Categories: Faster loans, Loans

What is a Mortgage Accelerator loan?

If you are dreaming of building your own home but feel that you are unable to afford it, then a self-build Mortgage accelerator loan may be just what you need.

A Mortgage accelerator loan is a blend of a home equity loan and a checking account. Where the Borrowers salary is deposited straight into the mortgage account, whereby the lender takes out the money which is put towards the mortgage balance. As withdrawals are made out of the account during the working month, the mortgage will increase by that amount. The remaining amount is applied to the balance of the mortgage at the end of the month to repay the loan.

A Mortgage accelerator loan is widely used in Australia, where one in three mortgages is a mortgage accelerator loan.

A self-build mortgage accelerator loan differs from a traditional mortgage in that homebuyers receive a variable-rate home equity line of credit (HELOC) instead of a fixed rate loan. Although some lenders offer the accelerator to re-mortgage existing homes, they tend to be aimed at first time buyers.

Here are the list of pros and cons to use a guide, to help you decide on whether these types of loans are suitable for you.

Pros

  • The main benefit of this type of loan is that when a borrower’s salary is deposited into the account, it reduces the average monthly balance of the mortgage, which in turn reduces the amount of interest charged.
  • This can be useful if you have an interest applied to your checking account. Furthermore, the amount left in the account at the end of the month it may reduce the balance of the mortgage faster than it would take under a traditional mortgage, which can result in the overall cost of the mortgage interest.

Cons

  • If borrowers that have a reduction in their salary or more money going out than in, they will increase their mortgage cost as well as increase the interest overall. 
  • They tend to have an initial higher interest rate than a traditional mortgage.
  • Are variable, which could mean that your payments will increase as interest rates rise, potentially further increasing your outgoings and prolonging your mortgage term.
Categories: Faster loans, Loans

How a short-term Accelerator business loan could help you fund your own social enterprise.

When starting a social enterprise, or any other business, finances are key to the success or failure of your idea.  There are several things you can do to improve your chances of getting a business loan, to help you get the funds you need to get your business off the ground. One of those things is a short-term business loans option.

Financial lenders and investors want to know that their money is going towards a business that is viable, sustainable and has the potential to grow.

Having a business plan is the first step and often necessary to show potential investors and lenders that you have taken the steps to understand the needs of your business.  You will increase your chances of success, by calculating how much money your business needs, in the short, medium, and long term. Ignoring this step will have serious negative consequences if you fail to estimate the total cost to fund your business.

To help minimise the potential funding pitfalls you will need to do a cash flow projection that will:

  • Forecast the operating costs, potential sales and set up costs, for instance vehicles, computers, tools, furniture.
  • Your projected cash projection for each month, you can do this monthly, quarterly, and annually, to help you measure your progress.

You can then add at least 10% for potential emergencies. You can add at least another 10% for unexpected costs or events that can negatively affect your cashflow forecast.

Having access to an accelerator loan, can definitely help you during these emergencies, especially if you need a vehicle back on the road, but you need to remember that your credit rating must be in good standing order to be successful.  You can also add the accelerator loan to your contingency plan funding, however, you should bear in mind that this can get very expensive if you fail to make the repayments on time.

Categories: Faster loans, Loans

How to set up a social enterprise?

Before you start setting up your sustainable Social enterprise business, you need to answer whether it:

  • Solves a problem.
  • Who will this business benefit?
  • How do you intend to make enough profit to build a thriving social enterprise?

You then need to start formulating the framework by writing a business plan that puts the mission at the centre of it.  There are several ways you can set it up:

  • A community interest company (CIC) – usually set up so that the profits are reinvested back into the mission and protected from being privately sold.
  • Sole trader business – with profits put back into the company
  • A limited company – as a Charity Incorporated Organisation (CIO)
  • A mutual organisation – where customers have a share and is run for their sole benefit.

Source social enterprise funding

If your start-up business is a CIC, you access grants that are usually reserved for charities. You can also apply for a short-term business loan, private investment, or crowdfunding, to name but a few. Alternatively, if you need money quickly, then you can opt to apply for an Accelerator loan to help you with the initial set and operating costs.

Being able to demonstrate a commitment and dedication for your social enterprise as well demonstrating that your business is sustainable will help your application for an accelerator loan to be successful.

Social enterprise marketing

Promoting your business, is vital if you want people to hear about your product and service.  An accelerator loan could help pay towards making your marketing plan strategy successful, particularly on social media platforms. 

You can use the money from your accelerator loan to market to your target audience and build a relationship with them. Putting your social mission at the forefront of your appeal will help you to tune in to your target audience’s values. This will make them feel empowered and will help you spread the word for both your product and your shared mission.

Categories: Faster loans, Loans

Social enterprise Accelerator (Short term) loans

What is a social enterprise?

A new type of business that has recently gained in popularity is the Social enterprise.  These types of businesses can range from homeless Big issue sellers, the Eden Project, your local Co-op, coffee shops, cinemas, pubs, restaurants, and leisure centres. Similar to traditional businesses, they intend to generate a profit.

There are an estimated 100,000 social enterprises throughout the country contributing around £60 billion to the economy and employing two million people. 

This profit is reinvested or donated back into the local community with a view to create employment and training opportunities to improve the prospects of local people.  Creating a positive social environment empowers local people to challenge social problems, improve cohesion, and provides support for people as well as communities and the environment.

This underpins the goals as set out by the UN:

“The Sustainable Development Goals are the blueprint to achieve a better and more sustainable future for all. They address the global challenges we face, including those related to poverty, inequality, climate, environmental degradation, prosperity, and peace and justice. The Goals interconnect and in order to leave no one behind, it ís important that we achieve each Goal and target by 2030.”

These enterprises are not only creating employment and job opportunities for people who are side-lined from the main workforce, they are transforming the communities they work in as well as the world. Contributing to the green growth market and innovating next-generation projects such as energy efficiency products, are all impacting towards the success of the UN Sustainable Development Goals.

To set up a social enterprise, there are several questions you need to answer, to help you decide whether this is the right set up for your individual business, you will need to:

·         Have a mission that will have a social and/or environmental issue at the heart of the business
·         Reinvest the lions share of their profits back into the business or local community
·         Is a viable profitable business
·         Are fully accountable and transparent in their Governance
·         Fiscal responsible

Check out our next blog to find out how to set up your own Social enterprise.

Categories: Faster loans, Loans

What is a Mortgage Accelerator loan?

If you are dreaming of building your own home but feel that you are unable to afford it, then a self-build Mortgage accelerator loan may be just what you need.

A Mortgage accelerator loan is a blend of a home equity loan and a checking account. Where the Borrowers salary is deposited straight into the mortgage account, whereby the lender takes out the money which is put towards the mortgage balance. As withdrawals are made out of the account during the working month, the mortgage will increase by that amount. The remaining amount is applied to the balance of the mortgage at the end of the month to repay the loan.

A Mortgage accelerator loan is widely used in Australia, where one in three mortgages is a mortgage accelerator loan.

A self-build mortgage accelerator loan differs from a traditional mortgage in that homebuyers receive a variable-rate home equity line of credit (HELOC) instead of a fixed rate loan. Although some lenders offer the accelerator to re-mortgage existing homes, they tend to be aimed at first time buyers.

Here are the list of pros and cons to use a guide, to help you decide on whether these types of loans are suitable for you.

Pros

  • The main benefit of this type of loan is that when a borrower’s salary is deposited into the account, it reduces the average monthly balance of the mortgage, which in turn reduces the amount of interest charged.
  • This can be useful if you have an interest applied to your checking account. Furthermore, the amount left in the account at the end of the month it may reduce the balance of the mortgage faster than it would take under a traditional mortgage, which can result in the overall cost of the mortgage interest.

Cons

  • If borrowers that have a reduction in their salary or more money going out than in, they will increase their mortgage cost as well as increase the interest overall.  
  • They tend to have an initial higher interest rate than a traditional mortgage.
  • Are variable, which could mean that your payments will increase as interest rates rise, potentially further increasing your outgoings and prolonging your mortgage term.