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What is Backward Integration?

There are many things that a business can do to grow and increase profits. Not only can they increase their customer base, but they can also expand their business. This could involve purchasing other businesses or just increasing their own operations. One type of business expansion that can be very successful is backward integration. This involves buying businesses that were previously suppliers. Owning such operations can have many benefits and we will consider these later in the article.

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7 Tips for Saving Money on Automobile Insurance

Anyone who has ever had to work for a living and manage the costs of living knows how very important it can be to budget living expenses, and reduce them to as low an obligation as possible.  It’s easy to cut out things like fast food, entertainment, and miscellaneous shopping costs, but it’s also helpful to know that you can cut costs associated with the necessities, too.  One such bill that can be adjusted is your automobile insurance bill.  Here are seven tips for saving money on automobile insurance.

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What is a Hardship Withdrawal?

Investing in the future is always a great idea, and this is why we bother with things like pensions. If we have spare cash today then the wisest thing to do is put this by for later. When we get older we will likely have far less potential for making money so we have to make provisions for this now. This is why most of us will regularly put money into our pension funds. But what happens if we hit a bad patch now? Will we be able to get this money back that we have put aside for our retirement? Well this is where the hardship withdrawal comes into play. It is an option with some 401K plans and it is a way to get to our money early if life gets too rough financially. The companies that manage these plans add the hardship withdrawal element as a way to encourage people to choose them. This is because we are more likely to put money aside for our future if we know that we can get to it in an emergency.

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What Is a Merchant Bank?

A merchant bank is quite different from the type of bank that can be found on a high street. This is not somewhere to go when you want to withdraw money or deposit checks. Merchant banks are not aimed at satisfying the needs of the general public. Instead they focus on other functions such as big business loans, stock underwriting, and international finance. These institutions can be responsible for huge sums of money. Their typical customer will be other banks or financial institutions. They are sometimes referred to as wholesale banks because they work in a similar way to wholesalers for shops.

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What is a Jumbo CD?

When some of us first hear about a jumbo CD we may get a mental picture of compact disc packed full of great music. In fact, this type of CD actually refers to ‘certificates of deposit’ and a jumbo one of these means that it involves a very large denomination. In most cases this will be denominations greater than $100,000. This type of certificate of deposit is usually considered to be a low risk investment.

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What is Unearned Income?

People will usually have different types of income. For instance, they may have their salary and other money they get for providing services. For tax purposes it is necessary to declare not only your earned income but also you unearned income. There can be confusion though, about what this unearned income actually refers to. In simple terms this unearned money is any money that you have been paid but you have not yet earned. For example, if you have been paid money in advance for some service that is not yet complete then this would be considered to be unearned income. There are also other types of unearned income that we will consider below.

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What is a Notional Amount?

Different financial instruments will have a face value. This is referred to as a notional amount or notional value. The word ‘notional’ means that something is just an idea and not a physical reality. The reason why we talk about a notional amount on a financial instrument is that it is an amount of money that doesn’t actually change hands. This numerical value is still important though, especially when it comes to calculating any payments that need to be made on a bond, future, or other derivative instrument.

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What is Structured Finance?

When it comes to obtaining a business loan there will usually be a number of options. In many cases a standard loan will not be suitable and some type of structured finance may be the best option. This type of loan is given based on the performance of the company in the past. This means that there is not the need to provide collateral in the same way as would be required with other types of loan. So long as the company can show a good cash flow in the past they can use this to secure the loan. Of course for it to be convincing to lenders this cash flow will need to have been consistent and enough to pay off any future repayments on the loan.

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