Pune Star Hotels – Luxury in the Cultural Capital

Pune is the second largest city in Maharashtra after Mumbai and the largest in the Deccan region. It is considered to be the cultural capital of Maharashtra.

Pune Hotels – Star Hotels in Pune

Pune, being an important tourist and business center has many Five Star Hotels. These hotels offer state of the art facilities for both tourist and business travelers.

The Sun N Sand Hotel

The Sun N Sand is a luxurious Five Star Hotel that offers elegant accommodation, a swimming pool, health Spa, business center, and a conference hall, to name just a few of its facilities. The hotel has 115 rooms which are available in four categories – Superior, Deluxe, Presidential and Club Sunbeam. All of these rooms come with the following basic facilities: Direct Dial Telephones facility, High speed Broadband for internet users, Mini Bar for drinking and dancing, Television with International Channels, Tea and Coffee maker, Daily Newspaper, and Weighing Scales. In addition to these facilities, each category of rooms has its own special features.

• Superior Rooms

Elegant rooms with all the basic necessary facilities to make your stay comfortable and memorable.

• Deluxe Rooms

These are spacious rooms divided into two levels: The Living Room level and the Bed Room level.

• Executive Rooms

These suites have a living room and a bedroom with an attached bath.

• Club Sunbeam

This is a separate floor dedicated to corporate executives. It has spacious rooms, a private lounge, a boardroom and a bar.

• Presidential Suite

This suite has a bedroom, a dining room and a living room. It is located on the sixth floor of the building. It is a suite designed for utmost luxury and comfort.

The Hotel has three different conference rooms:

• The Peshwa

This is a theater style room with state of the art equipment that can seat up to 350 people.

• The Senate

This is a room that can accommodate 40 people. It provides audio visual and conferencing facilities.

• The Maratha

This is a multi-purpose meeting and conference room.


The hotel provides a wide choice of in-house restaurants. The Orient specializes in Chinese cuisine; The Kurry Court serves South Indian and Tandoori cuisine, The Boomerang is the in- house bar, The Tea Lounge serves beverages and The Sweet Sin is a bakery. Whether you are on a business trip or a leisure tour, Five Star Hotels can make your stay in Pune a special experience.

Capital Punishment: How Money And Power Reshapes Societies

In a capitalist system, money is inextricably linked with power – the more money you have, the greater influence you wield.

In particular, purchasing power can become political power when the wealthy use their resources to assume positions in the corridors of influence through attending elite private schools, exclusive social clubs, or networking events where they can form connections with other monied interests.

The wealthy can also attain political control by either bankrolling those already in power who hold opinions favourable to them, by using expensive PR and marketing campaigns to shift public opinion in ways which suit their interests, or by forming pressure groups to influence politicians directly, among any number of other methods.

There are many different names given to this phenomenon – corporate lobbying, nepotism, corruption, cronyism, ‘the old boys club’, bribery, sleaze – and lots more, but all of these terms describe the same behaviour.

Namely, those with substantial levels of wealth are able to leverage these resources to shape societies in ways which fit their interests.

A prime example of this comes in the examples of the Koch brothers and the Mercer family.

Charles and David Koch are American billionaires and the primary owners of the second largest privately held company in the United States.

Since 1953, they, their family members, and several other extraordinarily wealthy donors have spent many hundreds of millions of dollars (probably even several billion dollars) on setting up think tanks and political action committees to pursue the Koch brothers’ political agenda of deregulation, low taxation, reduced environmental protections, and more.

Meanwhile, the Mercer family have also been major funders of right-wing publications and think tanks in the USA such as Breitbart News, the Heritage Foundation, and the Cato Institute – among scores of others.

On the other side of the political spectrum, the Hungarian billionaire George Soros founded the Open Societies Foundation and is thought to have donated over $32 billion to this organisation since its inception. Due to the Open Societies Foundation’s support and aid for refugees seeking asylum in Western nations, along with its lobbying for pathways to citizenship for illegal immigrants in the USA and other countries, George Soros has become a villainous figure for much of the European and American right-wing.

‘The Strong Will Do What They Have The Power To Do, And The Weak Will Accept What They Must Accept’ – Thucydides, The Melian Dialogue

The theme of those with financial power using it politically to further their own interests is sometimes combined with military power.

Consider the example of the United Fruit Company. Before WW2, the United Fruit Company was able to establish highly lucrative operations throughout Latin America due to the dictators of these nations guaranteeing them an advantageous business environment through such measures as repressing labour rights, offering tax incentives, and providing land grants.

Then, in 1944 United Fruit began experiencing difficulties in Guatemala – one of their most important bases. The Guatemalan President, Jorge Ubico, a dictator closely aligned with US interests and an enthusiastic supporter of the United Fruit Company, was deposed in a popular uprising.

Over the next 10 years, several of the Presidents to follow Ubico enacted land reform measures which returned vast swathes of land owned by United Fruit back to the Guatemalan people.

By 1954, the United Fruit Company had seen enough, and heavily lobbied the American government to take action. Partly due to the fact that several of US President Dwight D. Eisenhower’s staff had ties to United Fruit, they were only too happy to oblige.

As a result, the CIA orchestrated a successful coup in Guatemala which deposed the elected President and installed another dictator who was more amenable to American interests. What followed was four decades of brutal civil war between Guatemala’s dispossessed poor and a succession of US-backed dictators, which left 200,000 civilians dead.

In March 1999, US President Bill Clinton finally apologised to the Guatemalan government for the atrocities committed by the American-backed dictatorships, saying that ‘for the United States it is important I state clearly that the support for military forces and intelligence units which engaged in violence and widespread repression was wrong.’

However, Guatemala was by no means an isolated case. The trail of destruction and bloodshed which the United Fruit Company – together with their powerful allies in government and in the military – left across a series of Latin American states is almost staggering in its scale.

Not So Long Ago, Not So Far From Home

Examples of corporate interests becoming political and military interests too are by no means confined to little-considered Latin American states in long-gone decades.

For instance, over several years in the late-1960s to mid-1970s, individuals from the British security services, senior ranks of the military, and well-connected political circles, covertly plotted to overthrow Harold Wilson, the elected Prime Minister of the United Kingdom, and install in his place a coalition government of their choosing.

To most, such a conspiracy sounds extraordinary, but confirmation came from MI5 whistleblower Peter Wright, who outlined the plot in his book Spycatcher, which on its release in 1987 was banned from publication in England.

Others who have verified accounts of the plot against Wilson include Hugh Cudlipp, the former editor of the Daily Mirror, and the former intelligence officer Brian Crozier.

It is thought that the conspirators had a specific individual in mind to lead this unelected government – none other than Lord Mountbatten, a relative of both the Queen and Prince Phillip.

As Patrick Sawer, a Senior News Reporter at the Daily Telegraph has written:

Lord Mountbatten came dangerously close to leading a cabal of industrialists, generals and tycoons plotting a coup against an elected Labour government… The 1968 plot was designed to replace Prime Minister Harold Wilson with a coalition government to bring the country together, during what Mountbatten and the conspirators regarded as a time of national crisis.

These events were featured in Season 3 Episode 5 of the TV series The Crown, which was appropriately titled ‘Coup’.

A similar plot was hatched in the USA in 1933.

After the election of Franklin Delano Roosevelt, who had pledged to abandon the gold standard and enact a raft of left-wing economic policies which became known as the ‘New Deal’, magnates behind huge corporations such as Chase Bank, Standard Oil, General Motors, Goodyear, Dupont, Heinz, and others, conspired to recruit a private army of up to half a million military veterans to overthrow Roosevelt’s government and install a fascist leadership in his place.

This became known as the ‘Business Plot’, and the conspirators approached Major General Smedley Butler – a 34 year veteran of the US Marine Corps, who at the time was the most decorated marine in US history – to lead their private army.

However, Butler had become disillusioned by his experience in the US military, and not only did he refuse to participate in the plot, he testified about it before the United States House of Representatives in 1934.

Despite Congress concluding that they were ‘able to verify all the pertinent statements made by General Butler’, no-one was ever prosecuted, nor were any of the main figures accused of involvement in the plot called to testify before Congress.

Shortly after, in 1935, Smedley Butler released a book entitled War Is A Racket – the summary of which reads:

War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives. A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small ‘inside’ group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

More recently, the sequence of events which saw Dick Cheney be Chairman and CEO of the American oil company Halliburton between 1995 and 2000, then become United States Vice-President in 2001, followed by Halliburton then receiving a $7 billion contract in the run-up to the Iraq war which only they were allowed to bid on, is unlikely to be coincidental.

Furthermore, in his autobiography, the former Labour Home Secretary Robin Cook wrote about the overly close relationship that the British defence company BAE Systems enjoyed with the highest echelons of the UK government, and how they would benefit from this cosy connection.

Cook stated that ‘The chairman of BAE appeared to have the key to the garden door to Number 10. Certainly, I never knew Number 10 to come up with any decision that would be incommoding to BAE.’

As a final note, in 2006 an arms deal between BAE Systems and the Saudi Arabian rulers was being investigated by the UK’s serious fraud office for possible corruption, but following pressure from Sir Sherard Cowper-Coles, a former British Ambassador to Saudi Arabia, the investigation was dropped.

Five years later, Sir Sherard Cowper-Coles was appointed International Business Development Director for BAE.

COVID-19 And The Brave New World

It has been well documented that during the course of the COVID-19 pandemic, many billionaires have increased their wealth while most ordinary people have seen their incomes decline or their jobs disappear completely.

For example, the BBC reported that ‘billionaires have seen their fortunes hit record highs during the pandemic’ while also noting that ‘a World Bank report showed extreme poverty is set to rise this year for the first time in more than two decades’.

Meanwhile, USA Today stated that ‘the COVID-19 pandemic has triggered an economic crisis of a magnitude not seen since the Great Depression’, before continuing to say that ‘over a roughly seven-month period starting in mid-March, America’s 614 billionaires grew their net worth by a collective $931 billion.’

In truth, income inequality across much of the world had been rising for decades before the emergence of COVID-19, and in recent years the populations of many countries had reacted to these increased inequities by supporting a range of populist politicians who portrayed themselves as ‘outsiders’ railing against a corrupt ‘establishment’.

In the UK, the foremost figure to play this role was Nigel Farage, while others such as Jeremy Corbyn and Boris Johnson depicted themselves as brave combatants fighting against an out of touch and uncaring political elite. It is also not difficult to interpret the victory of the Leave campaign in the 2016 Brexit referendum as a vote against the British political establishment by those who had felt marginalised, ignored, and undervalued by mainstream politicians for a number of years.

In other countries, this wave of populism found its figureheads through individuals such as Donald Trump in the USA, Marine Le Pen in France, Jair Bolsonaro in Brazil, Sebastian Kurz in Austria, Narendra Modi in India, Geert Wilders in the Netherlands, Beppe Grillo and Matteo Salvini in Italy, Recep Erdogan in Turkey, Viktor Orban in Hungary, Rodrigo Duterte in the Philippines, and Volodymyr Zelensky in Ukraine, among others.

As all these populists rose to power even before the substantial upward transfer of wealth from ordinary people to the billionaire class which occurred during the COVID-19 pandemic, the question must now be asked – what will happen next, as people all over the world react to a such a rapid and significant increase in inequality, on top of what they have already experienced?

Where Do We Go From Here?

If public anger rises further due to the existing income and wealth inequalities being deepened still more, then it is not difficult to envisage the wealthy, elite classes becoming spooked and fearful of what may happen to their resources.

As a result of this, it seems logical to suggest that elites will retreat to lavish, heavily guarded enclaves even more than they already have done – perhaps existing in some kind of ‘billionaire city’, where extreme wealth is a prerequisite for entry, and where connections to the world outside are minimal.

A prototype for this kind of settlement can perhaps be seen in the example of Monaco. A Principality with a population of 38,000, one of the conditions for becoming a resident is to open a bank account in Monaco and deposit at least €500,000 in it.

Taxes in Monaco are almost non-existent, and it has the largest police force in the world – both per capita, and per square metre – plus there’s a 24-hour video surveillance system in place which covers the entire surface area of the Principality.

Monaco also has the second-highest GDP per capita in the world, beaten only by Liechtenstein. Interestingly, the only other two nations to have a GDP per capita in excess of $100,000 are Luxembourg and Bermuda, both of which are also regarded as refuges and tax havens for the ultra-wealthy.

The vast majority (i.e. over 75%) of Monaco’s residents are foreign-born, as wealthy individuals (including celebrities such as Lewis Hamilton, Novak Djokovic, Bernie Eccleston, Shirley Bassey, and Bono) move there to enjoy the tax benefits and other lifestyle advantages.

Monaco also has a poverty rate of zero, meaning that none of its population live below the poverty line, while its residents also enjoy the highest life expectancy in the world.

It’s not surprising then, that for these reasons and more, Monaco is known as the “Billionaire’s Playground”.

If public anger at rising levels of inequality continues to increase over time, and is bolstered by the substantial gains that the financial elites have made during a global pandemic which has severely impacted hundreds of millions of people across the world, then it is not difficult to imagine more Monacos being established in all corners of the planet, where the wealthy will flee to in return for guarantees of minimal taxation and heavy security – effectively cutting them off from the discontented world beyond the nation’s borders.

Automation, Disinformation, And Militarisation

In the background to all this, technological change continues at pace.

The rise of the robots means that more and more jobs than ever before are being automated, and scientists predict that in the next few decades alone hundreds of millions of people around the world will have their jobs automated out of existence.

As a response to the vast, incoming tidal wave of job losses and entire career pathways ceasing to exist, some seemingly utopian policies such as a four-day workweek and a Universal Basic Income (UBI) have been suggested by a range of academics, politicians, and businesspeople from a wide variety of political schools of thought.

The specified goal is to ensure that the huge numbers of people who will see their job roles either diminish or disappear completely due to automation shall be given the basic resources needed to survive and craft a meaningful life for themselves.

However, given what we know about the propensity for monied groups to either campaign against policies which do not fit their best interests, to flock to parts of the world which will not pursue those policies, or even to engage militarily against the ordinary working populations, why should we be so sure that the business and financial elites will not flex every bit of muscle they have to guarantee that they and they alone benefit from the enormous gains in productivity which automation will provide?

What are the chances that, instead of embracing UBI and the four-day workweek, these elites use every tool in their armoury to keep as much as possible of the added value generated by automation for themselves, at the expense of the general population?

Some methods the elites could use include passive measures, such as lobbying politicians, funding think tanks, or creating UBI and four-day workweek trials which are ‘set up to fail’, so they can then be used as ‘evidence’ to shape public discourse.

More active measures could also be used by the elites to protect and enhance their advantages. As we have seen, using military means to accomplish this has not been beyond them before, so it should be assumed that it is something they may be willing to do again.

This conflict between the interests of the general population and the interests of elites when it comes to the issues of automation and technological advancement, and of how this scientific progress could be used to benefit either group (or both), was addressed by Bill Joy, the Founder of Sun Microsystems, in an article he wrote entitled ‘Why The Future Doesn’t Need Us’.

In it, he stated that:

Control over large systems of machines will be in the hands of a tiny elite-just as it is today, but with two differences. Due to improved techniques the elite will have greater control over the masses; and because human work will no longer be necessary the masses will be superfluous, a useless burden on the system.

If the elite is ruthless they may simply decide to exterminate the mass of humanity. If they are humane they may use propaganda or other psychological or biological techniques to reduce the birth rate until the mass of humanity becomes extinct, leaving the world to the elite.

Or, if the elite consists of soft-hearted liberals, they may decide to play the role of good shepherds to the rest of the human race. They will see to it that everyone’s physical needs are satisfied, that all children are raised under psychologically hygienic conditions, that everyone has a wholesome hobby to keep him busy.

‘Power Concedes Nothing Without A Demand. It Never Did And It Never Will’ – Frederick Douglass

At this point, it is more than ever worth remembering the example of the Industrial Revolution, which began in the 18th Century.

As machines and mechanical tools revolutionised factories and how goods were produced, vast increases in productivity were attained, and the GDP of industrialising countries rose sharply. However, at this time working in a factory was no easy task. Workdays could be up to 16 hours long, workweeks usually involved working on 6 days out of the 7, and child labour was common.

Over the following decades, as the ordinary workers better understood the enormous added value their endeavours had a part in producing, they began to demand a fairer share of this additional value, so they could work less hours in better conditions and receive higher wages for it.

It took time, but their efforts were successful.

For example, in the UK a series of ‘Factory Acts’ was passed, which gradually reduced working hours, improved working conditions, and limited the amount of hours children could work.

Eventually, across much of the world (though by no means all of it), the 40-hour workweek became the standard schedule, while child labour was greatly reduced or banned outright, and legislation passed to ensure workers had adequate conditions and protections while doing the job.

Now, as we approach the age of automation which some have described as being like another Industrial Revolution, it is likely we will again see the same debates regarding working hours, wage levels, and employment terms which dominated the original Industrial Revolution.

Accompanying them this time will be discussions around other issues such as UBI, the 4-day workweek, and many more.

The outcome of this coming age of automation will be uncertain for some time to come, but it is important to note that whatever your feelings on this issue, or however interested or disinterested you may be in these topics, you will almost certainly be affected by them in the not too distant future.

Therefore, it is perhaps best to engage yourself in these matters, before they engage themselves with you.

Cyprus: Capital Gains and Immovable Property Taxation

Low taxation and straight forward bureaucratic procedures attract business people and investors from all over the world to invest in the Republic of Cyprus. Cyprus’ low taxation regime facilitates the expansion of business activities in the island. In the current article, I will present some useful information about capital gains and immovable property taxation schemes in Cyprus. The recent amendments of the Law 119(I)/2013 and the Law 120(I)/2013 aim at encouraging economic activity, attract more investors and simplify even more the Cyprus tax regime. According to the amendments of the legislations mentioned above, more capital gains are not taxed in Cyprus. The only capital gains that are taxed are those associated with the disposal of real estate located in Cyprus. Following the amendments of the Law 119 (I)/2013 and the Law 120(I)/2013, real estate owners will be taxed based on the value of their property.

Capital Gains Taxation:

Subject to certain exceptions (see the list below), the capital gain tax is charged on profits arising after the 1st January 1980, from the sale or transfer of immovable property in the Republic of Cyprus or company’s shares, located in Cyprus, that owns immovable property (Reference 1). Briefly, the net profit derived from the sale or transfer of real estate is taxed at the rate of 20%. The calculation of the net profit derived from the disposal embeds the inflation rate. Inflation is calculated based on the official Retail Price Index. Moreover, according to the amendments of the Law 119 (I)/2013 and the Law 120(I)/2013 the value of the real estate is calculated following the related provisions of the Immovable Property Law.

List of Exemptions:

  • Transfer of property due to death.
  • Gifts to children, spouses and any other relative up to the third degree.
  • Gift to a company. The shareholders of the particular company are and continue to be members of the donor’s family for five years after the offer of the gift.
  • Gift offered by a firm to its shareholders, given that the particular property was originally donated to the company. Moreover, the recipient is obliged to keep the immovable property for at least three years.
  • Gift to the government or to local authorities of the Republic of Cyprus for educational or other charitable purposes.
  • Exchange or sale based on the Agricultural Land (Consolidation) Laws.
  • Exchange of properties. In this case, the values of the real estate properties that have been exchanged must be the same.
  • Gain derived from the disposal of shares, listed on any Stock Exchange.
  • Transfers resulted by reorganisation.

Lifetime exemptions for individuals:

  • Disposal of own residence: Gain (85.430 euro)
  • Disposal of agricultural land by a farmer: Gain (25.629 euro)
  • Any other disposal of real estate: Gain (17.086 euro)

Immovable Property Taxation:

In Cyprus, the annual immovable property tax is imposed on every individual or legal person who owns immovable property in the island regardless of whether they are or not residents of the Republic of Cyprus. The tax they are obliged to pay is based on the total value of the whole immovable property registered in their name (Reference 2).

The immovable property tax is estimated according to the market value of the immovable property as at 1st January 1980 and is payable by the 30th September of every year at the Inland Revenue Department. In this point, it should be clarified that individual owners are exempt from this tax in case the 1980 value of their property is less than €12.500.

The relevant tax bands as revised in 2013:

  • If the assessed 1980 property value is less than 12.500 euro the annual tax rate is 0 (%) and the accumulated tax is zero.
  • If the assessed 1980 property value is between 12.500-40.000 euro the annual tax rate is 0.60 (%) and the accumulated tax is 240 euro.
  • If the assessed 1980 property value is between 40.001-120.000 euro the annual tax rate is 0.80 (%) and the accumulated tax is 880 euro.
  • If the assessed 1980 property value is between 120.001-170.000 euro the annual tax rate is 0.90 (%) and the accumulated tax is 1.330 euro.
  • If the assessed 1980 property value is between 170.001-300.000 euro the annual tax rate is 1.10 (%) and the accumulated tax is 2.760 euro.
  • If the assessed 1980 property value is between 300.001-500.000 euro the annual tax rate is 1.30 (%) and the accumulated tax is 5.360 euro.
  • If the assessed 1980 property value is between 500.001-800.000 euro the annual tax rate is 1.50 (%) and the accumulated tax is 9.860 euro.
  • If the assessed 1980 property value is between 800.001-3.000.000 euro the annual tax rate is 1.70 (%) and the accumulated tax is 47.260 euro.
  • If the assessed 1980 property value is more than 3.000.000 euro the annual tax rate is 1.90 (%).

Note: Every registered owner whose immovable property is more than €120.000 is obliged to submit a Declaration of Immovable Property (IR 301 and IR302) and pay the equivalent annual tax before the 30th of September.

Important Warnings:

Because of the delays in issuing Title Deeds, some developers are the registered owners of real estate property. In accordance with the law, the “registered owners” (in our case the developers) are obliged to pay annual declarations of their immovable property to the relevant authorities and pay the Immovable Property Tax, plus any late payment penalties.

Until Title Deeds are issued purchaser is obliged to pay only Property Transfer Fees so that to secure ownership of the property he or she has bought, which will then be registered in his or her name.

Nevertheless, in some Contracts of Sales, developers request the buyers to pay the immovable property tax by the time they take delivery of a property. In many cases, some developers charge purchasers outrageous sums of money based on the price the property was sold. Moreover, in some cases, the developers add to the whole amount the late payment penalties.

I would advise buyers to ask the developers to provide them with the adequate proofs that demonstrate that the immovable property tax that has been paid to the Inland Revenue corresponds to the land where the development has been constructed.

As a result, I am advising purchasers NOT to pay a developer any Immovable Property Tax unless the developer:

  • Provides a written proof of the amount of Immovable Property Tax that the developer has paid to the Inland Revenue for the land where the development has been constructed.
  • Provides buyer a written statement clarifying buyer’s shares of the aforementioned land.
  • Issue a written invoice on the company’s letterhead that states the agreed amount to be paid.
  • Issue a written company receipt for the amount that had been paid.

Invest in Cyprus: Have a proper legal support

As it was explained above, the amendments of the Law 119 (I)/2013 and the Law 120(I)/2013 together with the tax friendly regimes give more incentives to international investors and business people to expand their business activities in Cyprus. However, investors and business people should take into account that investing in real estate requires a proper legal guidance.

Reference 1: TAX DEPARTMENT: DIRECT TAXATION: Capital Gains Taxation http://www.mof.gov.cy/mof/ird/ird.nsf/dmlfaq_en/dmlfaq_en?OpenDocument#3

Reference 2: TAX DEPARTMENT: DIRECT TAXATION: Immovable Property http://www.mof.gov.cy/mof/ird/ird.nsf/dmlfaq_en/dmlfaq_en?OpenDocument#5

Working Capital for Business

One of the greatest needs that small businesses have is the need for working capital. Working capital is the lifeblood of the business, the fuel that funds the daily operations and ability to pursue near-term growth opportunities for the business. Working capital is officially defined as “….”. The financial equation for determining working capital is as follows:

(Account receivables + inventory + cash on hand) – (Account payables + prepaids)

There are numerous sources of working capital for businesses. Looking at the equation, one way to obtain additional working capital is to increase account receivables (i.e., sell more) or convert the receivables to cash by getting customers to pay sooner. Continuing to examine the equation, another way is to increase inventory. When examining a company’s balance sheet for the purpose of acquiring that company, it is important to examine how these parameters fluctuate as part of the working capital. A company can increase inventory and receivables significantly, drastically increasing the amount of “working capital” denoted. However, those receivables could be essentially non-collectible and the inventory could be obsolete. Either of these would essentially nullify the advantages of a large “working capital”.

You can access cash by getting customers to prepay their orders by offering significant discounts for doing so. For example, if a customer buys a monthly service for $100, you can offer them a yearly pre-paid, discounted rate of $1,000. That’s roughly 20% off but when you factor in the time value of money, the discount drops by 5-8% (depending on your internal rate). If you sell much larger service contracts or products, the difference in actual cash can be profound with prepaids. On the other side of the equation, you can get your supplier(s) to extend terms. Instead of payment expected within 15-30 days you may be able to push payment out to 90 days. You never know unless you ask.

From the perspective of the company owner, the larger the proportion of working capital in cash, the better. Cash can be spent on anything – to pay suppliers, pay employees, pay rent, pay for geographic expansion or product line development. Receivables and inventory not quickly converted to cash through turnover must be converted to necessary cash via financing that uses either or both of these two as the collateral for loans.

Working capital for business is something many small business owners do not plan. They often do not think about it until they encounter a cash crunch. Or sometimes, not until they have encountered a number of cash crunches and are tired of the stress of not knowing how they’ll make payroll or pay irate suppliers.

Some of the myriad sources of financing working capital for business include short term asset-based lines of credit, term loans, equipment loans, signature credit lines, supplier financing or extended payment terms, economic development grants, and factoring. Typically loans against receivables and inventory are short-term lines of credit, renewable annually. Some banks and other financing institutions will extend a term loan for three to five years against high grade collateral. (i.e., Accounts receivables that typically pay within 30-45 days and are with highly credit worthy customers and inventory that is replaced within a similar time frame.)

The important thing is to continually keep in mind what “working capital” is and what goes into it. It is vitally important to track your business cash and how quickly your company converts its short-term assets to cash. Not doing so can result in a significant shortage in working capital and, in short order, a liquidity crisis. If your company qualifies for a line of credit, get one. You don’t have to use it but you should have it on hand to use in case of a crisis. I have had clients who have lost major customers to bankruptcy. That unfortunate scenario occurred more often in 2010 and 2009 than in previous years but it could happen anytime. If your customers have large outstanding receivables that are close to 90 days, your exposure to such a scenario is drastically high. Even if your risk is low, when a customer cannot or will not pay receivables in a timely manner, where will your cash to run the business come from while you deal with the problem? Plan for the future and track your working capital. Your business will thank you for it in the form of stronger financial health.

Small Business Venture Capital Strategies

When launching a new small business, often the entrepreneur will consider venture capital as a source of funding. Here are 3 tips to ensure that venture capital funding can be secured when sending out your business plan:

  1. Send your business plan to the right people
  2. Venture capitalists tend to specialize in certain kinds of businesses. Some will specialize by industry, only investing in new energy companies, for instance, while others look for a certain size of company to invest in. It is worth doing the research to determine who the venture capital backers are for your industry, before you start sending out your business plan. Venture capitalists who are not specific to your industry can provide recommendations to make your plan more appealing to other venture capitalists. However, it would naturally be a mistake to send your plan to potential investors who will not even consider it.

  3. Make sure your business has the potential to be profitable enough
  4. Most venture capitalists look for a return of about 5-10 times their initial investment. For example, an investment in a company of $2 million should yield a return of $14-20 million after about five years. To satisfy these requirements, it is generally necessary to have a business which has the potential for a high rate of return on the amount invested. If the rate of return can reasonably be expected to be lower, such as for a clothing retailer, then it is probably better to look for an alternate source of funding, such as an investment or commercial bank.

  5. Remember to include an exit strategy for your investor
  6. Venture capitalists generally do not want to be involved with a new venture for an indefinite period of time. Most will plan to leave the new venture after about five years, so you should offer a clear explanation of how this may be achieved. There can be a variety of reasons for this; some venture capital managers require that the holdings periodically be sold off to acquire other offerings. Nonetheless, by demonstrating that you understand the limited time frame for many venture capitalists, you automatically make your plan more appealing than those which do not.

In summary, by sending your business plan to the right people, by recognizing what rate of return is necessary for venture capitalist involvement, and by including an exit strategy, you can improve your odds of securing venture capital funding for a new and growing business.

Profound Capital Markets for Renewable Energy – Eco-Plant Corporation

Investing in Renewable and Efficiency Energy is on the verge across the world. Individuals are becoming more sensible towards their environment, which resulted in more businesses adopting environmentally friendly business practices and becoming a sustainable green business. Converting into green business has been a wakeup call for many companies and for some companies it was already a mentioned market trend which was recognized by them quite early.

Following the global financial crisis, a more varied funding market is emerging in many countries. Established investors are assisting in filling the funding gap missed by the shrinkage in bank lending in the rouse of the crisis, particularly in long-term financing for infrastructure projects, and sitting alongside banks to offer a wider pool of capital to developers.

The economic climate overcoming the financial crisis of increased regulatory supervision and persistently low rate of interest led to pension funds and insurance companies in seeking an alternative source for a long-term stable investment.

Abundant number of pieces of evidence shows that renewable energy and energy efficiency are booming sectors for business. According to a report, 190 of the fortune 500 companies together saved around 3.7 billion dollars through their energy efficiency initiatives and collective renewable energy.

With the growing streak of this trend around the world, there is an increase in debt finance in the market from established investors mostly for an infrastructure project and more conventional renewable energy assets including solar PV, onshore wind and Bioenergy. Established investors that are on a quest to match long-term investments, index-linked liabilities and higher secure returns as compared to currently available bonds, are attracted by stable, long-term and index-linked type of assets.

A considerable amount of investment has been made in operating assets through which increasing capacity of risk has been taken by the investors. However, similar to banks, there seems to be a very little appetite for development risk factors. Established investors are moving faster towards banking counterparts in being able to provide reimbursement profiles and staged drawdown facilities that are suitable for this kind of financial markets.

Investments from non-bank institutions have often been through the purchase of participation in the secondary debt trading market or bond markets. However, a market of debt facilitates private placement (PP) which is a small group of sophisticated investors has been slowly developing.

Private placement market will entirely substitute other forms of finances for renewable projects. There are already long-established private placement market groups in many countries for corporate debt. Since the financial crisis, smaller national markets have also developed. To help encourage the development of private placement market, loan market association published a suite of standardizing the documentation for private placements across many countries for providing a proper framework. It is hoped that these suit will help to raise confidence in the market and will encourage investment by reducing the time and costs often associated with current private placements in certain countries.

Certain efforts are taken to simplify and make the process more transparent by turning towards more private placements. Governments across various countries have announced a tax exemption for private placements, this will help in encouraging both borrowers and institutional investors to invest in the capital market.

Many countries now support the growth of renewable energy sector and help in encouraging to further invest in energy infrastructure, renewable power and fossil fuels. Attracting cross-border investment and minimizing dependency on traditional bank debt, will further encourage institutional investment for key sector helping to stimulate growth and aid resilience in various economies.

Banks are also returning to the market which showed a substantial increase in long-term debt facilities offered by banks for renewable energy projects. In addition, many banking facilities are likely to preserve a significant role together with established investors by providing them ancillary facilities and deposit services. This includes catering to letters from credit facilities and working capital which non-banking investors are not able to provide the investors with. Likewise, the role of the bank is to provide trustee and agency with services in case the funds are ill-equipped.

Predictable sustained growth in Institutional Investment, alongside returning bank debt and other innovative funding structures, is creating a deeper impact on the capital market for renewable energy projects. Investors looking to invest in green business are coming across greater opportunities from future perspectives which is just a matter of time. Clean energy is just the tip of the iceberg. A recent study shows that companies could earn around 12 trillion dollars by 2030 in business revenue and saving by adopting sustainable, low-carbon business models. Investors all over the world are taking a note, as green bonds are increasingly seen as smart investments.

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