissions when a sale is made. How well you do is entirely up to you.

Investment banking is different from regular banking because you are there to raise capital for a company by issuing shares or bonds. Later on, you may even work with a team that advises companies regarding mergers and acquisitions.

Also under investment banking is capital markets. Here, the professional is tasked with trading bonds stocks and other financial products to increase the portfolio of the client.

But before you get into that, most entry levels personnel start out doing research first about certain companies and who are their competitors. Their information is then passed on to the account managers who will then advice the client.

Lastly is retail banking which many of us are aware of because these are the people we meet in the bank from the teller to the bank manager when we need to deposit or withdraw cash and apply for a loan.

Unlike accountancy or insurance, you don’t need to get a license to do this kind of work. You just have to be customer oriented with strong interpersonal and communication skills since you will be dealing with people.

Tax and accountancy, insurance, investment banking and retail banking are the four basic types of jobs for anyone that wants to pursue a banking and finance career after graduation from college. Career progression in any of them is excellent and this can only happen with additional training and at times a license.

This can be achieved by part time study so all you have to do now is weigh your options and then go for it.