Secured loans are not for the faint of heart nor for the financially undisciplined. It is the kind of loan that needs you to make a commitment and once done there is no looking back. You’re locked into it until the loan is repaid in full (interest charges and fees included) and it is not the kind of loan that you should take if you are heavily into debt because a secured debt needs collateral of some kind, and that could be one of very many things. It could be your home, or it could be your car, some of your stocks or bonds or just about anything else of value to the lender.
Let us assume that you have put up your house as collateral. The grim reality of the situation is that unless and until you make your payments on time you will be forced to give up your home and move out since the lender has every right to forcibly take your home and sell it since you haven’t repaid your debt. The secured bit means that the lender has managed to get himself security of mind while you end up feeling a bit insecure until such time as you clear the debt. If there are any problems, your home can be repossessed and you will be in a mess without much of a hope of getting out of it.
Normally, when one talks about personal loans that are given out either by a bank or a building society we are talking about loans that are unsecured and there is nothing to say that a lender can seize your home if they so want to because those loans by their very nature are unsecured. It is hard to see why someone would want a secured loan over an unsecured loan, but the reasons for that too does exist and secured loans are not without their own merits. For one, the fact that a secured loan is, well, secured means that it makes it much easier to sanction by a bank that has peace of mind. That holds true even if the bank is lending to someone with a poor credit score since the bank holds all the aces.
Another thing is that large sums of money are more readily sanctioned by banks when it comes to secured loans since banks have that sense of security about things. It’s why they will happily sanction loan amounts they would never even consider for an unsecured loan. Moreover, these loans are repaid over a longer time, so banks again readily dispense with these funds since it accumulates more interest even if the monthly repayments don’t amount to a hug amount. All said and done, secured loans are not the best option for someone with debt and the only good reason to use them is to cut debt costs. Using it to fund a new purchase is just folly and such thoughts should not be entertained.
All else being equal, do not turn to a secured loan. An unsecured loan is always the more preferable option in any given set of circumstances.
The world financial markets, as we all know, went belly up of late and investors lost money by the bucketful. Through the course of it all, there were several terms that were thrown about that were treated as worthy of widespread scorn. Among many of these objects of ire and derision were financial derivatives, treated as trading simply for the mere sake of trading and financial speculation pure and simple. They were touted as being completely unrelated to the financial need of any average retail investor, instead becoming symbolic of corporate greed. Of course, in the mad rush of the time and the fury that was there, someone or something had to be blamed for sense to be made of it all and financial derivatives were one of many instruments that were railed against.
But there is more to this than just a beast-like demeanor that caters to its corporate overlords. Ironically enough, the origins have been traced back to being born out of the needs of ordinary people. Farmers in the mid-west were in financial ruin at one point in time during the 1800’s due to a huge degree of volatility in the price of cereals. There were just too many costs involved for farmers that means it became difficult for them to get any sort of money out of their efforts for themselves. The idea then was to use a simple fixed price that offered them a better chance of turning a profit and that was when the first corn contracts were signed on 13th March 1851, the first financial market of its kind. Speculators offered fixed prices in the future, leaving the farmers free to do what they do best.
It took nearly a century before this concept was translated into forward hedging for anything more than the farming community and again, necessity was the mother of invention. As exchange rates fluctuated more than a woman’s moods on a particularly volatile day, there was a need to stabilize things and bring a semblance of sense to the chaos that was prevalent at the time. With time, several layers were added making it more complex than ever, and in the last three decades alone there were options on futures during the ’80s, after which there were over-the-counter swaps and then credit derivatives in the 1990’s and the rise of insurance derivatives by the turn of this millennium.
And so the market kept on growing and it is now the inability of computers to manage risk at the rate of light speed that causes a risk since the markets seem to move at times faster than computers can at times manage. Ultimately, it is the inability to manage risk that must be blamed and not the financial vehicle in question. Financial derivatives have created new ways for risk to be understood, pre-empted and managed and they should be considered an essential part of a well-rounded risk-management program. The ability to manage risk better must not be nullified and that’s where financial derivatives play a key role.
Desc: Financial derivatives should be considered an essential part of a well-rounded risk-management program.
An Initial Public Offering (IPO) is all about getting noticed by myriad groups of investors. The better the awareness and the better the standing and reputation of your company, the better chance your business has of having an IPO offering that is successful. There is this classic bit of Wall Street humor that says the best way to become rich is to buy a dollar for 50 cents, time and time again. And that’s the general idea behind an IPO. You have to look at diverse interest groups such as key institutions, retail investors, the media (don’t you ever forget them) and analysts that make recommendation. You’re not selling stock as much as you are selling the company to these interest groups, and you will want all of them to buy into the idea of buying into your company if you are to achieve any kind of success.
But it’s not all about ensuring success for your IPO. There are a lot of little things going on under the hood when an IPO is issued and you have to make sure that every little facet of the business and the paperwork for the IPO is as it should be, lest the regulatory watchdogs come snapping at your heels. Making equity available to investors is not as complicated a process as some make it out to be, but it is certainly not a walk in the park on a sunny weekend. The team of professionals dealing with IPO support has a core specialization in this field and deep-set industry experience and skill sets that are peerless. Their knowledge and eye for detail can power IPO strategies and help promoters navigate the waters of an IPO process with ease.
The IPO support team at SuperCFO helps promoters to understand the nuances of the process and is their liaison point with all interested parties such as auditors, legal eagles, investment bankers and eventually this culminates in the team helps the promoter prior to and after listing the IPO. All of this is geared towards whetting investor appetite and creating a demand for shares as a company moves from a private company to a publicly listed one that will command media attention. Every company has certain core qualities that will help its IPO succeed and our team will analyze these Unique Selling Points and put it forward in a way that helps you get maximum mileage from your IPO.
In a sense, an IPO is similar to raising a child in that it takes a lot of hard work to make sure the child is ready to face the world’s challenges on his or her own, and you can surely see the similarity of the IPO process to this.
IPO support during an IPO issue is important for companies as it takes a lot of hard work and attention to detail if an IPO issue is to be successful.
Posted in Finance