The Latest Trend In Doorstep Loans

A business services franchise is a good option for many who are willing to serve the corporate world. A business franchisee needs an investment in terms of fees, real estate, marketing, merchandise etc. there are both small business services as well as high cost businesses in the category. Here we discuss some prominent business services franchises.

Financial services: The financial services space is rapidly growing in India. It is one of the most significant business services in India. According to the latest Central Statistical Organisation (CSO) data, financial services, banking, insurance and real estate sectors have risen by 7.8 per cent in the third quarter of 2009-10. This displays the success of the financial service industry. With the over-all increase in the finance services seekers, finance service providers took to franchise route, thus creating a great scope for franchise opportunity.

Till a few years back, the franchising which was an unknown concept in this field has gained lot of momentum in the present times. Before discussing the factors responsible for this development, let us first get familiar with the term ‘Financial services franchisors’.

Financial services refer to services provided by the financial service companies. The finance service companies encompass a broad range of organisations that deal with money management. A few of these organisations include banks, insurance companies, consumer finance companies, stock brokerages, investment funds etc. These companies offer various services such as asset protection, investment and savings, retirement plans, customer-orientated service, besides offering personal loans, commercial loans, mortgage loans, and education loans for the aspiring students. Financial service providers are on the rise as franchising as a mode of expansion is being opted by this industry. Manish Shah, Associate Director- Business Strategy, Equity & Product Development, Motilal Oswal Securities Ltd shared, “The belief in entrepreneurship and the drive it brings to the business, made Motilal Oswal take the franchise route. Franchising brings more scalability to the business and the business becomes entrepreneur driven.”

Courier Services: Another category of business services is courier service. The companies basically work around transportation of goods from one place to another, delivery of documents, packages, and larger shipments of products. These provide services to companies and individuals who need rapid service, accountability, and tracking that regular mail does not accommodate. Courier services are more reliable and dependable as compared to ordinary postal services due to less time consumed and delivery guarantee. However, with the introduction of modern gadgets and faster modes of transportation this system has also progressed a lot. Moreover, franchising is also one of the main stimulants of its popularity and profitability.

Franchising in this sector has grown with more and more players taking the franchise model for reaching out to far flung areas in the vast nation. Courier service companies are required to deliever important mails and parcels to any part, whether city, town or village in the country. Therefore, franchising can be the best mode for guaranteed delivery of the items. According to DS Patel, Channel Head, DTDC, “Franchising is an essential and most effective way of expanding the network. Opening our own company owned courier offices is very expensive and time consuming. However a franchise outlet is economically beneficial to the company.” As informed by Praveen Govindraj, Assistant General Manager, First Flight Courier, “Franchising definitely helps in directly reaching to far-fling areas for delivering items due to our local partners in those areas.” He further added, “Franchising can be a win-win situation for both the franchisor and franchisees as both benefit from it. The local partner (franchisee) has a much better idea of a particular locality than the main company which is based out of Delhi or Mumbai. Delivering parcels to small towns and cities becomes difficult and also take a lot of time if it is done by the company in metropolitan areas. At such times the local franchisee can be of great help.” This can be the major reason for courier companies to opt for the franchise route. Moreover, having local partners all over the nation, who deliver all items on time, also increases the credibility and profit making of the parent company.

The typical feature of the courier service franchise includes doorstep booking, customer convenience and security of each and every consignment that has been entrusted to it. Jaguar Couriers Franchise, Blazeflash Couriers, etc are some of the franchising companies under this category.

Cartridge refilling: Cartridge refilling forms another business service category. In the modern age of I.T, there is a constantly growing need of cartridgere-fills. Foraying in the cartridge refill industry through franchise route is a promising venture. A cartridge refill franchise offers to its user’s quality refills at a fractional cost. Current industry trends and future projections suggest that printer cartridges demand will continue to multiply at a very fast pace as computers and low cost printers swamp the market. Cartridge World, Cartridge Café, Cartridge Xpress are some of the good low-cost franchise options.

Challenges

Every business has attached to it certain set of challenges. Though the basic challenges remain the same across the board for all business service franchises, their relevance with each sector differs.
Before opting for any of the above options, clear all your doubts. Apart from your initial investment, take into account the ongoing costs that must be paid to your franchisor, including franchise royalties, marketing fees and other required purchases. After you are convinced go ahead and make your mark in the franchising world!

Does Social Media Help In Getting An Auto Loan?

Looking for Loan Management Software (LMS)? Here are three things to focus on when selecting one for your business:

1. How much are you willing to pay?

2. Why does your business need a Loan Management Software?

3. What features does your business require in a Loan Management Software?

To help you answer these questions, here is our guide on how to choose the right Loan Management Software for your business.

What is Loan Management Software?

As its name suggests, Loan Management Software was originally designed to help lenders build and maintain relationships with new and existing customers who have borrowed cash. Today, however, Loan Management Software has evolved from a simple contact management system into a robust tool that lets you manage leads, customers, sales, marketing, call centres, scoring, under-writing, payment processing, reconciliation, accounting, backend processing and other types of transactional and operational data, all in one easily accessible solution.

It can also integrate data from other areas of your business without any additional work. A Loan Management software gives lenders and their sales teams all the tools necessary to grow your business in a central hub with the least amount of work possible.

How much does a Loan Management Software cost?

The cost of LMS varies greatly. LMS Providers typically use a transaction-based pricing model, which can depend on a variety of factors, such as the number of active loans and the payment processed.

For the most part, you can expect to pay on a per-transaction, per-month basis or one-time cost depending on the model. You may also come across providers that charge a flat monthly fee but require larger packages or extra fees for support & maintenance. Pricing can range from $1 per transaction per month to hundreds of dollars per month, depending on your business’ unique needs.

Don’t have a budget for LMS software? Or maybe you’re not sure that LMS software is right for your business, but would like to see what it has offer? One option is to schedule a demo of a few LMS Solutions in the market or try a free trial if offered by any of the vendors.

Do you need Loan Management Software?

LMS can make your life as a lender much easier, while also helping your agents and managers get the job done in a more efficient and streamlined way.

If the following statements apply to you, your business needs Loan Management Software:

1. You need a robust Contact management.

At its core, contact management part of the LMS is all about keeping information from various sources organized. If you’re looking for a better way to store and manage customer information, LMS is the best solution for your business. It acts as an entire database for all types of insights on customers, including contact information, loan applications, loan and transaction histories, how customers browse your website, ways and times they’ve applied a loan with your company, demographics, interests, personal preferences and more. You can then use this information to segment customers for marketing purposes or to easily search for customers who fit specific criteria.

2. You’re looking for an automated way to boost sales.

LMS doesn’t just keep your contacts organized – it also offers a bevy of tools to help you boost sales and execute more effective marketing campaigns. These include:

Lead Generation. Find new customers by automatically taking-in leads from various sources like social media, website visitors, lead providers, inbound calls, newsletter sign-ups and more.

Email Marketing. Automatically build email lists, launch email marketing campaigns and measure performance. Loan Management Software can also send email reminders to customers and prospects to drive sales – for instance, by reminding them of abandoned loan applications, suggesting loan products or promotions that they may be interested in and other ways to make up for missed sales opportunities.

3. You’re looking for an automated way to funnel your leads

A robust LMS doesn’t allow you to work on leads, thereby wasting your precious time. It integrates a configurable under-writing engine that does the first level of filtering your quality leads.

Under-writing. Qualify and filter leads automatically with pre-defined set of rules or criteria (Under-writing), so that, you only have to spend of quality leads when they are sent to Credit Bureaus for Scoring.

Scoring. From a lenders perspective, just qualifying leads is not enough to accept the leads because every lead is associated with a certain cost. The leads need to be scored for various criteria before they are accepted. There are various Credit Bureaus in the market that allows the leads to be scored and sometimes, the leads should pass through multiple Bureaus’ Verifications before they are accepted. A good LMS should allow such integrations of multiple Credit Bureaus to score leads and sometimes with an option to define order in which they should pass through each Credit Bureaus

Verification. Now that, we have the quality leads that need to be verified. Only at this point that, your Agents start calling the leads and go through various verification steps of Loan Application. A flexible Loan Management Software lets you define the verification process, call queue, agent allocation to different type of leads, auto originate loans for good leads etc. Any lead that passes this verification is ready for approval upon the customer signing the Electronic Loan Agreement.

4. You’re looking to streamline the Loan Approval Process

Loan Agreement. The Electronic Loan Agreement binds the customers with the lender. Any lender’s choice would be to have multiple loan agreements for different loan types or products and the ability to add or truncate rules based on the lending rules of each state.

E-sign. Any lead that passes this verification is ready for approval upon the customer signing the Electronic Loan Agreement, which is called E-Sign. A good Loan Management Software either has an inbuilt E-Sign mechanism or allows to integrate with E-Sign Services like DocuSign or HelloSign. In-built mechanism obviously reduces the cost while integration allows you to use the service of your choice for E-Sign Process.

Loan Approval. The moment customer signs the E-Sign Document, the Loan Application sent to the Agent’s Manager for Approval. In case of a good lead, if an auto-origination process is defined in the Loan Management Software, the Loan Application is automatically approved and is ready to be funded. Other Loan Applications are approved by the Agent’s Manager and on approval and goes for funding.

5. You’re looking to automate payment processing

Payment Processing. Once the loan is approved, it will be ready for funding. The funding can happen immediately or at the end of each day. An efficient Loan Management Software should be capable of defining when and how the funding should happen every. Usually, the payments are processed through ACH Providers. The Loan Management Software can integrate one or multiple ACH providers based on lender specifics.

Return Processing. Receiving returns from the bank or payment processors and updating them in the LMS can be quite a tedious task. The returned transaction must be charged with an NSF Fee or a Late Fee, which has to be notified to the customer. The LMS you choose should have the ability to automatically process this information.

Collection. Collections are a part of any lending portfolio. Non-performing loans may be handed over to collection agencies by the lenders. This follows a set of rules that varies based on the state and lender. The LMS you choose should have the means to accommodate the rules and should be flexible enough to change at any point of time.

Choosing the right Loan Management Software

Ready to invest in Loan Management software? There are many different types available, so choosing the right one is the key to making it work for your lending business. Here’s what a lender need to ask a potential LMS Provider

1. Is it built for your market and loan types?
2. How easy is it to use? Can I easily train employees?
3. How customizable is the software?
4. What features are available to help me with sales, marketing and other aspects of my business?
5. How easy is it to integrate with third-party providers I already use?
6. What limitations are there to using the software?
7. What engagement models and costing options available? Are there any setup or additional fees? What if I need to expand my portfolio?
8. What type of security features does it have to protect my business’s and customers’ data? What happens if there is an outage? How is my data backed up in the cloud, and can I access it immediately?
9. If I need help, what type of customer service do you offer? Can I reach you any time, or is there a long turnaround period?

Top 5 Benefits Annuities Can Bring Except The Lifetime Income

If field goals were suddenly worth four points and touchdowns were worth five, football coaches would change their strategies. This type of scoring change has occurred in the estate planning field, but many people keep using their old playbooks.

Recent income and estate tax updates have adjusted how the planning game should be played. If your estate plan was drafted before they came into effect, reconsidering how you structure your estate could save you tens of thousands, or even millions, of dollars.

The Changing Rules

To understand these rule changes, we should rewind to the year 2000. The federal estate tax only applied to estates exceeding $675,000 and was charged at rates up to 55 percent. Long-term capital gains were taxed at 20 percent. Since then, the amount that can pass free of estate tax has drifted higher, to $5.43 million in 2015, and the top estate tax rate has dropped to 40 percent. On the other hand, the top ordinary income tax rate of 39.6 percent when coupled with the 3.8 percent Net Investment Income tax is now higher than the federal estate tax rate.

Although the top capital gains tax rate of 23.8 percent (when including the 3.8 percent Net Investment Income tax), remains less than the estate tax rate, these changes in tax rate differentials can significantly modify the best financial moves in planning an estate. While estate tax used to be the dangerous player to guard, now income taxes can be an equal or greater opponent.

Besides the tax rate changes, the biggest development that most people’s estate plans don’t address is a relatively new rule known as the portability election. Before the rule was enacted in 2011, if a spouse died without using his or her full exemption, the unused exemption was lost. This was a primary reason so many estate plans created a trust upon the first spouse’s death. Portability allows the unused portion of one spouse’s $5.43 million personal exemption to carry over to the survivor. A married couple now effectively has a joint exemption worth twice the individual exemption, which they can use in whatever way provides the best tax benefit. Portability is only available if an estate tax return is filed timely for the first spouse who dies.

From a federal tax standpoint, if a married couple expects the first spouse to die with less than $5.43 million of assets, relying on portability is a viable strategy for minimizing taxes and maximizing wealth going to the couple’s heirs. Estate planning for families with less than $10.86 million in assets is now much more about ensuring that property is distributed in accordance with the couple’s wishes and with the degree of control that they wish to maintain than it is about saving taxes. However, state estate taxes can complicate the picture because they may apply to smaller estates.

Below are a number of plays that families who will be subject to the estate tax should consider to optimize their taxes in today’s environment. Although many of the techniques are familiar, the way they are being used has changed.

The New Estate Planning Plays

Empowering Your Plan’s “Quarterback”

A successful quarterback has a solid group of coaches providing him with guidance, but is also allowed to think on his feet. Similarly, the quarterback of an estate, the executor or a trustee, needs to be given a framework in which to make his or her decisions but also flexibility regarding which play to run. Today’s estate planning documents should acknowledge that the rules or the individual’s situation may change between the time documents are signed and the death or other event that brings them into effect. Flexibility can be accomplished by expressly providing executors and trustees with the authority to make certain tax elections and the right to disclaim assets, which may allow the fiduciaries to settle the estate in a more tax-efficient manner. Empowering an executor has its risks, but building a solid support team of advisers will help ensure he or she takes the necessary steps to properly administer the estate.

Maximize the Value of Your Basis Adjustment

It’s a common misconception that lifetime gifts automatically reduce your estate tax liability. Since the two transfer tax systems are unified, lifetime gifts actually just reduce the amount that can pass tax-free at death. Lifetime gifts accomplish marginal wealth transfer only when a taxpayer makes a gift and that gift appreciates outside of the donor’s estate. In the past, people generally wanted to make gifts as early as possible, but that is no longer always the most effective strategy due to income tax benefits of bequeathing assets.

One big difference between lifetime giving and transfers upon death is the way in which capital gains are calculated when the recipient sells the assets. With gifts of appreciated assets, recipients are taxed on the difference between the transferor’s cost basis, typically the amount the donor paid for the asset, and the sales price. The cost basis of inherited assets is adjusted to the fair market value of the assets on the date of the owner’s death (or, in a few cases, six months later).

When choosing which assets to give to heirs, it is especially important to make lifetime gifts of assets with very low appreciation and to hold onto highly appreciated assets until death. If a beneficiary inherits an asset that had $100,000 of appreciation at the donor’s death, the basis adjustment can save $23,800 in federal income taxes compared to if the beneficiary had received the same property as a lifetime gift. Unfortunately, the basis adjustment upon death works both ways. If the bequeathed asset had lost $100,000 between the time it was purchased and the owner’s death, the recipient’s cost basis would be reduced to the current fair market value of the property. Therefore, it is advantageous to realize any capital losses before death if possible.

Holding onto appreciated assets until death is appealing for income tax purposes, but might not be advisable if the asset is a concentrated position or no longer fits with your overall portfolio objectives. For these types of assets, it’s worth analyzing whether the capital gains tax cost is worth incurring right away or if you should pursue another strategy, such as hedging, donating the asset to charity or contributing the property to an exchange fund.

Choosing not to fund a credit shelter trust upon the first spouse’s death is a perfect example of maximizing the value of the basis adjustment. These trusts were typically funded upon the first spouse’s death to ensure that none of the first spouse’s exemption went to waste. Since the portability rules allow the surviving spouse to use the deceased spouse’s unused exemption amount, it is no longer essential to fund a credit shelter trust. Instead, allowing all of the assets to pass to the surviving spouse directly allows you to capture a step-up in basis for assets upon the first spouse’s death, and then another after that of the second spouse. Depending on the amount of appreciation and the time between the two spouses’ deaths, the savings can be substantial.

Annual Gifting

Making annual gifts is a traditional strategy that remains attractive today. In addition to the $10.86 million that a couple can give away during their lifetime or at death, there are also some “freebie” situations where gifts don’t count towards this total. You can make gifts up to the annual exclusion amount, currently $14,000, to an unlimited number of individuals, and you can double this amount by electing to gift split on a gift tax return or by having your spouse make separate gifts to the same recipients.

Transferring $14,000 may not seem like a meaningful estate tax planning strategy for someone with more than $11 million, but the numbers can add up quickly. For example, if a married couple has three married adult children, each of whom has two children of their own, the couple could transfer $336,000 to these relatives each year using just their annual exemptions. If the recipients invest these funds, the future appreciation also accrues outside of the donors’ estates, and the income may be taxed at lower rates.

Contributing the annual exclusion gifts to 529 Plan education savings accounts for the six grandchildren can accelerate the gifting process and increase the income tax benefits. A special election allows you to front-load five years’ worth of annual exclusion gifts into a 529 Plan, which would currently allow $840,000 in total gifts to the six grandchildren. In this scenario, the grandparents would not be allowed to make any tax-free gifts to the grandchildren during the following four tax years. Since assets in a 529 Plan grow tax-deferred and withdrawals for qualified educational expenses are tax-free, you can realize substantial income tax savings here. If you assume the only growth in the accounts is 4 percent capital gains, which are realized each year, that results in about $8,000 in annual income federal tax savings per year, assuming the donor is in the top tax bracket.

You can also pay a student’s tuition directly to the college or university, since these payments are exempt from gift tax. This exception applies to medical expenses and health insurance premiums as well, as long as payments are made directly to the provider.

Given that annual exclusion gifts don’t impact the $5.43 million lifetime exemption, I recommend making these gifts early and often, but remember to give away cash or assets that have very little realized appreciation. The earlier you make a gift, the more time the assets have to appreciate and pay income to the recipient.

Lifetime Charitable Giving

Earlier I mentioned that you want to avoid giving away appreciated securities during your lifetime. The exception to that rule is a gift to charity. By donating appreciated securities that you have held for more than one year, you can get a charitable deduction for the market value of the security and also avoid paying the capital gains tax you would incur if you were to sell the asset.

If you know you have charitable intentions, it is more effective to donate appreciated securities earlier in life, rather than at death, since doing so removes future appreciation of the assets from your estate.

Using Trusts to Increase the Effectiveness of Transfers

Lifetime transfers to standard irrevocable trusts are no longer as appealing as they used to be, now that the estate tax rate is closer to the capital gains rate. Assets transferred to irrevocable trusts during the grantor’s lifetime typically do not receive a basis step-up upon the grantor’s death. Therefore, determining whether it is more appealing to make lifetime transfers or bequests in a specific circumstance requires making assumptions and analyzing probable outcomes.

Nonetheless, funding certain trusts in conjunction with other planning techniques can increase the planning’s effectiveness. An intentionally defective grantor trust (IDGT) is one of the most appealing types of trusts for wealth transfer purposes, because the donor is treated as owner of the trust assets for income tax purposes but not for estate and gift tax purposes. A defective grantor trust is a disregarded entity for tax purposes, so any income that the trust earns is taxable to the grantor. By paying the tax on trust income, the grantor effectively transfers additional wealth to the beneficiary.

Another popular strategy is for a grantor to make a low interest rate loan to a defective grantor trust. The trust then invests the funds. So long as the trust’s portfolio outperforms the interest rate charged on the loan, the excess growth is shifted to the trust with no transfer tax consequence.

One of the common ways to cause a trust to be intentionally defective is for the trust document to allow the grantor to retain the power to substitute assets held by the trust for other assets. Assuming a trust has this provision, it is very powerful to routinely swap highly appreciated assets held by the trust that would not be eligible for a basis step-up with assets of equal value held by the grantor that have little to no appreciation, such as cash.

Rather than funding a credit shelter trust upon the first spouse’s death, a surviving spouse might choose to receive all of the assets outright and then immediately fund an IDGT that includes the power to substitute assets. The trust’s income would be taxed to the surviving spouse, allowing for additional wealth transfer, and the grantor could use the swapping power to minimize the income tax cost of the lost basis adjustment.

Any transfer technique, such as a grantor retained annuity trust (GRAT), that allows a donor to transfer assets without generating a gift is also valuable, since it helps preserve the lifetime exemption amount as long as possible, thus maximizing the assets that can benefit from adjusted basis.

Finally, trusts can be useful for keeping assets out of your estate that never should have been included in it. For example, wealthy individuals should generally purchase life insurance through an irrevocable trust, rather than directly in the insured individual’s name. Life insurance owned by decedents is includible in their taxable estates. By creating a trust funded through annual exclusion gifts and having the trust purchase the policy, you can ensure that the estate tax does not take 40 percent of the policy’s proceeds.