The high taxation that most countries have placed on petrol have never been acceptable in the USA; Americans expect their fuel to be cheap and they have enjoyed driving gas guzzling cars, SUVs, 4x4s and huge Cadillacs. There was little reason to do otherwise. Gas was cheap, loans readily available at low interest rates and credit easy to come by.
There has been a change on more than one front. Environmentalists have continued to preach the message about the fragile Earth and it has led to more people looking to reduce their consumption of fuel. The economic problems of recent years from which no country has been immune has also changed many people’s outlook on loans and credit, particularly as employment has not been so secure since the financial problems of a few years ago impacted on business.
The Administration is keen for Americans to use less fuel and there are websites that publish the best prices by zip code for many things, including the fuel to run vehicles. While Europe has had traditionally high petrol costs the increases in the USA have met with resistance and every motorist is keen to obtain their gas at the best possible price.
Economizing on fuel can take a little thought. Certainly you don’t want to be going too regularly to the gas station for small top ups; that is false economy because you will find yourself driving more miles than necessary. Equally you don’t want to fill your tank and then suddenly find a real cheap gas price when there is no room in your tank.
There are some incentives for buying fuel efficient vehicles and certainly there has been a change in the spending habits of Americans who are now more conscious that the easy world of easily available loans and credit in general has gone. There are not only incentives to buy more fuel efficient vehicles there is often an advantage in insurance costs for smaller vehicles.
Motor manufacturers are conscious of these changes and stress the mileage per gallon as part of their marketing campaigns. Anyone looking to economize on gas will read the figures closely; it is important to realise that cosmetic modifications such as wings or power improvements from the standard model are all factors that reduce fuel efficiency. It may be worth monitoring gas consumption to check on your vehicles performance and whether it changes over time. If it changes for the worse it is an idea to ask why that should be the case.
There is of course poorer gas consumption with increased speed. Driving at a steady speed with fewer gear changes certainly helps gas consumption and will keep more money in your pocket. Similarly manual transmission is far more economical that automatic so choose your car wisely after you take out your loans for a new car. The difference can apply even more on a used automatic car than a new one. Spend your loans wisely to keep your gas bills down.
Janice Thompson has been writing contents for the last 3 years. She is an online copy writer. She regularly contributes articles on different financial aspects like personal loans, debt, credit, insurance etc.
The Wall Street crisis came towards the end of George W Bush’s second term of Office; few were unhappy to see him go but Barack Obama has still struggled to greatly improve the USA economy. Unemployment remains stubbornly high and many people in need of finance have found problems obtaining loans from traditional sources. Certainly the banks who happily dealt in subprime finance by trading in CDOs are unwilling to consider anything but loans to the people with the best credit scores.
Internet lenders however have gradually taken over the market and loans of all kinds are available for those able to repay the monthly installments.
The Party Conventions have just finished with them having little effect on the popularity of the two parties leading up to the November Presidential Election. They do tend to preach to the converted and are only of interest to the Opposition analysts planning the next weeks of the Campaign. It is an expensive exercise with the Parties looking for funds to support the weeks leading up to November.
There is every reason for a pressure group to support a candidate; the energy lobby, the financial lobby and the environmental lobby all look to back the winner and last month’s contribution figures suggest that it will be Barack Obama who takes the Oath for the second time rather than Mitt Romney, the Republican who has already shown a certain naivety in his dealings with a number of issues at home and abroad.
If Obama does win it will be with the highest unemployment figures for a successful campaign defending a position. Unemployment is running at 8%, two points down from the peak but nowhere near the pre crisis figures. It is very difficult for unemployed people to get loans because they cannot show the lenders how they will repay the borrowings. It means that the economy will remain a major issue in the weeks up to the Election. Unfortunately for the Republicans their economic philosophy tends to leave things to market forces with minimal central intervention. That does not seem to be the way out of the current problems. Added to that is the whole issue of medicare and the Republicans are in need of a change in stance.
Even in these difficult times people need access to loans; emergencies can crop up such as medical and educational bills. Even if ideas of a new car are postponed, it is still important to ensure the present one is repaired and maintained as required. Fortunately online lenders have proved the solution for many people needing a problem solved.
Applications can be done completely online with lenders requiring details of ID, citizenship, address, job and bank. The latter two are the most important as they make out the case for loans by showing how they can be repaid. The two Parties are not looking for loans but donations; there is a payback for the contributors, at least they hope so. That is a sympathetic hearing from the next Administration.
Emerging entrepreneurs find it as a herculean task to get the necessary funding to float a new venture. The days of negotiation with angel investors and lending intuitions to raise start-up capital are gone. Now, people are required to have a first-rate business idea in order to convince the investors and creditors for capital. This will take them a long way in ensuring a smooth flow of funds and keep the business owner debt free. Out of several creative ways of financing a business venture, budding entrepreneurs majority opt for these two fundamental sources of corporate finance – debt and equity finance.
Considering the popularity of the above two systems of business finance, it is important for everyone to know about their basic differences.
Under debt financing a start-up entrepreneur takes out a business loan that has a permanent rate of interest and a maturity deadline. The common principle of loans applies in this regard. The loan payments are made on a monthly basis and the payment amount comprises of both the principle and the interest.
Equity financing involves the process of raising capital for a new venture through IPO (Initial Public Offering) or private placements of stocks. The company trying to raise money from the IPO market must register itself with the local stock exchange. The lenders (or investors) buy a part of the business and act as partners.
In the corporate world, the calculation of a company’s financial agility is known as ‘Debt/Equity Ratio’. A company’s overall debt obligations divided by total equity investments (or stockholdings) reveals the amount of debt and equity used to fund the business.
Debt/Equity Ratio = Aggregate debt obligations/Stockholdings.
Debt financing – Some essential points
This sort of financing is a favorite amongst those small business entrepreneurs who don’t want lose the control of his business. Here are some more interesting facts about debt financing:
- Under debt financing there are long-term loans where payment deadline is of at least 1 year or more.
- There are short-term loans also that have a payment deadline of less than 1 year.
- Lenders do not become partners under debt financing.
- Limited flexibility given to the borrowers in making the loan payments.
Equity financing – Some essential facts
Equity financing is mainly beneficial for an established business corporation. However, there are some provisions in equity financing that appeal to small business entrepreneurs as well. Here are some of the essential facts of equity financing:
- Equity financing prevents getting into debt obligations. However, it spreads out the ownership of the business.
- As a result of several partners or owners, the actual business owner has limited say in the policy decision making process of the company.
- IPO is a costly process of raising capital. Its expense accounts for approximately 20% of the raised capital.
- Private placements of stocks involve huge compliance with the federal laws.
An entrepreneur should keep a proper balance in the ratio of debt and equity financing. Moreover, lenders and investors evaluate a small business venture’s debt-to-equity ratio to learn about its financial resources that can be liquidated to recover the loan money, in the event of payment default.