Starting a new business is a daunting task, not least because of financial systems you have to set up including your business finance systems. There are many parts to your business finance. It doesn't matter what size business is there is still a degree of complexity. We however are concentrating on smaller businesses and financial requirements placed upon them. The purpose of this article is to provide some helpful background information, which we hope will prove useful.

The types of finance available to small businesses is pretty similiar to that available to private person. Financial institutions will offer usual banking applications such as business current accounts, business credit cards, business loans and mortgages. One notable difference however is that charges tend to be higher and conditions tighter for business products over personal ones. The majority of banks will offer a full range of products and have dedicated departments and personnel in place to help you and your business.

Online business banking is especially important to small business, particularly for those business people who are continually on move. Previously a small business man or women would be forever in and out of local branch of their bank to either cash cheques, pay in recieipts, arrange overdrafts or finance. With arrival of online banking and accessibility of web, it is now easy to control finances of company at any time of day and any place. The days of wasting time in banks, which would be better employed running business, are thankfully in past.

Also known as a Home Equity Conversion Mortgage (HECM)a reverse mortgage,is a popular way older homeowners (62+) can convert part of equity in their homes into tax-free income without having to sell home, give up title, or take on a new monthly mortgage payments.

Before explaining a reverse mortgage, let's review features of a Standard Mortgage:

With a standard loan or mortgage, your income stream is used to 'qualify' for mortgage or loan. The lender will want to see that you have enough cash flow from your job and other sources of income in order to make payments.

By securing this loan or mortgage against your house, bank has extra security. After all, if you stop paying, they can take away your house.

As years go by and you continue to make payments, you will build up 'equity', which is difference between what your house is worth, and how much you owe on loan or mortgage What you owe will be continually reducing as you pay off principal.

A Reverse Mortgage ... Reverses The Process:

A reverse mortgage, in contrast, requires no proof of income, no credit checks etc.. You simply have to own home you are borrowing against.

The reason for this is that interest payments are 'rolled up' on reverse mortgage - i.e they are added to loan, and not repaid monthly.

Over time, of course, this starts to eat up your equity, because as each interest payment is added to loan, interest starts being charged on previous interest too!

Who Would Benefit From A Reverse Mortgage?

Older homeowners (62+), who struggle on limited pensions are usually living in properties that have soared in value in recent years. With reverse mortgages they can unlock some of value in their homes and remain in property at same time, thus enhancing their retirement years.

These reverse mortgages are becoming more popular with seniors.

Paying Back The Loan

There are NO monthly payments due on a reverse mortgage while it is outstanding. The mortgage/loan is repaid when homeowners cease to occupy home as a principal residence, whether homeowner (the last remaining spouse, in cases of couples) passes away, sells home, or permanently moves out.