Best way to Finance Your Home Improvement
Before taking up any home improvement project, a detailed plan should be drawn regarding the extent of the renovation you can afford without taking your financial stability to the cleaners. Focus primarily on the quantum of money that will serve the scale of changes to be made and then make a thorough research on the host of financing options available that will meet your needs. Choosing the wrong type of loan can set you back by years.
What then is the best way to finance your home improvement scheme?
- Upfront cash – This is of course the best but with simple and basic renovation of say a kitchen or a bathroom costing thousands of dollars today, it might take quite a while before you’ve saved enough to go through with it.
- Low or zero interest credit cards – If your credit rating is good and your requirement is minimal (around $10, 000), opt for zero or low interest credit card offers. However, these generally have a short tenure of 18 months so you have to pay off the entire sum within that period. Failure to do so will result in a heavy interest burden.
- Contractors Loans – Many top of the line Home Extension Builders offer in-house financing deals. But ensure that the rates are competitive and extra charges have not been piled on what is offered by the lending agency.
- Personal and unsecured loans – For midsized requirements, go for this channel. Disbursement is quick, there is a long repayment period – usually up to 60 months – and you don’t have to put up your home as collateral. But beware of high interest rates.
- Home equity line of credit – For major renovations costing upwards of $50,000, a low interest high tenure financing agreement is preferable if you have available equity on your home. It is possible to borrow to the full eligible credit limit at prime lending rates.
Weigh these alternatives carefully, compare the amount that you are eligible for and the interest rates being charged and you can be sure that your home improvement project will be what you’ve always dreamt of.
The best start-up is where the founder has a clear vision on what he wants to do because the quantum of funding required to get the concept on rails will depend on it. In the case of a cleaning business there are a few options. First, should the focus be on plain residential cleaning services, the more complex commercial cleaning one or a mix of both. Secondly, should it be a franchisee set-up or a fully owned and operated business. And lastly, what should be the scale of operations in the initial stages – a couple of cleaners along with the owner to start off or teams to cater to a grand beginning.
Once this part is settled, the process of getting the funding has to be initiated. A number of avenues may be explored.
- Own funds – Breaking into your own savings is the most obvious and easiest solution if you have a nice pile stashed away. Even then it’s advisable to look for business funding and keep your nest secured for a rainy day.
- Friends and relatives – Provided your business plan is sound enough you can convince your close friends and relatives to lend at least a part of the amount required. Alternately, you can convince the really near and dependable acquaintances to come aboard as an official investor or partner.
- Government programs – You can avail of loans earmarked by Governments especially for small businesses and start-ups. These have long repayment periods and soft interest component but have a low credit limit. Whether the amount sanctioned will be enough for you depends on the scale of the home and office cleaning services you have in mind.
- Factoring of slow moving invoices – Most industries have a 60 to 90 day payment period and this slow turn around can put a squeeze on your working capital requirements. Arrange for a factor to ensure a smooth cash flow.
The advantage of arranging start-up funding for cleaning business is that it is relatively small due to the low cost of cleaning materials and other necessitates.
All businesses have their own exclusive needs and the same holds true for companies offering services of arboriculture. This is the primary reason why insurance companies design policies that cater to the unique needs of a particular trade and industry. Even in this respect clauses of a policy will not be common or relevant to all sectors at the same time. For example, general liability insurance will have different stipulations and coverage for say a general tradesman and an arborist. It is because of the nature of work each performs. An arborist faces many challenges in his daily work and insurance policies are structured around them.
The art and science of arboriculture is so precise that insurance is available for various types of work they undertake. Thus there is Arborist Insurance, Tree Trimmer Insurance, Plant Cultivator Insurance, Botanist Insurance, Tree Surgeon Insurance and Floral Specialist Insurance. Each activity has its own risks and dangers and insurance coverage has to be in tune with them. There is also Professional Liability Insurance, Workers Compensation and Employment Practice Liability – all of which are applicable to companies engaged in professional plant and tree care.
Again, tree pruning companies in Melbourne own a lot of specialized and costly equipment that need to be insured against fire, theft or other losses. These include tools such as chainsaws, clippers and stump grinders and cranes and other vehicles.
Another aspect that is covered is performance errors made by arborists for which claims are likely to be raised against the company by the owner of the property. This is generally for replacement or repair of trees or plants accidentally damaged in the course of work. Or it might also be reimbursement of cost of repairs to property if damaged during tree removal. These are just a few examples only and not a full list of what might possibly go wrong.
Taking out insurance policies for arborists is a much specialised business due to the unique nature of work carried out by them. Arborists should go through the fine print very carefully before opting for one that suits them the most.
Understanding the Monetary System
Before trying to unravel the secrets of the “monetary system” it will be relevant to have a brief bird’s eye view of what is money. It is a medium that is used to get goods and services in exchange and has taken the world beyond the barter process of the past. However, money is not wealth. The latter is a mix of money, resources and labour while money per se is only a part of a basis for wealth.
What then is the monetary system and how has it evolved over time?
The Gold Standard – In the past the value of money was supported by the value of gold and silver and money could hypothetically be changed to precious metal of equal value in banks. Not anymore. The last country that had gold backing was Switzerland for their Swiss franc but was compelled to abandon it in 1992 after joining the International Monetary Fund.
The Debt Standard – It should first be kept in mind that the right to issue money rests solely on the Government and the Central Bank only makes regulatory policies for its circulation. Today, almost the entire monetary system is backed by DEBT, a promise to pay printed on paper.
What is this debt? Money is created by the Central Bank of a country when it “buys” bonds issued by the Government equivalent to the value of the bonds with these being the collateral. There is no physical transaction. Money so created is virtual in nature.
Similarly, Government borrows money from various sources internally or institutions such as the World Bank or IMF against a promise to pay the debt after a certain period. When it defaults on repayment, either on the principal or interest, the whole monetary system collapses and the nation goes into bankruptcy.
Loss in the Value of Money in the System – When the quantum of money in circulation increases due to monetisation of Government bonds, the money already in circulation diminishes in value. Therefore there is a loss in purchasing power, otherwise known as inflation. In debt standard monetary system, there is no limit to increase in money circulation and more money is created to service past debts. This creates a hyper-inflation scenario where only major reforms can pull the monetary system to normalcy.
Running a rock solid monetary system requires a great deal of complex economic jugglery by financial experts around the world.