Author: Anna Peters

Posted on by Anna Peters

Methods of Financing

  • It would be nice if all the funds necessary for the business could be prepared with “own funds such as savings”, but it may be difficult depending on the business.
  • It is possible to raise funds from outside even before the opening of the business. In particular, borrowing from financial institutions has an advantageous system limited to funding-related businesses, and is socially backing up the opening of business.
  • It is quite possible that the savings will be saved as living expenses for the time being and the business funds will be used for advantageous borrowing.

Specific financing method
In addition to self-financing such as deposits and savings saved in advance and borrowings from financial institutions, we may use investment or subsidies/subsidies to raise funds. In many cases, you will need to combine multiple financing methods to raise the total amount of funds required, but here we will briefly explain the points of each financing method.

  1. Own funds
    The first is “own funds”. The advantage of using own funds is that compared to other procurement methods, there is no need for repayment and there are few restrictions on usage.
    Of course, since it is my own funds, management tends to be unstable at the beginning of the business, so the fact that there is no need to repay is a huge advantage.
  2. Financial institution borrowing
    The second is “financial institution borrowing.” As with self-financing, financial institution borrowing is used in many opening cases. The advantage of using financial institution borrowing is that it is relatively easy to use compared to other methods, and there is also an advantageous system that limits the start-up funds. You may also receive advice on your business through the borrowing process. However, there is of course a “screening” for borrowing. If you do not meet the standards of the financial institution, you will not be able to get a loan. Also, unlike self-financing, monthly repayment including interest is required.
  3. Investment
    The third is to “get an investment“. The mainstream method was to receive investment from venture capital and individual investors, but recently, new investment methods such as crowdfunding have also been used.
    It is used for projects that cannot be handled by financial institutions or when you want to raise a large number of funds. Also, unlike financial institution borrowing, there are no requirements for self-financing. The conditions will be adjusted individually.
    A solid plan is required to receive investment at the time of opening. As an investor, it is an “investment”, so it is of course necessary to consider the merits of the investor.
  4. Subsidies/subsidies
    The fourth method is to use “subsidies/subsidies”. Although it is irregular, subsidies and subsidies related to start-up funds may be solicited. Subsidies and subsidies have a “purpose of the grant” to the last, and can only be used if the business meets that purpose. In addition, when using it, a screening will be conducted in accordance with the application guidelines.
    It takes time to complete the examination procedure, and basically, the subsidies and subsidies are “deferred payment”. In any case, it is necessary to prepare own funds and borrowings as immediate funds.
    It takes time and effort to use, but if there is a system that suits your business, it is a good idea to consider it as a means of raising funds.
  5. Borrow from relatives/friends/acquaintances
    Based on the above four “own funds”, “borrowing from financial institutions”, “investment”, and “subsidies/subsidies”, we may raise funds by the method of “borrowing from relatives/friends/acquaintances”. In case of an emergency, your own network will help you. It is not easy to explain “your personality” and “the background to the opening of the business” to others. When you apply for a loan, you may not be able to fully convey your personality, the future of your business, and the need for funds in a short period of time. If you are a relative or friend of mine, you know you well, and if you decide that your business is worth the money, you may be able to help.

However, it may cause trouble later, so when procuring, it is better to leave it in writing and confirm the contents with each other. “There is also a courtesy to close friends.” Especially when the business is on track and profitable, something is said. To protect yourself, keep the contract details firmly.

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Financing assumptions
When thinking about raising funds, it is easy to think first of all about “how much you can raise”, but in principle, there is a form of business and you raise funds accordingly. In particular, when relying on the funds of others, such as borrowing and investment, it is necessary to clarify “what kind of business you are going to do” and “how much money you need for that business”.

Crypto Loan and Lending Company

Posted on by Anna Peters

The world of blockchain already surpassed and little-by-little, replaced the conventional system of financing. This starts from the payment transactions up to the system of investment method. 

Moreover, the industry of cryptocurrency loan and lending process spikes at its highest through De-Fi or decentralized finance. This platform provides an interest rate as much as 10x higher compared to the conventional way of banking system.

Crypto loan and lending gained more attention and interest over the last years joining the popularity of Bitcoin. 

Nowadays, crypto lending penetrates the foundation of banking professional conversations and investors over the institutions. Let’s dig deeper in order to understand what crypto loan and lending is all about.

The Birth of Cryptocurrency

Cryptocurrency is also known as crypto assets which became popular during 2008. This came into life when Satoshi Nakamoto invented the Bitcoin that attracts technologists to explore the idea in a broader way. 

And because of innovations, there are new currencies that were created and also became popular and recognized the same way. These newer currencies include Namecoin and Litecoin.

With its growth, the value of Bitcoin suddenly increased during 2017 having an end annual value of US$20,000. Subsequently, in early 2018, there was a small decline and abrupt changes in Bitcoin’s prices which led to its worth of $10,326.73.

Looking back on crypto loan and lending

Along with the increase in cryptocurrency, new financial services penetrated this kind of industry. From payment systems, currency exchange, financing, up to crypto-based loans and lending, these new services are starting to generate cryptocurrencies. Below are the various services utilizing crypto.

Margin Lending

This is a different type of financial service that permits lenders to give funds using various currencies to the borrower. The lender may have the potential to earn passive income through cryptocurrency lending based on the trade price on a specific time provided. 

  • Companies offering this type of financial service: Bitfinex and Nuo

Crypto-to-Crypto Lending

This simply works by lending the Bitcoin, Altcoins or Ether and approving the contract provided. Engaging in this will simply let you earn an interest rate for a specified period.

  • Companies offering this type of financial service: Coincheck, Nuo, and Lending Block

Crypto to Fiat Lending

Another new financial service that works using the cryptocurrency is the crypto to fiat lending. This operates with cryptocurrency holders that usually have businesses and need cash. 

With this, the cryptocurrencies including Altcoin, Bitcoin or Ether serve as collateral thus allowing the user to have cash in hand. However, in this type of financial service, there are some conditions that apply. One example of this is the decrease of collateral price which may come for around 25 to 30%.

  • Companies offering this kind of financial service: SALT Lending and Unchained Capital

What’s with Cannabis and Cryptocurrency

Posted on by Anna Peters

The stocks for cannabis are already taking a big leap for over years now which have caught the attention of many investors in the market. Based on records, the value of the cannabis stocks are on its peak leaving behind the market index. One cannabis research shows that approximately $46.4 billion sales in the black market of North America would be expected to come up. This seems to be a large group for cannabis sales in which legalization of cannabis use are trying to be approved.

The cannabis sales for North America is expected to increase for greater than $22 billion by the year 2021.

The Major Drawback of Cannabis Industry

Even if it is already legalized, the funding for marijuana business is still not accepted by majority of banking institutions or financial services. Generally, most banking establishments are governed by the Federal Deposit Insurance Corporation or FDIC. Under FDIC, funding pot-related businesses is an act of money laundering under the strict implementation of the law. Thus, it leads to criminal charges and some judicial fines.

Bitcoin is the key

This major challenge in the marijuana industry could be possibly addressed through the use of bitcoin. The electronic cryptocurrency such as bitcoin is generally utilized in Washington State. This currency is allowable to use by consumers who own debit or credit cards issued by the bank. Utilization of this currency is helpful for the legal purchase of the weeds in dispensaries or to buy these Canadian weed stocks in 2020.

In case, the bitcoin has been chosen as a mode of payment, companies handling the cryptocurrency may charge the credit card of the customer through a kiosk system. Moreover, within the dispensary, the bitcoin can be traded for pot items. It is then that the intermediary company – the company handling cryptocurrency, exchange the bitcoin for dollars.

However, the intermediary company may require a valid ID from the consumers. The ID should be scanned, encrypted, and contains a fraud detection program of nine point system. One of this is the inclusion of having a personal bank account of the consumers.

Furthermore, consumers are only allowed to purchase not greater than $150 in bitcoin currency. This is to give effort in preventing money laundering. Generally, in any case that the Congress cannot provide alternatives for the cannabis stocks, cryptocurrency could progress into becoming a connection between the pot and its consumers. This is more likely because there is epic crypto exchanges of 2019 as per records.

Investing In Cryptocurrency

Posted on by Anna Peters

How do you start investing in cryptocurrency?

When the first transaction was born on January 3, 2009, no one could realize the enormous impact that the cryptocurrency would have on the traditional financial market. Now that we are ten years later, there is already a select group that has accumulated wealth in trading with cryptocurrency. These people made their fortune when the cryptocurrency was only available to a select audience. Now that the cryptocurrency is also available to the general public, more and more people are interested in trading in this digital currency. Some people even take out loans (https://newhorizons.co.uk/loans-for-bad-credit/no-guarantor-loans/) to invest in cryptocurrency.

Cryptocurrency versus traditional money

Although the traditional currency and the cryptocurrency have much in common, there are also substantial differences. Where we can use traditional money all over the world to make payments, the cryptocurrency has many limitations in this area. And although there are more than 3,500 Bitcoin ATMs around the world, the cryptocurrency does not represent a regular payment method. The decentralized cryptocurrency lacks any form of regulation, which means that there is no basis for a stable value. With the cryptocurrency, we always have to deal with a limited amount that is not reproducible.

Cryptocurrency versus shares and bonds

In practice, you can actually compare the cryptocurrency better with shares and bonds, but here too there is a substantial difference. In fact, compared to the cryptocurrency, it can be said that shares and bonds are even reasonably stable. This whimsical character is part of the source code of the cryptocurrency, making them ideal for speculation. Investing in cryptocurrency entails more risks than trading in shares and bonds.

Another big difference is that the cryptocurrency is easily accessible to the general public, while shares and bonds are actually accessible to a select group of investors.

How can you invest in cryptocurrency?

Of course, we can start long discussions about, for example, the ‘hype’ with which the cryptocurrency is typed or the regulations regarding this digital currency. Anyway, the fact remains that people are currently making money by speculating and investing in cryptocurrency. To start trading with cryptocurrency you must first have access to a digital wallet where you can safely store your digital coins. For example, you can choose the Ledger Nano S if you are going to trade exclusively in Ethereum, the Coinbase if you are going to trade with Bitcoin or the StrongCoin if you are going to trade with different cryptocurrencies.

Diversify

Just as with traditional shares and bonds, it is wise to make a diversity of investments. Based on market signals, background information and your own knowledge of the cryptocurrency, you make a conscious choice where you think the return is the highest. The trade within this digital currency is fairly extensive, so there are daily news and developments.

There may be a few annoying pitfalls that make you lose your hard-earned money quickly. Within the European Union, the cryptocurrency is exempt from VAT, so you are not entitled to a refund of the VAT on the costs incurred. An exception to this is the trade in cryptocurrency where the transactions are directed at locations outside the European Union. Because the Bitcoin has undergone such an enormous value development, the tax authorities have of course also become interested in this cryptocurrency.

Even though the trade in cryptocurrency is anonymous, you are still required to include it in your tax return. The value of the cryptocurrency is calculated based on the exchange rate on January 1 of the relevant year. The first 25,000 euros is exempt from tax, which means that you and your partner can keep the first 50,000 euros free of tax.

Invest and speculate

When trading in cryptocurrency, you only want to invest with money that you have left. Definitely do not break into piggy banks and do not use money that you need to be able to pay your daily costs. Remember that the value of the cryptocurrency is enormously erratic and that it is not regulated centrally, as is the case with traditional money. For example, if you have a total value of 2,000 euros in cryptocurrency today, this may be worth only 400 euros tomorrow.

Conversely, of course, exactly the same applies because the 400 euros may suddenly be worth 3,000 euros tomorrow. Although the blockchain offers reasonable security, there are still cybercriminals who can take advantage of the naivety of owners of cryptocurrencies.

Basic rules in crypto trading

As far as we are concerned, a few rules apply to invest and trading in cryptocurrency that is extremely important. Ensure a healthy spread of your investments over at least five different crypto coins. Make sure you don’t panic and therefore lose your cryptocurrency. A dip in the rate simply happens and is actually also healthy for the development of the relevant cryptocurrency.

We expect that crypto coins generally only gain in value in the long term. Trading in the short term can quickly yield a small profit, but you can easily lose that profit because you had to invest in another cryptocurrency. The fourth rule that is important relates to trading in crypto coins themselves. Realize that the trade-in crypto coins is not an obligation, but an opportunity.

Another rule that can yield a lot of returns in practice is the value-volume ratio of crypto coins.