Finance with a little help from your friends

As the finance markets have looked to evolve their model post the crashes of 2008 they have had to find new ways to provide finance to those with irregular credit history.

The biggest issues of the banking crisis on both sides of the Atlantic were around the lending of money to people who didn’t have the means to pay them back or without doing their due diligence on the individuals finances.

I previously written about the rise of short term finance and when that might be an option to your cash flow problems. Another solution that has arisen in the last 5 or so years are guarantor loans.

These have arisen in response to the accusation of making sure borrowers can find a way of repaying, but also represent a way of those with irregular credit history from securing a finance solution when they need it. Here is how they work:

  • You find somebody willing to be a guarantor for your loan who has a more favourable credit history.
  • You place an application for a loan in conjunction with your guarantor. Generally loans are £1000-£10000.
  • Should you be approved you money will be paid to you.
  • If you get into difficulties repaying you loan then your guarantor will be expected to step in and meet the repayments.

This is obviously no small commitment for the guarantor but obvious if you keep up your repayments they need to do nothing more. For you as the lender, it can enable you to access finance you may not be able to do on your own so it can be a useful way to access money should you need it.

Using short term loans to make ends meet

Painted as the bad men of the world of finance, the short term loan industry is lambasted for high interest rates preying on the poor and needy.  But there is a reason this form of finance has come to the fore in recent years.

With high street banks tightening up their lending criteria in light of the financial crisis, options for finance have become more limited.  And often it is not long term finance you are looking for. Often people’s biggest need is the amount to get them through to payday, or to cover an unexpected cost such as a car breaking down. These things are difficult to plan for.

Long term you need to address your finances where possible if this situation occurs, but it’s unrealistic to expect everyone to be in a situation to do so. We live in tough times and it is never the wealthy that suffer when the economy dips!

So there are times when short term loans and short term finance can be a viable option.  Often this will be when an unexpected bill hits at the wrong point in time.  When payday seems a long way away and the payment can’t be delayed.  If you find yourself in this situation many money lenders can turn around cash in 48 hours helping you make it through.

The biggest thing to make sure is you pay off the loan within the agreed period to avoid unnecessary fees. But if you can be honest that the money is coming, it is just a matter of timing, then these short term lenders don’t have to be the bad guy and can help you out of a potentially sticky spot.

They will be the first to admit however they aren’t a sustainable solution, so if this I more than a one off, you need to review your finances and cut some spending out wherever possible.

If you are in need of a sort term lending solution then you can visit Vivus for responsible lending and advice.


Guarantor Loans, how do they work?

As a society we have placed a stigma around debt and bed credit. But having a bad credit history is not a crime and it is also not something which only occurs through reckless spending. We have all made mistakes and misjudgements in our life, or fallen foul to situations outside of our control. And in a decade of financial market volatility even our most our countries biggest financial brains have made misjudgements, so what chance does the common man have?

For those that do end up finding it difficult to get the finances in place they need to a stable future, a new option has appeared on the market in recent years in the form of the guarantor loan.  Where, so long as you have somebody with a preferable credit history to act as your guarantor, you could qualify for a loan even if your credit history is poor.

How does a guarantor loan work?

Guarantor loans are unsecured loans (i.e. not tied to a piece of property) which are generally £1,000 to £10,000 repayable over 1 to 5 years.  So general purpose loans for purchases such as a car, some home improvements or consolidating some debt.

A guarantor loan involved two people.  The borrower who is the recipient of the money, and the guarantor.  The guarantor must be somebody who is not financially linked to the borrower (so not spouse or dependant) but other than that can be anybody who is willing to play this role.  This person effectively acts as the lenders security should the borrower fail to make repayments.

All parties must sign the relevant paper and be in agreement of securing the loan.  Once it is approved and the money made available, the borrower makes regular repayments as with any other borrowing.  Assuming all the repayments are met, the guarantor doesn’t need to do anything.

If however the borrower fails to meet the repayments then the lender will expect to recover the money from the guarantor.

How much do they cost?

Obviously exact rates and costs are dependant on the provider, the amount, the term, and your own personal circumstances. But you can be sure that interest rates will be more competitive than a payday or short term loan, although higher than a standard bank and probably credit card.  So really these are still solutions for those who can’t find them through more traditional means.

If you have a guarantor however they can be a good way to get funds secured and also give you a chance to rebuild your credit rating through paying it back.

Where You Shouldn’t Cut Costs in Your Business

When you are running your own business keeping an eye on your cost base is a key part of determining how successful you are. It’s not about being Scrooge-like and keeping the purse strings tightly clamped, but knowing where you have flex in your costs and where you can contract will be key in managing the cash flow.  And poor cash flow is the single biggest killer of small businesses. You can be as profitable as you like on paper, but if a bill hits and the money isn’t there to pay it then its curtains for you.

If things get really though then you need to know where you can cut and how fast.  The problem is, cut from the wrong areas and you can do more damage than good.  I know from experience that you need to know were to cut to minimise damage but make the changes you need in the short and long term.  Here is where you shouldn’t be looking to cut:

Direct Response Advertising

If you utilise direct response advertising to drive leads, and do so at an efficient rate which brings in sales, don’t even think about cutting. You could cut off the lifeblood of your business and you will feel it in the coming months when you don’t have a sales pipeline to generate income.

Staff Perks….within reason

It depends really how you manage this one.  But removing those little things that cost little, but add an immeasurable boost to staff moral can have a serious detrimental effect. If all of a sudden the free fruit, or payday beers start to disappear then people can start to become disheartened and your business can suffer.

Printing and branding

If you give somebody a poor quality piece of marketing collateral, or a badly printed business card, it reflects on you as a business.  The public facing image your project should be a reflection of how you want people to perceive the quality of the work they can expect from you.  So make sure you invest in high quality printing.

Quality of goods

If you are manufacturing a physical product, then the quality of the components you use is obviously critical to the quality of your end product.  Cutting costs here could have a huge impact on your business in the future.  Save money by all means through strong negotiation, new suppliers, or bulk purchases, but don’t sacrifice on quality.

This is were you shouldn’t cut costs, stay tuned for some tips on where you can.

Saving Money on Business Energy

As a consumer, regularly checking out energy offers to see if you should switch is the prudent thing to do. The energy market is rife for offers and deals which could save you hundreds of pounds a year.  And with the world focus on renewable energy right now there is a lot of disruption which can be used to your benefit.

But when you are a business the numbers become even more serious, yet not as many take advantage of the opportunity to switch, especially smaller businesses.  It’s all too easy to forget about your energy costs and just keep paying the bills when they come in.  After all, you’re a busy person trying to run a business.  Your time is much better spent doing what you do or making more sales right?

Of course the answer to this depends completely on the size, scale and performance of your business. Profitability has too main elements, cost and income. Bigger business who are performing well tend to focus more on the income.  But for a smaller business it is important to focus on both as there is little point in bringing in more income if your costs aren’t under control.

And your Business Energy rates could be a key overhead if you are running a small unit or factory that needs machinery, lighting and heating to be maintained.

Business Energy Saving Tips

Of course, regardless of what rates you are paying you should always be looking at whether you are efficient with your energy use. Some tips to maintain costs are:

  • Use energy efficient lighting fixtures and fittings.
  • Install lighting controls where possible to reduce wastage.
  • Have a thermostat system, ideally one which regulates rooms based on whether people are present.
  • Don’t use inefficient heaters of fan systems to control temperature.
  • Consider solar power for heating your water.
  • Use energy efficient electric motors for any machinery you have to use.

Finding the best Business Energy Deal

Once you had made yourself as efficient as possible there is then the task of making sure you have the best possible business energy provider for your needs. As I mentioned above there are good savings to be made if you are willing to go out and find them.

The countries focus on fossil fuel prices and also our movement as race towards more sustainable energy supplies has meant we are at an unprecedented point in the energy market right now.  The UK went its longest time without burning coal recently and other countries such as Germany are also leading the way in sustainable energy provisions.

In order to find the best deal here is what you need to do:

  1. Get an accurate assessment of your energy usage. Measure it over a year to make sure you are accounting for seasonal variances.
  2. Ring your current provider. Understand what you are paying (the rate and the total) and tell them you are going to consider your options – they may come back with a better deal.
  3. Take this information, including the new offer, out to the market and get 4 competitive quotes. Use an online comparison but also speak to somebody in person, B2B is better done in person.
  4. Make your choice and either stick or switch.

It shouldn’t take longer than a few hours and you could save hundreds if not thousands of pounds a year.  And that could be going straight on your bottom line!

Pensions are not enough

Planning for the future should be a financial consideration for all adults in work. Its importance varies depending on whether you are 25 or 55 but either way, putting something away for our later years is something we should all be doing.

The traditional way people who have done this is through a private pension scheme.  An investment scheme managed by a bank or other financial organisation where you can choose varying degrees of risk for you money, they invest it, and you get a return when you retire.

But the situation with the financial markets in the last 8 or so years has meant that the amount you actually get out of your pension fund is not as guaranteed as it once was.  This is due to less certainty in the financial markets and the funds ability to get a good return on your investment.

Case in point. I have a number of pensions from various sources.  An old one for a previous employment just came through and it has lost money in the last year! I selected a medium risk option in this case and as the fund hasnt performed (I chose the risk!) then I lose out.  Far from ideal but this is the reality of pensions and so we should all be looking at alternative ways to save for the future.

Money put into property, valuable items, ISA accounts, guaranteed savings accounts and other sources could all perform better than a pension in this current climate.  You need to make sure you assess all of your options before thinking a pension is the solution, as even if it performs, it may not be enough when the day comes to retire.

Cost effective ways of advertising your business

When you run a small business every penny counts.  But getting the message out there about your business is critical to its success, and it has also never been more difficult.  As Henry Ford once said:

A man who stops advertising to save money is like a man who stops a clock to save time

Knowing where your money is best spent, and not wasted, is not an easy task. With every advertising salesmen you speak to claiming their solution is the answer to all of your dreams, I wanted to try and put give an unbiased view on where you could get the best return on your advertising spend.

Google adwords

Google Adwords has revolutionised the way businesses advertise in the 15 or so years it has been around.  Opening up the world of online advertising on a cost per visit basis meaning you pay only for people who visit your website, and only when they have searched for your product, it really is the most direct of direct marketing. With no up front costs or barriers to entry, just pick some words you want to appear against, set your budget, and you’re ready to go.

Local Facebook groups

Facebook has spawned a local industries and community sites for even the smallest of local areas where people look for advice on businesses in the local area. It has become a great source of recommendations and sourcing people in need of your services.  And once you engage with the community and begin to provide your services, people will actively talk about their experience and do your job for you. Nothing beats a bit of word of mouth.

Local SEO

Depending on your business size SEO can be very tricky and the fees of  service provider may be out of reach. But more and more searches are now based on a users local area. So making sure you have a listing on Google’s map search is very important so you show up at the right time.  This is achievable without hiring an outside provider and you can register your business here:

Email marketing

Email marketing has been made more and more accessible thanks to providers link Mail Chimp.  If you have a service or product which people buy on a repeat basis then this is definitely an area you should give a go. Just keep them update on a regular basis with news about your company and then when they are back in the market for your product you have a better chance of being front of mind.

Local leafleting

When it comes to cost effective advertising then the digital world tends to win out.  But if you have a local business there is still a lot to be said to landing on the doorstep of your target market with a door drop leaflet of some kind. It can be a great way to get your message out there as at the very least you know that somebody has had to pick up your leaflet and will likely have given it a look.



Cover your Expensive Items & Protect Your Investment

In my recent post I wrote about some purchased which could turn out to be shrewd investment in the years to come.  But obviously you are going to need to make sure these items are covered by an insurance policy should the unthinkable happen and they get stolen.

You could have invested a lot of money in these items but the loss could be greater if they have risen in value.  Were they to rise significantly then your most secure bet is to store them in a safety deposit box at the bank or a similar facility.  If they are a pure investment purchase then this way you never have to worry about your home being broken into or damage through fire or other household issues.

However not all items are just for locking away and watching them increase in value.  Some you will want to use or at least look at from time to time so you get some enjoyment out of owning them.  In these instances it is obviously critical you have an appropriate insurance policy covering them.

Depending on their value your standard home insurance policy may be sufficient to cover them.  All insurance policies nowadays have the option to add on individual items along with their value if you have something specific you want to make sure is covered. This is generally fine for most people.  The odd watch, wedding ring, or expensive purchase is more easily added to your home insurance policy, just make sure you tell them about it.

But if you have something more expensive or specific to insure, this isn’t always the best option.  Home insurance companies are built for scale and to service your everyday man in the street.  So tell them you have a £20,000 watch in your house and expect your premium to sky rocket. Tell you you have three and you may as well forget about it.

For real items of value or those which are investments but you want to keep in the house, you are more likely to need a specialist jewellery insurer who knows more about specific items and will be able to cater for its growth in value better.  They will be able to better tailor a policy based on your collection and also insure them for everyday use should you wear them as well.

Insurance can be a head ache and sometimes feel like an unnecessary expense but if you are making investment purchases, it is a necessity unless you want to risk your life savings going up in smoke.

How to get a better deal on your next car

If you know something about the basics of negotiation then getting a better deal on your next car is relatively easy. Car sales is a cut throat industry and is heavily sales driven. This means three things:

  • They have targets per week, per month, per quarter, per year and so timing is critical.
  • They are competing against other dealers of the same brand as well as other brands. They know this and will do what they can not to lose a sale.
  • As a dealership they have ways of moving sales and money around to hit targets meaning the value of each individual sale is less important.
  • As competition is fierce they have developed other ways of making money – add ons, care packages, mats etc – these are have varying value.

There are also a number of basic principles of negotiation you should consider which will help you get a better deal on your next car.

  • Be prepared: don’t walk in cold without knowing your options.
  • Know your acceptable price range.
  • Don’t decide there and then. Take the offer away, and then bring it back to the table.
  • Have multiple points of negotiation. If you have a single point to negotiate on (price) then it is a zero sum game. Have multiple points to negotiate on so if you lose in one area, you can win in another.

Bringing these two things together, the facts and the tactics, here is how you get a better deal on your next car:

  • Time your visit around the last week of the month or the quarter. Ask questions to try and ascertain if the sales person is on target, spot the desperate one!
  • Go prepared with you options. Alternative cars, comparative deals, trade in values, finance options. Have the information you need to hand.
  • Know the most and the ideal you are willing to pay, but never give this away.  The dealer will have a similar range, your job is to find a point that matches but works in your favour.
  • Never decide on the day. Take your first offer and get tangible offers from competing dealers (on the same brand) and other brands in the same bracket.
  • They will call you back within 48 hours, trust me. Present them with the comparisons and bring them down further.
  • When you are done with price, start on the accessories. If they wont budge any more on price, get the wheels, the mats, the care package. This is where the multiple points come in. Don’t think you are done once you agree the price, otherwise they’ll get you with the add ons.

There is always a deal to be done on a car due to the nature of the market.  It is one area where you can really make the most of being a buyer in demand.  Just keep pushing, you will know when to stop.

And finally, don’t beat yourself up if you think you could have got a better price.  So long as you are happy with the deal you got, that’s all that matters.

Investment purchases

When people talk about investment they generally think about property, shares or savings. But if you don’t want the hassle of a property, aren’t interested in trading, and don’t much fancy the interest rates on offer, what are your options?

There are a small number of things you could buy now, which give you a strong chance of achieving a positive return on investment in the future.  As will all things you will not always strike it lucky, and there is risk in any purchase, but if you get it right then you could be better off than with a savings account.


Whilst you’ll need somewhere to keep it safe.  Gold bullion and Gold coins are a safe enough investment as their value over a long enough period has always increased. If you are looking for a 5-10 year investment then choosing your timing is crucial, however if this is longer term than gold could be a good bet regardless of timing.

100 year gold prices
Gold Prices – 100 Year Historical Chart


Obviously heavily linked to the price of gold and other precious metals, well made, non mass produced jewellery is also something that can be an investment for the future. Doing your research is key and understanding how rare a piece is, but if you can spend the time researching and finding pieces of interest then jewellery can be a solid investment.

Rolex Watches

High quality watches in general can be a shrewd investment, preowned rolexes keep their value and depreciate very little over time. Some even increase in value. As they are limited in number and dated, each has a different unique value based on rarity and time of manufacture. The rarer the model, the more it increases in value.

The other great thing about Rolex’s is that they have a collector network who will pay good money for rare pieces so you will never be short of a buyer. And any high street watch shop will make you an offer for your piece should you wish to sell it.

rolex watch investment


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