TessMore Finance Blog

Debt financing is considered one of the most feasible sources of finance. It’s on account of the following two reasons. Debt financing is cheaper than equity financing because interest payment on a loan is taxable. On the other hand, the payment of a dividend is not tax-deductible. Hence, debt is a cheaper source of finance due to tax deductions. Raising finance via loan does not lead to control dilution. On the contrary, raising finance via equity leads to ownership dilution. Hence, raising finance via debt is a desirable and prominent source of finance. This article shall discuss major sources of long-term debt financing for most corporations. The following sources are considered major sources of finance for major corporations. Bank loan/financing from financial institutions Issue of debentures Issue of bonds. Short terms borrowings Director loans Sale and leaseback Accounts payable Let’s discuss detailed aspects of each of the financing methods. Bank loan/financi...

Car Dealers Car dealers are primarily in business to buy and sell new and used cars, but not every car dealership makes money on financing. Furthermore, it’s not just the way a dealer charges for financing that can determine if he or she makes money on it. How a car is bought under financing is also important. In case you are wondering how do car dealers make money on financing? Here are the methods they utilize; 1) Service Contract These are contracts that can be purchased by the buyer. The dealer will sell the buyer the service contract, while the buyer pays for it himself. The dealers who sell these contracts make money on financing because they offer better rates and earn more from these contracts. They also earn more from the rest of the services that come with this contract. A service contract is a good way for car dealers to make money on financing because the buyer thinks he is getting better rates through these contracts and has additional fees and services. 2) Holdin...

Many people are still unsure about the difference between a loan and financing. It can be hard to understand the difference, especially if you’re not familiar with credit cards and loans. So we’ve prepared this comprehensive guide to help you know the difference between a loan and financing. What is a loan? A loan is a financial investment that allows you to buy a property, car, or another item. Loans are usually repaid with interest, which can be very expensive. A mortgage is a loan given to a person who wants to purchase a house, car, or another item. A mortgage is usually for a more extended period and usually has higher interest rates than a loan for individual purchases. What is a credit card? A credit card is a type of loan that allows you to borrow money and use it to purchase items or withdraw cash. A credit card is often used by people who don’t have a lot of money and need an easy way to get the money they need to purchase something. For example, if you’re trying to buy ...

When you buy furniture, you’re spending a lot of money. But is it worth it? In some cases, the answer is yes. If you can find a good deal on furniture, it may be worth your time. But if you don’t have any money to spend, there are other ways to get furniture without spending a fortune. If you have a budget and enjoy saving money, renting furniture may be viable. Renting furniture is becoming an increasingly attractive trend to get furniture without spending a lot of money.  It’s good for the environment, and it’s also good for you. Because Rental Furniture is cheaper than buying furniture, you may find yourself able to save up enough money each week to buy your pieces of furniture later on. If you can’t afford the full price of furniture on your own, consider borrowing from someone else. You could return the favor by helping your friend or family member purchase their pieces of one-of-a-kind furnishings for their homes.  The best way to repay someone when this happens is ...

Do car salespeople make money on financing? Yes, they do! The process of buying a car is not as simple as it seems. You need to find the right lender and get a good deal on the car. Then, you need to pay back the loan as soon as possible. These steps can add up over time, so you must research and find the best lenders for your specific situation. However, there are some things that car salesmen can do to make money on financing. They sell warranties, vehicle protection plans, and roadside replacements. Here are ten essential car sales tips you need to know to find out whether they can make money on financing: 1. Know What it Costs to Buy/Improve a Car There are some costs you need to consider when getting a vehicle. It would be best if you had an idea of what it costs to acquire or improve a car before approaching the shop. The problem is that people can often walk in, come up with wild ideas about price and then give the salesperson too much money for the vehicle. Also, salesper...

If you are thinking of financing a car from any of the top seller brands in the market, then a strong credit is something you should secure on priority. Different sellers demand varying credit criteria. Let us look upon Nissan financing, its features, procedure, rates, and credit requirements. Nissan Financing Nissan offers both dealership financing and its own manufacturer financing to make its vehicles more affordable. Nissan authorized dealers are accessible through Nissan Motor Acceptance Company (NMAC) , presenting you with three financing options. Lease Special offers Loan Check Nissan Accessories Affordable Here Lease financing Lease is like borrowing a vehicle for a certain period and paying for the usage. Nissan lease offers allow customers to get their hands on the best models without paying for them in full. Lease duration is from 24 to 60 months , during which annual mileage of 10,000, 12,000, and 15,000 is allowed. After that, the vehicle might be turned i...

Companies use various costing techniques to reach the expenses they incur to produce a product. In most cases, deriving the direct costs within the process are straightforward. However, fixed costs and other overheads may create some issues.  Consequently, companies use absorption costing to absorb those costs into the product cost. This process involves allocating those costs based on the activity levels. Usually, companies include direct costs when establishing their profits. While it provides them with a base to understand how their processes work, it may not paint a clear picture. Companies also incur indirect costs during those processes. However, they do not consider them in costing methods. Nonetheless, it does not imply those costs are not essential. Companies must consider those during their decision as well. Companies can tackle the above issues by allocating indirect costs to direct costs. Companies can achieve this through a burden rate. This rate is an essential part...

Budgeting refers to a process performed by companies to create a spending plan. However, it does not cover areas where companies spend resources only. Budgeting also applies to income. Once companies estimate their future sales, they can create a plan to spend accordingly. Usually, budgeting involves several steps that companies perform after regular intervals. Budgeting allows companies to set a path for future operations. It also enables them to create a standard for future activity. When they get the results of their actual performance, companies can compare it to the budget. Consequently, they can understand if they have performed according to the plan. The budgeting process falls under managerial accounting. It involves various managers. Companies prepare a budget for a defined future period. However, most companies create various budgets, which they combine under a master budget. They may require each manager to budget for their respective department or function. Based on that,...

In managerial accounting, differentiating between various types of costs is crucial. Usually, companies use several classifications to separate those costs. For example, they can segregate any spending based on its nature, function, or behavior. Companies use these cost classifications to help in making well-informed decisions. Usually, companies classify costs after they occur. At this point, they have critical information about it. However, companies can also predict costs before they occur. This process requires indulging in the process of creating a budget. Companies can prepare various types of budgets based on their needs. Usually, this process starts with income and then predicts expenses based on that. Companies prepare cost budgets, which also include budgeted costs. These costs may apply to various areas within a business. Cost budgeting is one of the most crucial types of the budget that companies prepare. It follows a similar process as creating other budgets. However, it...

In a modern world, our financial lives are increasingly digital. Online banking accounts, investment apps, trading platforms and crypto exchanges hold the keys to our personal wealth. But like they say: You can’t take it with you. So what happens to the money in those online accounts after you die? Who gets it and how does that work? Failing to make arrangements for your digital assets can create stress and hardship for the people you love. They may struggle to access money you intended to leave them or lose out on sentimental items like family photos and videos. Digital estate planning prevents the unforeseen lapses that can occur even when you have a traditional estate plan in place that covers your home, vehicles and retirement accounts. Here’s what you need to know to fill in the digital gaps. What Is a Digital Estate Plan? A traditional estate plan spells out where your all your belongings, property and money go after you die. A digital estate plan focuses on your online a...