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Forex and Forex Accounts

26 Mar

Trading on Forex requires a Forex account.  These Forex accounts can be obtained in any number of places, including on-line.  Once a Forex account has been created through a brokerage house or individual Forex broker, trading can begin.  Methods of funding your account vary from one brokerage house to the next, with some offering Paypal or NetSpend, and others only accepting cheques or money orders. 

Forex currency exchange brokers often offer managed Forex accounts.  These accounts are similar to mutual funds in that multiple people, or entities, invest in a commonly held fund that purchases currencies in larger quantities to assure greater pay-offs.  These funds are managed by the Forex money managers who have proven track records.  This type of managed fund has become a very common diversification method for retirement funds. 

Managed funds offer a way to get into the Forex market without subjecting yourself to the potentially high risk of going it alone.  This mitigating of risk does come with a lower payout due to the cut taken by the fund manager.

 
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Posted in Currency Trading, Forex Trading

 

Reasons to Use Factoring Companies

24 Mar

The benefits or otherwise of using a factoring company depend on the type of company, its size and the purpose for raising the funds. Reasons why businesses opt for alternative funding, such as invoice discounting or factoring, are often related to retaining independence, saving on invoice collection administration and receiving flexible funding terms while enjoying steady cash flow linked to sales.

Small Businesses

Smaller businesses usually have restricted cash flow and larger outlays. Raising finance through venture capital can place unwanted restrictions on a company. Opting to use a factoring service such as Touch financial can provide essential funding, reduce financial hardship, maintain independence and facilitate growth. Financial factoring firms also provide special terms for small business start-ups.

Medium-sized Businesses

Medium-sized businesses may or may not have established credit control capacity and this will determine whether they opt for invoice discounting or invoice factoring. Sometimes, medium-sized companies are struggling because cash flow is tied up in inventory or work in progress; they may also need to purchase equipment or pay salaries. Using invoice finance or factoring can relieve financial strain and provide cash flow through leverage of their sales invoices.

Larger Businesses

Larger businesses usually have their own credit control departments and may use invoice discounting simply to raise finance and maintain control of payment receipts and the sales ledger. Some may use invoice finance and factoring companies like Touch financial to fund the acquisition of property or business expansion, while others may use the cash for research and development purposes.

 
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Posted in Business Finance, Factoring

 

Forex Spot or Futures?

21 Mar

There are a number of different ways to trade currencies, all of which are detailed on forex news and tutorial sites. The two most common ways of trading Forex are futures and spot, the main difference between the two being the amount of time that passes between the agreement to trade and the actual exchange taking place.

A futures agreement is a legally binding contract between the two parties to exchange currencies at a pre-arranged rate at some point in the future. This may seem like a boring way of playing the Forex market, but investors can make huge profits if the currency they have agreed to trade falls in price in the meantime. By buying up more of the currency at its cheaper price and selling it on at the legally binding higher value, investors can make a great deal of money. You can make the exchange before the agreed date, if the two parties agree; this is what usually happens, rather than both waiting until the closure of the contract, which can sometimes be several months down the line.

Spot deals are those which are agreed in the short-term, with the exchange taking place just two days after the agreement is reached between the two parties. The only exception is trading between US and Canadian dollars, in which case the exchange happens the next business day. This is ideal for those who wish to take advantage of a sudden change in the value of a currency, which would allow them to make an unexpected profit. It is also the most popular type of trading among amateur investors, thank to the immediacy of the deals; rather than having to wait months for something to happen, investors can easily make spot trades online through their broker.

 
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Posted in Currency Trading, Forex Trading

 

The three parties of factoring

19 Mar

Invoice Factoring includes a total of three directly involved parties:

•    The debtor (account debtor or customer).
•    The factor.
•    The business or seller that has supplied goods or services. 

A common term used within the context of invoice factoring, representing invoices owed, goods or services, is “receivables”.  Receivables are a financial resource connected with the debtor’s obligation to return money owed, the seller can then sell a number of the invoices at a discounted rate to the factor.  This process transfers the ownership of the receivables to the factoring company.  They will then obtain all of the rights accompanying the receivables.  This method allows the factor to obtain the right to take the payments made by the debtor.  However, they must also accept responsibility for any value lost if the debtor does not pay the full invoice amount owed. 

The account debtor can be made aware of the sale of the receivables and the factor will proceed to bill the debtor and make all the collections.  However, there is another invoice factoring approach called non-notification factoring.  Here the debtor will not be informed, the seller will collect the amounts sold to the factor as normal, serving as an agent of the factoring company.   

The factoring company charges the seller a discount fee.  The discount is based on how long the loan is outstanding.  The factor will also estimate the part of the outstanding bill that may not be received because of non-payment, and this will be reflected in the final pricing.  Ultimately, the factor’s profit is the difference between the price paid for the invoices and the money returned by the debtor, minus any amount that was lost due to non-payment. 

 
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Posted in Factoring, Invoice Discounting, Invoice Finance

 

Why Choose Online Forex Trading?

17 Mar

When you decide to venture into the world of online trading, you have a variety of options available.  You can trade in shares, commodities, forex and even the yields on government bonds.

Why should you choose online forex trading over, say, shares?  There are a number of very good reasons:

Liquidity

The forex market is extremely liquid.  This simply means that there are always buyers and sellers, regardless of the currency pair you decide to trade in.  If you traded in shares, you might sometimes find it hard to get a buyer for your shares, especially if the company is very small and not well known. 

Of course some currencies, such as the euro, GB pound and US dollar are more popular than others.  The major currencies are usually more stable than relatively unknown currencies.  When you start trading, it makes sense to trade in the EUR, GBP or USD rather than in the Zimbabwean dollar, for example.

24-Hour Markets

With forex trading the markets in Japan, Singapore and Australia open long before the UK and US markets.  On the other hand, the US market is open long after the markets in Asia.  You therefore virtually have an open trading desk around the clock.  Wherever in the world you live, the forex market will be available during your working hours.

Low Cost Trading

With forex trading, you do not pay a conventional commission.  There is a cost involved: the difference between the bid and the offer (ask) price, which with many online brokers can be as low as three pips per trade.  This makes it very easy to see at a glance what a particular trade is going to cost you.

Transparent Market

Unlike with share trading, where insider knowledge often plays a role, at least theoretically all traders have the same access to market information in the forex market.  This means that institutional traders do not necessarily have an advantage over the small home trader.

 
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Posted in Currency Trading, Forex Trading

 

Getting started with a New Business Loan

16 Mar

Every business has to start somewhere.  No matter now brilliant or innovative the product or idea, few businesses can get off the ground without some kind of initial investment, and that is where new business loans, or start-up loans as they are sometimes called, come in.  Unless you have a substantial amount of capital behind the business already, securing some kind of finance is going to be the first step in getting started.

As well as new business loans providing the necessary funds to help launch a company with stock and equipment, they can also provide working capital, so the business can survive the initial weeks and months before it begins receiving payments for its first sales or orders.  There are many banks and finance brokers such as Touch Financial that specialise in providing new business loans, while government and other administrative bodies can also be a source of finance.  As well as providing the loan itself, they can help with a variety of advice and other services.

Like normal personal loans, new business loans come in all shapes and sizes, and can be unsecured or secured, either against company assets or the borrower’s personal assets, such as their house or other property.  Unsecured loans can be quicker and simpler to arrange, but they will also attract a higher rate of interest.  Investors will want to see a business plan to check the viability of making a loan, and the ability of the business to repay it in the timescale agreed.

 
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Posted in Business Finance

 

Reverse factoring explained

14 Mar

Reverse factoring, also referred to as supplier finance, is used as part of a flexible settlement system to provide low-cost finance to businesses and suppliers.  As a buyer, the reverse factoring system can allow you to support your business finance, suppliers and maintain stability within your supply chain.  However, supplier finance is usually more suited to large retailers with an immediate need of business finance as well as several suppliers who need paying quickly.

How does it work?
Reverse factoring will provide the supplying party with an early payment on an, either by a bank or an official factoring company, approved invoice.  This will proceed to be returned to the factoring company or bank by the business.  Once a buyer has approved an invoice, the financier will make the payment immediately.  As a supplier, this enables a quick payment of invoices and a low risk/low cost way of obtaining finance.  It is worth noting that although the value of the invoice will be paid ahead of terms, a fee will be deducted from the invoice value. 

 
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Posted in Factoring

 

Online Forex Signals

12 Mar

Facilitating investment and international trade, the forex market involves the exchange of one currency for another. A potentially very lucrative market in which to trade, forex attracts individual and retail traders, as well as large corporations and banks, thanks to its high levels of liquidity.  Fluctuations in the market present the opportunity to trade one currency for another and then sell it back for a profit.

Independent traders often use signals as a guideline of when to trade forex. Forex signal services are often provided by forex brokers and are based on either human analysis or that of a forex robot. Analysis is either fundamental, looking into the potential effect of political and economic events around the world or technical, referring to statistically reviewing historic market activity and the use of currency charts to predict upcoming trends.

The trading of forex is now carried out mostly online, meaning that signals are passed to traders who use a range of modern facilities; common tools include email, RSS feeds and website updates. These are very effective means of communication that enable traders to keep up to date with the rapidly moving market.

 
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Posted in Currency Trading, Forex Trading

 

Trying Invoice Finance

10 Mar

Invoice finance is available for small, medium and large-sized businesses wishing to leverage unpaid invoices into readily available cash to meet a wide range of needs. Firms with established business customers and a steady stream of sales invoices are more likely to be favoured by factoring companies offering invoice finance services.

The Basics of Invoice Financing

First off it is necessary to find and agree terms with a suitable and well-established factoring company, such as Touch financial services. The client company then provides the product or service to its customer/client and issues invoices as usual. An electronic copy of the invoice is provided to the factoring company and it then calculates and pays the agreed percentage of the invoice’s face value, in the form of a loan.

In the case of discounting, the company retains responsibility for credit control and receives payment directly from their customers. With factoring, the factoring company takes over credit control and receives payment from the customers. When a customer pays, the factoring company deducts its service fee and transfers the balance to the company. As the factoring firm processes more unpaid invoices and payments, the funding amount is recalculated and further advances are made to the company.

Why Try Invoice Finance

More companies are opting to try invoice factoring rather than traditional business loans and bank overdrafts.  Companies looking to acquire other businesses can do so independently through invoice finance. Doing so reduces the constraints that external funding and business loans may place on them. Entrepreneurs developing start-up businesses benefit from invoice financing that may be combined with new business loans.

 
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Posted in Business Finance, Factoring, Invoice Finance

 

International factoring explained

07 Mar

The FCI (Factors Chain International) is a large financing network that solely deals with international factoring companies all around the world.  The following information shows how the FCI handles international factoring.

To begin, the exporter signs a factoring contract which allocates the receivables to a suitable export factor.  By doing so, the factor will become responsible for all aspects of this particular factoring operation.  Next, he will contact an FCI correspondent in the country to which the goods are being shipped, and assigns him to serve as an international import factor.  Once the goods have arrived, they will then be reassigned to the import factor, who will be required to investigate and establish the credit standing of the buyer. 

Once shipped, the factoring company that has exported the goods may advance a certain percentage – no higher than 80 – of the total invoice value and assign this to the exporter.  After the sale has been concluded, the importing factor will proceed to collect the final, full invoice value.  The import factor thereby becomes responsible for transferring the funds to the export factor, who will be obliged to pay the exporter the outstanding invoice value.

If the invoice value remains unpaid for over three months past its due date, the import factor becomes obliged to pay the full amount of the invoice value.

Each of these stages allow export sales to be made completely risk-free, as well as allowing the exporter to offer cheaper and more appealing deals to their international customers.

Please note that due to the slow yet significant disappearance of national boundaries, it is becoming more common in the EU for FCI members to handle their client’s business without any additional factoring companies being involved.  However, the FCI’s aim will remain the same, to make international trades as easy for their clients as working with local customers.

 
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Posted in Factoring, Invoice Finance

 
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