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Guide for Various Type of Loans Against Property

Guide for Various Type of Loans Against Property

A loan against property is exactly what the name implies a loan given or disbursed against the mortgage of property. The loan is given as a certain percentage of the property’s market value. However, loan against property is where you collect the money from the bank by mortgaging your property. Your property acts as a security deposit for the money that is rendered by the bank. And until the repayment of the loan money, the borrower’s original loan documents of the property will be under the banks’ custody. In case if the people fail to pay the monthly installments, banks will move legal procedure to own the loan property.

The loan will be approved by banks only up to 40% -60% of the property value, some banks might even approval loan up to 70% of the property value. Just like any personal loan, there is no restriction on using the proceeds of a loan against property.

How to choose between the two?

  • Processing time: Whenever we opt for this type of a loan, which is obtained by mortgaging the borrower’s property then the lender needs to verify the documents before disbursing the loan. In addition to this, you will be asked to submit documents supporting your income to judge your loan repayment capacity.
  • Interest rates: Being a secured loan, the interest rates of commercial mortgage lender options is usually lower than that of other loans. This can be anywhere between 11% and 16%. In comparison, interest rates of any personal loan can be as high as 24%. The main factor determining the interest rates in personal loans is the borrower’s credit score.
  • Tenure of the loan: The loan tenure can be as high as 15 years whereas the upper limit of personal loan is usually around 5 years. The more tenure of repayment of the loan brings down the EMI payouts, thereby increasing its affordability of the big-ticket loans. However, the flip side is that the longer tenure would also result in higher interest payout.
  • Loan amount: In the case of personal loans, your loan amount will primarily depend on your monthly income and your ability to service the loan. However, whenever you opt for a loan that is against your property, the loan amount will depend on both the market value of your property and your income. Generally, the loan amount in this type of loan ranges between 40–70% of the market value of the property and the maximum loan amount can go up to several crores. In the case of personal loans, the upper limit is usually around Rs.15–20 lakhs.
  • Although taking a loan against your property is a better option than a personal loan in terms of interest rate, loan tenure and loan amount, it falls short in terms of processing time. Therefore, for people requiring funds at short notice, a personal loan will be the only option. Also, the biggest risk associated with this type of loan is that the lender can confiscate your property in the event of your default in paying your dues. Therefore, make sure to self-evaluate your repayment capacity before opting for a loan against property. There are different commercial mortgage lender options which you can opt for.

What Homework do you Need to do Before Doing any Investments?

What Homework do you Need to do Before Doing any Investments?

Now making an investment decision is a wise thing to do. But what is wiser is the idea of doing your “homework” first. This homework if down by you with utmost care will result in long term benefits for you. Now let us have a look at the homework that needs to be done in a stepwise manner so that you make the right investment decision.

The first step

The first step is to figure out how a company makes money. Now the company never depends on just one particular option to make money. It is because the risks are many. There is always a chance of failure of any of the sector on which the company is financially dependent. So it is required that the companies do the proper research to finally understand not one but many other ways of earning money. It may involve making money through manufacturing and selling of products, by participating in the stock market, partnering with other companies, etc.

The second step

Now once you are through with the first step the next thing that is required to be done is to figure out how the company can continue making money. Now, this step is necessary and should not be avoided just because you did pretty well in the first step. It is because in the business industry nothing is ever stable.  Be it a small or a big organization any of these can get bankrupt at any point of time and vanish into thin air. Now f you dependent on a limited source, it may bring all of a sudden a lot of financial burden on you if you haven’t yet widened your options. So you need to figure out ways in which you continue making money other than the conventional method that you’ve decided earlier in step one.

The third step

Now, this step consists of market research. This step will help you in analyzing the various hidden opportunities in the market and then invest in the best company out there. Carrying proper market research will also acquaint you with the threats of the market, so you don’t end up making an unwise investment related decision. This market research is something you can’t and shouldn’t avoid.

The fourth step

Now the fourth step in completing your homework is to check the balance sheet of the company in which you are planning to invest. Go through the annual statement of the company carefully and look out if the company is indebted and if yes then by amount is it so.

The fifth step

It is the final step of completing your homework. In this, you have to make an evaluation which means that you will have to understand the valuation of the stocks. It will help you a lot onto finally deciding as to which company you ultimately want to invest in. And then go ahead with it.

Thus once you have completed all of the five steps, your “homework” is complete. And you will finally come to conclusions as to which company will be better for you to invest.


Why Cryptocurrencies Are Ideal for You As A Trader

Why Cryptocurrencies Are Ideal for You As A Trader

While there were market corrections in the cryptocurrency market, everyone agrees that the best is yet to come. There was plenty of activities on the market which have evolved the tide for the better. With proper examination and the right dosage of optimism, anyone who’s committed to the crypto market can make thousands from it. Cryptocurrency market is here now to remain for the future. Here in this short article, we offer you the key positive factors that can spur further technology and market value in cryptocurrencies.

1. Invention in scaling

Bitcoin is the first cryptocurrency on the market. It gets the maximum amount of users and the best value. It dominates the complete value string of the cryptocurrency system. However, it isn’t without issues. Its major bottleneck is the fact that it is designed for only six to seven orders per seconds. Seemingly, there is an opportunity for improvement in the scaling of deals. By using peer to peer transfer networks together with the blockchain technology, you’ll be able to boost the exchange level per second.

2. Legitimate ICOs

While there are crypto coins with steady value on the market, newer cash is being created that can serve a particular purpose. Coins like IOTA are designed to help the IoTs market exchanging electric power currencies. Some cash address the problem of cybersecurity giving encrypted digital vaults for stocking the money.

New ICOs are discovering effective alternatives that disrupt the prevailing market and generate a new value in the ventures. Also, they are gathering authority on the market with their user-friendly exchanges and reliable backend functions. They can be innovating both on the technology part regarding consumption of specialized hardware for mining and financial market aspect giving more independence and options to traders in the exchange.

3. Clearness on regulation

In today’s scenario, most government authorities are learning the impact of cryptocurrencies on contemporary society and exactly how its benefits can be accrued to the city at large. We are able to expect that there could be reasonable conclusions according to the consequence of the studies.

Few governments already are taking the road of legalizing and regulating crypto marketplaces just like every other market. It may prevent ignorant retail traders from losing profits and protect them from injury.

4. Upsurge in application

There is enormous enthusiasm for the use of blockchain technology in nearly every industry. Some startups are discovering effective alternatives such as digital wallets, debit credit cards for cryptocurrencies, etc. this will raise the number of stores who are prepared to transact in cryptocurrencies which boost the range of users.

The trustworthiness of crypto investments as a business deal medium will be strengthened as more folks trust in this technique. Even though some startups may well not survive, they’ll positively donate to the entire health of the marketplace creating competition and creativity.

As the surprises and bottlenecks around cryptocurrencies reduce, you will see more uptake from traditional buyers. It will likely lead to numerous dynamism and liquidity essential for just about any growing financial market segments. Cryptocurrency can be the defacto money for transactions all around the globe.


Tips for Saving Money while Renting

Tips for Saving Money while Renting

Renting is a great option for people who cannot afford to buy a house or who wish to spend their income in other ways. Although it is a money-saving process in itself, you can actually minimize the spending and add to your savings account while renting. All you need to do is to make and follow a plan for reducing costs, starting with the very first stages of research and up to actually living in your rental apartment.

Here are 4 of the most important steps to take to save money while renting:

  • Spending time on research

It is of utmost importance to take your time and be critical in your research process. Learn to balance your wants and needs and prioritize what is a necessity over what would be nice to have. One of the most important aspects of choosing an apartment is location. You should try to avoid renting close to city centers or near business areas, but you shouldn’t sacrifice a lot of time on commute either. Find a spot that is close to public transportation or offers you a direct route to your job or school. Calculate the distance and how long it would take you to travel from place to place and decide how much you are willing to sacrifice on that.

You can also consider renting with other people. If you find a nice apartment that has more than one bedroom, you can partner up with someone and split the rent. If none of your acquaintances want to join you, there are plenty of reliable apps you can use to find a roommate. It’s easier now than ever to find housemates.

  • Choosing the apartment type

The sheer number of options you’ll find might be overwhelming, but you can easily sort through them. Apart from price range and location, seriously consider what type of apartment is best for you. If you don’t have furniture and you are thinking of buying some, maybe consider renting a furnished apartment for the time being. It could suit you if you plan on traveling to distant places or moving again for other reasons. It definitely varies from one situation to another, but there are pros and cons to both furnished and unfurnished apartments.

Be careful with apartments that have utilities included in the price, because that might backfire. You can control your energy consumption and intentionally reduce costs, which will turn out to be more profitable for you than being tied to a fixed amount.

  • Signing the lease

When you’ve found your new home and the time comes to sign the lease, read the contract very carefully. Ask questions wherever things are unclear and make sure both you and the landlord understand your obligations. Before signing the lease, when you’re checking out the apartment, be attentive to flaws that you can bring up in the discussion and ask for a lower rent. Negotiating rent is a must.

A good idea is to rent long term, because the longer you rent the lower the monthly cost will be. Ideally, one year will reduce the rent while not tying you down and be too much of a commitment. Showcase yourself as a reliable person, even offer to fix things if necessary, and use this to convince the landlord to cut down on your bill.

  • Living in the apartment

After you’ve moved in, remember to keep the same mindset. Adapt your lifestyle in order to save money. Be aware of how much energy and water you consume and reduce that. It’s as easy as turning off the water while brushing your teeth or unplugging the microwave before you leave the apartment. These are minor things you can do and turn them into habits which add up and cut a significant amount off your monthly bill.

If you rent in a busy city like Seattle, you might fall prey to eating out or ordering food on a daily basis. A hectic lifestyle of running from one place to another could make you feel like you have no time, but if you decide to cook for yourself at least once every two days, you’ll not only eat and feel better, but also save a lot of money in the process.

General Rule of Thumb: Follow the 50/30/20 Rule

The 50/30/20 rule is the golden ratio of budgeting. It stands for 50% of your budget spent on needs, 30% on wants, and 20% on savings. Try to adjust your spending habits and fit your monthly costs in half of your salary. Divide the other half of it and try to put aside 20%. The rest of 30% goes to your wants for the month, or towards covering unexpected expenses. It may seem hard to implement, but if you have this rule in mind from the very start, it will be easier to decide and to keep an eye on your budget and discretionary income.

About the author: Mihaela is a passionate reader and writer, with an affinity for language and linguistics, as well as the latest technological developments. She discovered her passion for real estate at RENTCafé, and you can read more of her articles on their blog.


Before Getting A Business Loan, Make Sure You Can Afford It

Before Getting A Business Loan, Make Sure You Can Afford It

If you’re running a small business that’s showing promise for growth and expansion (but you lack the needed funding to move it forward), a business loan may be what you were looking for.

Before deciding on applying for one, though, you will need to determine whether or not you can afford the costs involved.

Knowing the extra costs they usually involve and understanding how repayment commitments could impact your finances is what you need to get rid of whatever apprehensive or dreadful feelings that sometimes come with borrowing money.

If you want to know everything (cost related) beforehand, a business loan calculator can help you big time.

A business loan calculator is as easy as first grade math

A business loan calculator is a simple online device that will provide you information regarding the calculated costs of a loan, the amount of your monthly payments and other critical data.

The steps are simple to follow:

  1. Enter the amount of the loan you’re planning to take.
  2. Enter the number of monthly payments you prefer, choosing from a range of 24-60 months.
  3. Enter the interest rate.
  4. Click CALCULATE. The results from this business loan calculator will show you how much you need to pay monthly and the total cost of the loan (this covers total interest cost you shall have paid at the end of the loan term) with possible some minor documentation fees.

Should the numbers shown by the tool not align to what you have in mind (or should they tell you that you can’t afford the loan), simply click RESET CALCULATOR then put in new, revised entries (perhaps entering a longer term or lowering the loan amount) and repeat the process.

You can revisit your entries as many times as you need until it reflects the numbers you’ll be comfortable with, clearly letting you know you can afford the loan.

Knowing how interest charges work is essential

Interest is the price you pay for using a loan provider’s money. All loans come with it, more popularly referred to as APR (Annual Percentage Rate). Essentially, a lending institution takes the balance of your loan and multiplies it by your APR to calculate the interest cost for each monthly  payment.

Let’s say you take out a loan for $100,000. If your interest rate is 4.01%, it means you will be paying $4.01 per year for every $100 you owe.

However, because your balance decreases over the course of the year, you won’t be paying 4.01% of $100,000 but a slightly lower amount because interest is charged based on the principal’s balance each month.

There’s the yearly interest rate, but how to calculate it per month?

You’d like to know your interest rate per month?

Using the above example, simply divide 4.01% by 12. You’ll then have a monthly interest rate of 0.0033416 or, $334.16 on the $100,000 loan. If your monthly payment is $500, the $334.16 goes towards interest payment and the $165.84 goes to paying the principal.

As the principal balance goes down, so will your monthly interest payments.

What does all this mean? It means that if you can work out a lower interest rate on your loan, you’d be ahead of the game.

3 easy tips to get a lower interest rate

  1. Work towards getting a good credit rating by paying your other debts promptly.
  2. Make extra payments on your loan.
  3. If your credit rating is good, it’ll be smart to negotiate a lower interest rate with the lending outfit. They tend to look favorably on borrowers with high credit scores.

Getting a business loan could well be one of the toughest decisions you’ll have to make as a business owner, but if you do your math (and of course with the help of the business loan calculator), you should be able to determine if, in fact, you can or cannot afford a loan. 

So, why wait? Start planning how to grow your business.


Own a Car? Here are 4 Great Ways to Make Extra Money

Own a Car? Here are 4 Great Ways to Make Extra Money

For most people, their car is a means that takes them to and from a workplace, so they can make money, pay bills, and hopefully have enough saved over for a nice trip to somewhere fun and exciting (don’t forget the travel insurance!).

However, did you know that you can also use your car to make money — and all without quitting your regular job. Here are four great ideas:

  • Deliver Food for Local Restaurants

There are dozens of food delivery companies you can connect with, including Just Eat, Uber Eats, Skip the Dishes, Deliveroo, Postmates, Takeaway.com, Delivery Hero, Grubhub, Doordash, Foodpanda, Swiggy, Zomato — and the list goes on. Each program has its own rules and rates, so it’s worth spending some time to research each option to see what works best for you. Also keep in mind that you may need to upgrade your car insurance.

  • Wrap Your Car

Another fun and profitable way to boost your income — without having to sell anything — is by wrapping your car. There are many car wrap options to choose from, including partial wraps. All you need to do is commit to driving your car in a certain area for a minimum distance (or duration). Plus, you’ll need to make sure that you’re a safe driver and obey the rules of the road — otherwise, instead of enhancing a company’s brand, you’ll damage it! To get started, you can do Google search for marketing and advertising agencies that recruit drivers like you to serve their clients. And don’t worry about damaging your car’s original paint finish, either. A high quality car wrap will actually protect your car from scratches, dents, and UV damage from the sun. How’s that for a nice bonus?

  • Become a Part-Time Courier

Businesses in your area — especially if you live in a larger city — have a big problem: they cannot afford to use conventional couriers to get their packages and documents sent to customers and clients. That’s where you come in! Simply by transporting small packages and envelopes, you’ll make businesses happy and, of course, you’ll boost your income. To get started, check out companies like Yodel, Hermes and Amazon Flex. 

  • Share Your Commute

With the cost of fuel and other vehicle maintenance constantly rising, sharing your commute to and from work is a great way to offset your expenses. Plus, you’ll meet someone who might turn out to be a good friend, and you’ll be helping the environment, too. To get started, check out platforms like Liftshare and BlaBlaCar.

The Bottom Line

Driving is something you do anyway, and your car is basically a sunk expense: you need to pay leasing or finance costs whether you drive it or not, and it’s constantly depreciating (even when you sleep!). The good news, however, is that the four options above can help you make money with your car. What’s more, you’ll probably enjoy it much more than you imagine. Good luck and happy earning!


International Investment: A Look at the US Property Investment Market

International Investment: A Look at the US Property Investment Market

Money

We have heard a lot recently about the relative fall in the UK property market, but how is property fairing elsewhere? Looking into the US property market, there are mixed results.

Amongst some high-profile bankruptcies paired with global economic tension, the US saw economic growth combined with a record-breaking holiday season. This was bolstered by a growth in disposable personal income and heightened consumer confidence, which would imply strong growth across the property sector.  

Retail investment

Investment in retail however is down 6.2%, from $32.2b in 2017 to $30.2b by the close of 2018. The main reason for this fall in investment is largely due to the lack of big-ticket investment deals.

Deloitte report that there will be many new challenges facing retailers in 2019. The industry is set for a major transition, with retailers needing to make bold decisions to succeed in the market.

Residential sales

Residential investment sales paint a very different picture however. Accounting for 51.9% of total transactions in the market, residential investment sales were up 8.9% in 2018 to $15.7b.

A recent poll by Reuters suggests that this growth may not be sustained. Price growth is predicted to drop from previous forecasts, from an anticipated 4.7% growth to 3.7% for 2019.

To reinforce this, sales did slow in the second half of 2018. This is partly due to cooling measures that were introduced, as private rental sales fell by 10.6% at the close of 2018. Economic uncertainty in the US is likely to continue to affect the property sector, with many developers reassessing future development plans.

Industrial sector

Overall, industrial investment sales fell 16.9% in 2018, which occupied 11.3% of total investment sales. Although this figure seems substantial, the industrial performance was mixed, and varied hugely based on the type of factory and location of the industry.

Over the next four years, over 2 million square metres is estimated to become available. However, over 65% of this is owner-occupied, comprising single user industrial developments.

Alternative assets

Much like the UK, we are seeing a different picture when it comes to alternative property assets. Student property investments have seen continued growth, with an increase in applicants applying to US universities. This also translates over to hotel room investments and buy-to-let investment opportunities, though supply is struggling to meet demand in the sector.

Rental yields

Rental yields stayed at about the same level by the close of 2018. Forecasts predict that rental growth will remain stable going into 2019, as retailers adapt to the on-going presence of e-commerce and consumers’ changing preferences.

The takeaway

Overall, property investment was a mixed bag in 2018 in the US. The takeaway is that investors may begin to shift focus into property that is seeing growth, similar to in the UK. The office sector in particular is seeing sizable growth and will be attractive to property investors.


Financial Terms You Must Know

Financial Terms You Must Know

finance

In the field of business and marketing, there are so many people who are quite good at entrepreneurship in general. A majority of them have some or the other kind of built in skills lie communication skills, sales another factors. But no matter how skillful a person is, one has to be aware of the financial terms which are most commonly used in the market.

Now here is a list of some of the top finacila terms that are used in the market on a common basis.

Assets

These are referred to those financial resources that any business entity usually has. These may include things like the products that are there in the inventory, the office supplies and the furnitures that have been purchased. Now these assets will count towards the total value worth the business as they could be sold when the business is going through some serious financial problems.

Liabilities

Now liabilities refer to the debts or the loans that may be on the business which they may have incurred during the initial days of establishing the business. It may have also incurred during the growth and the maintenance of its operations. Examples are bank loans, monies, credit card debts etc.

Expenses

Now the business expenses refer to that cost that is incurred every month by the businesses for the operation of it. This may includes rent cost, legal costs, utility cost, salaries of the employees etc.

Cash flow

The cash flow refers to the mobility of the funds every month that happens through your business. This includes both income and expenses. The cash flow also helps in determining the long term solvency.

Bottom line

This is refered to that final amount which is a summation of all the amounts that have been earned or lost by the end of the month by any business. In general, it is basically the last financial figure and depicts the earning of the business in terms of whether it has increased or decreased.

Financial report

A financial report is a report that is used to depict all the transactions and the expenses that have taken place and thus represent the account in a comprehensive manner. It is created by the potential inventors by both the internal and the external sources.

Financial statement

This is similar to the financial report but it contains the list of all the various kinds of finance related activities that have taken place. Although the financial statement is considered to be relatively a more formal kind of document tha the financial report.

Cash flow statement

As the name suggest, the terms cash flow statement is used to refer to that money that came into the business and that left the business in a given specific duration of time. It is that money which entered and then excited in a given time frames.

Income statement

The income statement depicts the profit earned by a business entity in a given specific period of time.

Balance sheet

The term balance sheet is used to refer to a particular snapshot that is used as an overall representation of the financial situation in a given time frame.


5 Things Every Entrepreneur Should Know About Cash Flow

5 Things Every Entrepreneur Should Know About Cash Flow

There are certain business fundamentals that have remained unchanged for centuries. One such principle is cash flow. Businesses of all sizes and types experience a certain amount of cash flowing in and out of company coffers. How that cash is managed is one of the most critical aspects in determining whether a company succeeds or fails.

Any entrepreneur looking to start a new business absolutely must understand the principle of cash flow. He or she must have a handle on cash flow management even before the idea of financing is ever entertained. Why? Because business lenders are concerned about cash flow. All of the business loans UK lenders offer will be somehow tied to cash flow. The same is true for equity investing, crowd funding, and so forth.

Here are five things every entrepreneur should know about cash flow:

1. The Difference Between Cash and Real Cash

The term ‘cash’ has two meanings in the business world. In general, cash refers to company assets and liabilities that are, for all intents and purposes, liquid. Assets would include money in the bank as well as outstanding invoices representing cash that will eventually be paid. Liabilities include outstanding invoices the company has yet to pay.

The term ‘real cash’ applies to the bills and coins coming in and going out. A restaurant is an example of an all-cash business that deals in real cash. They accept currency, debit cards, and credit cards all representing cash payments. In turn, they pay their suppliers and workers in cash represented by cheques and electronic bank transfers.

The difference between these two terms is important when managing cash flow. Cash flow management relies almost exclusively on real cash for the simple reason that outstanding invoices don’t really have any value when you need money to pay a bill.

2. The Difference Between Cash and Profit

Next is the difference between cash and profit. Cash is a tangible asset you can hold in your hand. It is an asset that can be accounted for on a bank statement. Profit is not an asset. Profit is a measure of accounting. Why does this matter in terms of cash flow? Because it’s entirely possible to turn a profit and still not have any cash.

Accounting principles may demonstrate that a company is turning a profit. But that profit is only based on total revenues versus total expenses. It doesn’t account for outstanding receivables. A company might be turning a profit on paper but still be short on cash due to excessive receivables.

3. Cash Flow is Indicative of Strength

Next, cash flow is indicative of a company’s strength. This is so because cash represents that company’s ability to sustain operations. Remember that cash is ultimately the only thing that pays bills. So if cash is constantly limited, a company is in a more precarious position.

You might be interested to know that buyers give quite a bit of weight to cash flow when considering whether or not to acquire a new business. Smart buyers know that consistently limited cash flow is a sign of internal weakness.

4. Cash Flow Affects Borrowing

The fourth thing entrepreneurs should know about cash flow is that it affects borrowing. You previously read about how business loans are often tied to cash flow. They have to be. A lender takes a certain amount of risk by loaning money to a business. If the business consistently deals with insufficient cash flow, a lender has to question that company’s ability to pay back what is borrowed.

In the end, the fact that cash flow is indicative of company strength means that it also affects a company’s ability to borrow. And because borrowing is a normal part of doing business in the modern era, it’s critical that companies manage their cash flow with borrowing in mind.

5. Budget Priorities Are Affected by It

Finally, entrepreneurs need to understand that budget priorities are affected by cash flow. The best way to illustrate this is to talk about payroll. Where a vendor is likely to allow up to 30 days to pay an invoice, workers don’t extend that same courtesy. They don’t allow employers to operate on credit.

The need to pay workers on time demands there be enough cash in company accounts to make payroll on time. That means other items in the budget might either have to wait or be addressed through credit. An entrepreneur cannot spend all his/her cash and then expect workers to wait to get paid.

As you can see, cash flow is a fundamental business concept on which sustained success rests. If you are going to start a business of your own, make sure you have a handle on cash flow first.


6 Expert Tips for New Entrepreneurs for Buying Business Insurance

6 Expert Tips for New Entrepreneurs for Buying Business Insurance

business insurance

Most new business owners make the mistake of getting the least expensive business insurance they can find online. While a high premium cost doesn’t make sense for budding businesses, getting insurance that provides little to no protection is also not a smart move. To avoid overpaying for insurance you don’t need, the following are 6 expert tips for new business owners when it comes to buying business insurance.

Identify the Risks in Your Industry

Before you call in an insurance agent or start looking for business insurance plans online, you need to know the risks. Insurance companies will check your business independently to evaluate the relevant risk factors. This risk evaluation by insurance companies is referred to as underwriting and it determines whether a business gets approved for business insurance or not. Apart from the underwriting process, which is mandatory, we suggest doing an independent risk assessment to pinpoint assets that need extra protection.

It’s Better to Overestimate Than to Underestimate the Coverage Need

Opting for the minimum insurance coverage can leave you in a false sense of security and can catch you off guard during eventualities. Litigations against businesses can be brutal and can end up costing thousands of dollars in legal fees. Without proper liability coverage, this can take a bite out of the profit. Long story short, it’s better to pay more premium and get adequate coverage than to underestimate the coverage needs and risking your business.

Compare Insurance Prices Online

One of the things you should do before discussing anything with the insurance agents is to compare business insurance quotes online. This will help you zero in on value-for-money deals and smell a bad insurance offer from a mile away.

Consider Getting a Business Owner’s Policy for a Blanket Protection

BOP or Business Owner’s Policy is an insurance plan that includes several different types of coverages. These are perfect if you don’t know the types of risks you need coverage for. The BOP is cost effective as it’s cheaper than getting the coverages individually. Your business also gets coverage from all sorts of eventualities from fire and natural disasters to liability coverage. For most small businesses getting a BOP is enough, others may need to supplement these policies with specific insurance plans based on the nature of their businesses.

Minimize Risks to Reduce Insurance Premiums

Safety initiatives go a long way in reducing insurance premiums. During the underwriting process, the insurance evaluator takes note of all the safety measures employed by the company. A safety measure or lack thereof heavily influence the insurance cost. For example, a high-tech security system may earn you a lower premium rate for plans that cover theft.

Judge a Policy by What it Does Not Cover

While insurance agents often dwell on the benefits of a particular insurance plan they almost never spend enough time explaining the exclusions. All insurance plans have exclusions, these are specific scenarios, that the plan does not cover. The more exclusions a plan has, the more loopholes the insurance companies get to not pay a claim.


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