Two Pearls Of Business Wisdom: Alternative Financial Companies And Buying Out Your Partner

Share:    

An alternative financial company generally refers to credit unions

. A credit union is non-profit organization that differs from a traditional financial institution (i.e. bank) in that the credit unions owners are account holders in the credit union. A credit unions primary goal is to improve its members financial stability by allowing them to borrow money at low interest rates. Once an individual deposits money into his or her account, the individual becomes part owner of the credit union and shares in its profits.

Like traditional financial institutions, alternative financial companies offer checking and savings accounts, credit cards, and loans. However, credit unions generally have a lower profitability than banks, which indicates that credit unions are more concerned with the well being of its members. Credit unions also enjoy federal and state tax exemptions provided to non-profit organizations, unlike traditional financial companies.

Membership to an alternative financial company is regulated by government standards. Membership is restricted to defined geographic locations, members of specific non-profit associations, employees of specific companies, or certain occupations. In most cases, once an individual becomes a member of credit union, he or she is considered a member for life. Membership is not revoked when the individual moves, changes jobs, or discontinues membership from an association. However, if an individual decides to cancel membership with the credit union, there is no guarantee that he or she will be able to regain membership into the alternative financial company.

Buying out your partner generally refers to business owners looking to purchase another partners shares of the same business. A partner may choose to leave a business if he or she is moving, retiring, or otherwise no longer be a part of the business and its profits. Before deciding whether or not to buy out a partner, a business owner must consider several factors

The first thing to consider before buying out your partner is the value of the partners share of the business. Some partnerships have business agreement contracts that outline the duties and obligations of each partner. These agreements may also indicate a pre-determined value in the case of a buy out. Businesses that did not determine the selling price of a partners share can use an asset valuation (current market value minus current market debt) or rely on the businesss earnings to settle a price for the buy out.

Another factor to consider before buying out your partner is how to finance the buy out. Most lenders do not provide loans specifically for buy outs, but they do offer loans that can be used for any business purpose. For large loans, lenders usually require applicants to supply personal and business financial documents, a business plan, and credit reports. If a business has a poor financial history, it may be unable to obtain a large loan at a low interest rate.

by: Madden

POST COMMENT

Aarkstore Enterprise--roofing Materials In The U.s., 2nd Edition Starting A Christmas Light Installation Business Cash Loans-effortless Monetary Assistance Carpet Cleaning for Better Business Operations The best outsourcing partner for your business Pursuing Business Administration Career Training Emergency Cash Loans - Avail Finance For Small Urgent Requirement Business Development Lead Services Generation: How Can an Online Business Development Lead Service Generate More Traffic and Growth for Your Business Stay at hotel in Kensington the next time you visit London for business or pleasure Tablet Size: Too Big or Too Small? Check And Cash Loans- Get Some Extra Cash Easily Unique Business Development Tools For The 'mom And Pop' Stores What To Look For In A Small Business Database