How to Calculate How Much Capital Loans You Need - Every type of business will certainly need a lot of funds and capital to be able to grow and develop. There are many ways to get a lot of capital, from filing loans to banks to capital loans from P2P Lending. But how much funds are actually needed? Calculating how much capital loans are needed is indeed not easy.
You might think of asking for more funds than you actually need, assuming that it will help you in the long run by having extra capital. However, more funds means having to work longer hours and more difficult in returning the money to investors. Of course, borrowing funds according to business needs will be more profitable.
However, if you are confused about calculating funding requirements, then here are some tips that can be practiced in order to find out what funding is really needed.
How to Calculate How Much a Capital Loan You Need
1. Determine the Purpose
When making a financial plan, make sure the business goals are set. Is it just to build a brick shop or to create new products. Set goals as detailed as possible when presenting your goals.
This will help you focus on what you really need to be purchased to achieve your goals. Think of financial plans which are then converted as a form of budget; This will provide clear guidance on what to do.
2. Determine the Planned Timeline
The financial plan must be accompanied by a planned timeline. Do your best to estimate the grace period for sub-goals that you need to achieve on your way to your main goal. Think of this as a tactic that needs to be developed to achieve a long-term strategy. Planning a grace period will also make it possible to better calculate capital requirements. This will encourage you to see periods that might force you to spend extra funds.
Consider the time period when more capital will be needed to fund a new project or create a new product, then suggest accordingly.
3. Calculate your financial needs
After creating goals and set deadlines, be prepared to calculate your financial needs. Include everything needed to achieve your business vision. There are three different capital categories, namely; fixed capital, working capital, and human capital.
Fixed capital consists of durable goods, usually used during the operational period. Plants, tractors and factories are examples of fixed capital. Usually, fixed capital is expensive and not liquid, but it will be very necessary to support your business operations.
Working capital consists of disposable producer goods, such as raw materials, work in progress, and fuel. Whatever is used in an act of production is considered working capital. Because of its characteristics, working capital can be more difficult to manage. So prepare well when calculating how much capital you need.
Human capital can be easily defined as people who work for your company and their respective skills, educational background, health, and others.
Like fixed capital and working capital, spending on human capital needs to be as detailed as possible. Payroll costs, budget for more human resources, etc. - record everything and make a range of costs.
Planning how much money is needed may sound very time-consuming, but believe that this will help you have a more thorough preparation over time.
Once you get the needed capital loan, you can also re-evaluate the existing calculations so that they remain on the right track. So make as much detail as possible!
After you finish calculating the funds needed, then the next time to look for the loan. Koinfidence provides opportunities for your business to continue to grow with a venture capital loan from ComeBusiness.
Online business people who have a strong vision in increasing sales from time to time are entitled to get loans of up to Rp 2 billion with low interest ranging from 0.75% to 1.67% per month. Very interesting, right? Let's submit a loan to Koinfidence.
When it pays to consider consolidating loansAre you repaying a loan to your bank , running out of an overdraft , credit card and using a loan from a non-banking company ? During consolidation, you take one new loan to pay off all the repayments so far. In most cases, this leads to a reduction in interest rates (you pay less on interest) and a reduction in the monthly payment. It is important to beware of any early repayment fees for any of the existing loans. If you manage to repay all loans on time and properly, and your incentive is to “just” save, you have a relative advantage. You have time to consolidate (so you can quite calmly choose) and especially you are an interesting customer for some banks. We recommend monitoring the actions of new banks.
When does consolidation not pay off?
- In some cases, consolidation may result in a high interest rate loan. This risk is highest when you want to refinance credit card loans or non-bank lenders – high interest rate loans. In these cases, it is preferable to try to get a classic bank loan .
- If you are listed in the BRKI debtors’ banking registers , approval of refinancing may be a problem.
- In the case of high debts, it is more advantageous to use an American (non-purpose) mortgage. This is a loan secured by real estate, the advantage being a lower interest rate compared to conventional refinancing.
At what bank is loan consolidation the most advantageous?This cannot be simply said, the interest rate, the amount of repayments and other conditions depend on a number of factors. The most important are:
- Loan Amount – During consolidation, you can either ask for an amount to fully cover your debts or get extra funds.
- Debt structure – do you owe your credit card, overdraft or non-bank loan overdraft? The higher the RSPN for consolidated loans, the worse the conditions.
- Record in the register of defaulters – people with a record in the register of defaulters pose a higher risk to the bank and therefore there is a risk of either refusal of refinancing or higher interest rates.
How to apply for loan consolidation?You can combine loans and loans in several ways:
1. Ask the bank directly for consolidationDirectly ask your bank to consolidate loans. You tell her who and how much you owe, and depending on how much you need to borrow. The bank will ensure payment and you repay directly. Physically, you will not get the money. The disadvantage of this method is the laboriousness of paperwork and possible unwillingness to cooperate with creditors or a new bank.
2. Take a new loan and pay off the debts yourselfYou ask the consolidating bank for a new loan and repay all existing debts from the money raised. This option is much simpler and quicker, however, the bank accesses it only for very creditworthy clients. In fact, in one moment you will actually double.
3. Take advantage of a pre-approved loanSome banks offer pre-approved loans in internet banking or through classical letters. These are tenders created automatically for each client, often with a better interest rate and almost always with less administrative burden. You can help yourself to get a similar offer – banks evaluate potential borrowers according to their behavior. Just increase your bank account limits and generate high sales by forwarding money from one account to another. This creates the impression of a rich client with a low risk profile.
Consolidation approved, what debts need to be repaid first?After getting the money, pay off the debts with the highest APR (annual percentage rate of charge) first. The percentages of interest and other charges vary widely, but in general, you should repay the debts in the following order: Loans from non-banking companies you found on the Internet, at bus stops, in newspapers, and so on.
- Credit Cards
- Non-purpose loans
- Special-purpose loans