Category Archives: Invest

Tips for Receiving an Approval for Small Business Loans

Securing funds for small business loans have become simpler; you need to follow the right steps and prepare in advance to increase your chances of securing a business loan approval.  Certain companies that are looking out to grow require these loans to increase their working capital, upgrade or hire more employees.

Take a look at the following details in order to avail a business loan:

Provide all your information

This is mandatory and you are required to produce all the specifics and details about how you intend to make use of the funds. You also need to provide them with information regarding how you will accomplish your goals; therefore, you should prepare in advance to answer certain questions that the lender will pose to you.

Share your financial information

You will have to provide your lender with all the financial information and background of your company and your future growth plans that include your personal information. This information will help the bank and the lender to gain an insight into your current financial scenario in order to sanction your business loan. This is mandatory because a lender would be required to know all your past history so that it is easier for him/her to approve your loan.

Try looking out for multiple lenders

This requires a bit of research where you can create a list of potential lenders and discuss with them the possibilities of the loan you wish for. This will help you create more options if any one of them declines your application. Also, their feedback will help you prepare better for future business loan applications.

Look for SBA lenders

Before you take any step regarding a business loan application, you should definitely visit counselors who can assist you with any loan process. They shall also help you with various products available that you may not be aware of. Therefore, with a little assistance, you may be able to secure a loan and build your business further.


Strategic Bond Fund

strategic_bond_fundStrategic Bond Funds has become one of the most popular means of investment among investors who wish to diversify their portfolio. This bond fund is more popular during a period of crisis or difficult market conditions when investors seek to hand over the allocation of their bond to an expert.  But it difficult to select the right one is not that simple because every strategic bond fund varies in its approach to market maturity and the interest-rate risk.  Also, a strategic bond shall differ in terms of the rewards for a younger investor and the stable income seeking retiree. Therefore, you need to keep certain things in mind before investing in a Strategic Bond Fund.

Bond exposure

You need to check your own bond exposure before taking a chance at the bond fund because you do not want an overlap of allocation with your current/existing bond funds. This can result in risks rather than diversification of one’s profile. By means of comparison you can check how you can decrease the risk factor rather than an increase.

Know your goals

This is required in order to know what you can achieve by investing in a Strategic Bond Fund. If your goal is to achieve a high-yield exposure, then aggressively positioned Strategic Funds are apt for you. Also, you need to be comfortable with an unpredictability that can be equivalent to an equity fund and a gilt fund. This way, you shall ensure higher returns. If you are only looking out for a Strategic Fund to diversify your portfolio, then a Strategic Fund that provides exposure to government bonds is the perfect option.


You need to have a perfect understanding of your portfolio’s reward and risk profile. The following terms need to be kept in mind for a better strategy.

Credit Exposure: Earlier, one was required to hold a minimum of their assets in high-yield bonds but now things are a bit different. Funds nowadays are able to capitalise on opportunities and vary the credit quality.

Maturity: Strategic Bond Funds can make adjustments in the interest-rate exposure; therefore, it displays characteristics of flexibility.

Derivatives: Derivatives can increase the flexibility of the portfolio and also reduce transparency of the investment process.


This is necessary to determine how much you’d wish to invest in your portfolio. It will all depend on the type of fund you have selected. If you think of high yield due to an aggressively positioned fund, then you need to be at a fairly modest position. Also, you need to reduce this exposure once you reach the point of retirement. If your fund is not that aggressive or as you can call it, mild mannered, then it shall be able to adapt it to the ever-changing market conditions. This shall also be helpful once you retire.

So you need to be sure the kind of investment fund you seek, so that you maximize on your gains and minimize on those risks.

Which Mutual fund to go with: Equity fund or Debt fund

There are many investment avenues available for one to park their money. However, many investors refrain from venturing into these territories. The major reason being a lot of investors really do not understand the entire working of many investment options available.

Funds Type

Today, we shall try and understand the difference between Debt Funds and Liquid Funds. Also, try to decipher the tax treatment both the entities are liable to. However, before we proceed with the different kinds of funds. Let us try to understand the term “Dividend Distribution Tax”.

Dividend Distribution Tax (DDT)

Dividend received from a mutual fund is tax free, but only at receiver’s hand. However, mutual funds have to pay a tax on that dividend to government before giving it to us. So actually the tax is paid by mutual fund on behalf of us. This tax is called DDT.

Let us try to understand Equity, Debt and Liquid Funds.

Equity Funds

Equity Funds are the type of funds where about 65% of the corpus is invested in equity shares of different companies. The dividend acquired from these funds is exempted of DDT. Therefore, the unit holders receive 100% of the dividend declared to them. However, it isn’t any form of extra income. It is very much your invested money that you receive after the dividend.

Debt Funds

These funds invest in medium-to-long term debt securities like government bonds and corporate bonds/debentures. These funds are subject to DDT at the rate of 12.5%. A surcharge and cess of 10% and 3% respectively is applicable as well. These funds come with an effective tax rate of 14.16%.

Liquid Funds

Liquid funds are usually short-term debt securities. They invest in commercial papers, certificates of deposit and call money, where the duration is less than a year. The income incurred from such funds is subject to DDT of 25%. Like the debt funds, these funds too are liable to pay a surcharge and cess of 10% and 3% respectively on the tax.

Well, there are different types of funds available in the market. Each comes with its own benefit and purpose. One needs to invest in a fund that best suits their needs.

How to Calculate Returns from Systematic Investment Plan

There are various modes of investments in mutual funds available. However, investing in mutual funds through systematic investment plans (SIPs) is the most considered avenue of all.

One major reason being, SIP helps to tackle the market volatility better. Investors can buy more units when there is volume gain and fewer when the value rises. Amidst, all this there is one question that every investor ponders upon: How are SIP returns calculated?


It is an easy task to calculate returns when lump sum investments are made. As the entry and exit of the investment is defined, along with the expected returns. However, when it comes to SIP, where the exit date is confirmed, but there are multiple investments made at different intervals.

In such case, internal rate of return or IRR method is of great help. IRR is useful not only for SIP returns but also for estimating returns from money back insurance policies and bond yields. This calculation method equates the discounted value of the stream of investments (also known as cash outflows) to the discounted exit value of the investment (cash inflows). The discount rate that equates the present value of cash out flows and the present value of cash inflows is the rate of return earned by an SIP.

What is IRR?

IRR or internal rate of return


Internal rate of return (IRR) is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equal zero.

Internal rate of return is used to evaluate the attractiveness of a project or investment. If the IRR of a new project exceeds a company’s required rate of return, that project is desirable. If IRR falls below the required rate of return, the project should be rejected.

The Many Avenues of Investment

The Many Avenues of Investment

You have finally fetched yourself a good job. And the best part is it also pays you well. Now comes the most important agenda when you reach this stage of earning and that is savings. But in today’s ever inflation growing world mere saving isn’t the solution.

One has to even make the right kind of investments in order to build their wealth for the future needs and emergencies. Let us put light on some of the avenues one can bring to use to not only park their money safely but also to build the right kind of wealth.

This option is one of the hot favourites among Indians. There are some good reasons to it though, the major one being the rate of interest incurred from the investment made through this avenue within a year’s time. The rate of interest however depends from person to person but on an average 10% is provided by many of them. The best part of FDs is that they are completely risk free.

If you wish to  venture into the stock market but want to go slow on the risk factor than mutual funds are meant for you. They comparatively come with less risk and the rate of earnings is comparatively higher than that of FDs.

They are as equal to buying gold however on papers. They appreciation and depreciation happening on them are as per the ones happening in the actual metal market. So if you don’t wish to take care of the security of the jewellery you can always opt for these bonds.

  • Real Estate

 One of the hottest avenues to invest into especially in India. The ever soaring property rates have surely made it difficult for the upper class to give it a thought. But the once who can afford it must surely give it a shot. Some have even experienced 100% appreciation to their investments.

3 In-depth Ways of Calculating Mutual Fund Performance

Mutual fund Calculation

Savings form an important part of everyone’s life and you may not be an exception to this belief. There are several saving schemes in the market, which allow you to invest and multiply your savings. But, in the end, only the ones linked with equity markets offer substantial returns.

Direct investment in equities can be risky, so you can prefer buying the mutual funds. These funds are linked with capital market instruments, and the funds gathered through them are managed by experts, who have in-depth knowledge of stock market movements. Still, you will always have a doubt whether your investments are growing or not.

To solve all your doubts to assess mutual fund performance, take a look at these 3 in-depth, number crunching methods that help in assessing the growth in a better way.

Mutual Fund Performance

1.   Absolute Returns

This method is also called as point-to-point method of evaluating the growth of mutual funds. It is commonly used to calculate returns and is one of the easiest methods of all. According to mutual fund definition, NAV is the net asset value of the scheme for a particular day. In this method, NAVs on two dates are used to assess returns.

The formula is: Absolute Returns = (NAVend – NAVstart / NAVstart) x 100

2.   Total Return

This method includes the dividends received over underlying stocks for a particular MF scheme. It is better than the Absolute Return method, and is calculated by summing up dividends for a particular period to the absolute change in NAV.

The Formula is: Total Return = (Dt / NAVstart) x 100 + Absolute Return

3.    CAGR (Compound Annual Growth Rate)

This method is very intensive and is applicable for holding periods of more than one year. It eradicates the fluctuations and inconsistencies experienced during short term holding periods and offer a solid picture to the investors.

These are the three number intensive techniques, which help in assessing mutual fund performance in a better way.

Go Steady with Systematic Investment Plan (SIP)

systematic Investment PlanMoney saved is money earned, but if the same money invested is equal to it multiplied. There are many investment avenues available in the market, to suit your lifestyle and financial bearings, each coming their own set of advantages and risks involved with them.

Systematic investment plan (SIP) is great option to invest a fixed amount in a mutual fund at defined intervals. The time period to invest could be monthly or quarterly, with the minimum amount for most of the mutual funds being Rs. 1000 per month.

Following the SIP investment planner is the best way to reduce the susceptibility to market fluctuations. A very powerful tool that channelizes capital preservation and also it turns into substantial wealth creation in the long run.

The time span is as per the scheme you invest under. However it is advisable to invest in a long term plan so as reap maximum benefits. As in the case of SIP you will be investing irrespective of the market conditions. Therefore ensuring the cost averaging to play a vital role and giving you benefits from volatility.

When you buy more units at a lower price due to a fall in the market and at a higher price some lesser number of units due to the soaring market, you average out your investment costs. Let us try to make it simpler, suppose a monthly SIP is for Rs. 10,000 and the funds all Net Asset Value is Rs. 10. The result is 1000 units being credited to you. However the following month on account of fluctuating market conditions, if the funds NAV falls to Rs. 5 you will get Rs. 2000 units. Thus lowering your average purchase cost. A SIP helps you buy more when the stock market is falling and less when it is rising.

Investors keen on building wealth SIP is an excellent tool. It doesn’t demand for a one-time lump sum investment. This pattern of regularly investing helps build discipline in investors. The best part is you can go for a SIP according to your goal- your child education, marriage of children or your investment plan.

SIP proves to be most effective when buying equity-based funds. The NAVs of these funds can vary widely. Through rupee cost averaging a SIP can make this volatility work for your benefit. However rupee cost averaging may not work well if the market keeps on an up-trend.

Investors of all age can make use of Systematic Investment Plan. During weak market conditions never discontinue a SIP or even when the market falls steeply, as the very purpose of investing in SIP shall be defeated. SIP is apt for an investor who does not have a chunk amount to invest or is sceptical about the risk involved.