Arth Veda Financial Consultancy

Arth Veda Financial Consultancy A consultancy for the financial requirements needing detailed preparation in terms of paperwork and financial planning for present and future projects.

13/04/2017

Year 2017 has been a quiet one in as far as lending is concerned. Interest rate caps and the unwillingness to lend and as well as to borrow has kind of put the financial market into a very 20/20 situation.
Whilst the 'SME' type business person may be happy that the rates got capped, is he still able to access credit facilities. Highly unlikely.
The bigger players in the market are still able to get their financing requirements sorted out based on both their history and also their "security" which in most cases is Land.
I keep hearing of debtors complaining of no liquidity whilst companies continue to have to pay bank charges and interests on loans.The domino effect is felt far and wide.
So who is holding the money? The Bank, the supplier or the debtor.

31/12/2016

Happy New Year to everyone who supported this venture. Hope to better the experience as 2017 is ushered in.

18/11/2016

The Daily Newpapers have recently been talking about about restructuring plans for many Banks. Whilst this is a sign of trying times as staff will now be under the fear of uncertainty on whose job is safe, it will also be somewhat f a bitter sweet situation for client.

Systems will be so automated that most likely even loans will be looked at in departments totally disjointed from the clients branch.

Clients will not be able to avail a personal view to the approver as in most cases the approver will be in another city all together.

This makes it all the more important to have proper information collated or put together in simpler terms before you approach any bank.

Good time to get in touch with me.

01/11/2016

It has been a while since I updated this page. Perusing through the news on a daily seems to always bring up the issue of people losing jobs and Banks closing branches. How does that affect the businessman in all of you?

Be, it the Banks or general businesses, at the moment, it is the worst time to be borrowing.

Whilst the business may need funding almost immediately, most financiers are tightening their controls in a bid to reduce their so called risky lending.

It would be better to restructure your current borrowing to reduce expected payments and use the saved liquidity towards the business instead of fresh borrowing.

Many of you may not agree with me but in the long time, give it a thought!!

04/05/2016

Cash-flow is strained!

A common statement in Kenya at the moment and frankly a situation wherein everyone in one way or another has been affected.

Now is the right time to re-look at your financial structure so that you can get a way to move out of the strain.

Call or email me on the contacts provided on the page for a free consult.

18/04/2016

Simplicity

In today's economy, simplicity should be the key work. Especially when related to the finance part of your business. I have put down a couple of points towards this:-

1. Creative accounting will in the end show up with loopholes and create issues where there should have been none.

2. Funding diverted towards areas, it was not meant for, will generate loan arrears/defaults which will bring your credit rating into disrepute.

3. Take the blow to the accounts when it is to be taken. Do not delay it. By this I mean, if you know for sure that you have a bad debt, get it written off. Don't wait for a Bank to doubt your debt collection abilities.

In the long run, it saves you the stress of a string of explanations.

11/04/2016

Whilst talking to clients for business, a common sentence I get is that I have good security then why is the bank not giving me funds!
Yes, historically the Banking industry had been availing funds based on the security/collateral that a client gave to them. Hard lessons were learnt because many a time the collateral was used as the primary source of repayment and when the collateral was sold, the funds generated were well below required.
Therefore it is now a NORM to ensure that liquid cash-flow is available first before even the security is looked at.
Crucial to note what cash flow means.
"Cash flow is the net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's liquid assets are increasing, enabling it to settle debts, reinvest in its business, return money to shareholders, pay expenses and provide a buffer against future financial challenges." (Investopedia)

Therefore it would make sense to analyse your requirements and try to calculate whether the project/need can generate the cashflow itself or would you need to have a secondary form of cashflow in place.

05/04/2016

Today we will look at actual interest charged on a loan facility by Banks.
Interest is one of the most important income lines for Banks and to the client, it is one of the largest finance costs on their bottom line.
Interest is charged to any finance product that you as a client access and has two forms namely flat rate and reducing balance.

In simple terms,
A flat rate is calculated as :
Interest Payable per Installment = (Original Loan Amount * No. of Years * Interest Rate p.a. ) / Number of Installments
Whilst
A reducing balance rate is calculated as:
Interest Payable per Installment = Interest Rate per Installment * Remaining Loan Amount

As a client the reducing balance method is much more cost effective as the interest will reduce as you continue to pay whilst in flat rate the interest amounts stays constant all through the life of your loan.

So look at what interest rates are charged to your facilities always.

31/03/2016

I was to have written on the various finance charges levied by banks in the past weeks and have not done so. The main reason being that upon reflection, I have come to a conclusion that all the Banks are using different names for the various charges that they levy yet they are all the same.
Hence as a start, lets take the one off loan processing fee which in reality is not one off in most cases.
This is the fee a Bank levies for the time and work done to look at the paperwork you avail for your requirement. Why do I say that, because if you analyse your letter of offer, there will be a commitment fee charged yearly on the balance remaining to be paid, which in most cases is the same as the one off processing fee.
Note that the name change occurs as now the Bank is not processing but is nurturing your loan in a matter of speaking!

07/03/2016

For those who follow the Business Daily, must noticed that Central Bank of Kenya is set to unveil a pricing mechanism to assist the public be able to compare various cost parameters.

The Average Percentage Rate model captures the one-off loan processing fee, insurance cost, security charging expenses and the actual interest charged on a loan facility.

This is a welcome tool for the general public who till date has been unable to really know what exactly the cost to the business when borrowing is.

In line with this, I will over the next few days, write up a few things regarding each of the charges to assist you all to understand the reason for the charge.

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Nyali
Mombasa
80100

Opening Hours

Monday 09:00 - 18:00
Tuesday 09:00 - 18:00
Wednesday 09:00 - 18:00
Thursday 09:00 - 18:00
Friday 09:00 - 18:00

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