Plannet Bizness

Small Business Loans

Mon, 08 Feb 2010 17:05:12 +0000

First you need to identify which among the many types of small business loans you need. Small business loans ranging from $5,000.00 to $35,000.00 are called micro loans. For larger needs, such as for the acquisition of land, buildings and other major fixed assets, development financing is what you should find. There are also import export loans as well as franchise financing. Do your research to find out if you are qualified for small business loans guaranteed by the U.S. Small Business Administration or SBA.

Any of these small business loans will require extensive preparations and paperwork. As a small business owner, you will need to prove your credit worthiness through a personal credit history report. Lenders will also require a business plan which includes your credentials as the business owner, your company financial statements, business assets and an analysis of your market. All of these should be packaged in a professional loan proposal which presents how the loaned amount will be used to strengthen the business and how you intend to repay the loan. Most of all, you need to present your loan collateral – the assets you will put up to secure the loan.

General risks for good business

Thu, 04 Feb 2010 04:15:15 +0000

Trading in a particular underlying stock may be suspended or the whole market may be suspended. In this case, all options on that stock will almost certainly be suspended at the same time. If the suspension continues over an expiry date, it may be necessary to deem the options to be cash settled. Even in a less drastic situation where the option is not suspended, illiquidity may still occur. The option may still
be trading but become illiquid through simple lack of investor interest. The implied volatility levels at which an option trades may quickly become so high or so low that even with a relatively stable share price, option prices fluctuate significantly. Your view of the “theoretical price” may not match the actual trading price. Sometimes an option may even trade at less than its intrinsic value.Although the stock options market has a Market Maker system, there are a limited number of Market Makers and it is possible that a situation could arise where a Market Maker is not available or fails to meet its obligations.

Spread trades

Thu, 04 Feb 2010 04:11:28 +0000

Although spreads are attractive as a means of limiting options exposure, there are potential pitfalls. If one leg is assigned without there being an opportunity to exercise or liquidate the other, this can create delivery and settlement problems. Or it may happen that it is difficult to close out both legs at the same time; if, for example, just the long leg is closed, the short will be left unhedged. Moreover, the bid and offer spreads prevailing at the time the spread was entered into may be less favourable by the time you want to liquidate and so the strategy may be less effective than you had expected.
Finally, the dealing costs associated with trading options may make impractical a spread strategy that looks attractive in the textbook. Many strategies are not effective when the investor is paying all the dealing costs at the full rate or is only able to buy at the best offer and sell at the best bid.