India’s Move to Right to Education

BACKGROUND.It was Saturday afternoon; the world seemed to be on vacation but me, as I was busy serving guests at a lunch party at my masters’ residence. Chatting and laughing was loud enough to be heard in every nook and corner of the house. But those were of least concern to me, because I had to respond to every single call for any requirement at the very word of the guests or the master in particular. It was 2009, and I was just seven, wearing a sweater and a half pant, watching a bunch of people boasting about the achievements of their wards and trying to prove ones child better than the other. When suddenly, an old man read from a magazine that the government was to pass a new act namely, Right to Education Act. But to me those routine talks about the household work made more sense than this new coming up topic, because neither I could read or understand there high-level conversation, which had diverted there talks from their children, on top of that I didn’t even understand, what the word ‘right’ meant. That elderly fellow said something like…History of the Act:The Free and Compulsory Education Bill 2003 was the first attempt of the Central government to draft a comprehensive legislation on education after the 86th Constitutional Amendment that made education a fundamental right. The Bill was an excellent example of bureaucratic empowerment, creating up to 6 levels of various authorities to ensure the provision of free and compulsory education. Furthermore, the reservation of up to 25% of the private school seats for the economically backward students to be selected by these authorities ensured that the Bill was a throwback to the old licence-permit-raj regime. Following widespread criticism, the Bill was discarded.The Right to Education Bill 2005 is the second attempt by the Central government to set the education system right. Some of the important provisions of the Bill:• Promises free and compulsory education of equitable quality up to the elementary level to all children in the age group of 6 to 14.
• Mandates unaided private schools to reserve up to 25 percent of the seats for students from weaker sections. The schools will be reimbursed by the lower of the actual school fee or per student expenditure in the government school. The aided schools will reserve “at least such proportion of their admitted children as its annual recurring aid bears to its annual recurring expenses subject to a minimum of 25 per cent.”
• Requires all remaining students to be accommodated by opening new government schools and within three years of the passage all students to have a school to go within their own neighbourhood.
• Forms School Management Committees (SMCs) comprising parents and teachers for state schools and aided schools. The SMCs will own the assets of the school, manage the accounts, and pay salaries.
• Establishes a National Commission for Elementary Education to monitor the implementation of the Bill, State Regulatory Authorities to address grievances under the Bill, and several ‘competent authorities,’ ‘local authorities,’ and ‘empowered authorities’ to perform a vast number of regulatory functions and meet out punishment to defaulters.
• Assigns all state school teachers to particular schools from which they will never be transferred-creates a school-based teacher cadre.The finance committee and planning commission rejected the Bill citing the lack of funds and a Model bill was sent to states for the making necessary arrangements.INTRODUCTIONAs is evident, even after 60 years, universal elementary education remains a distant dream. Despite high enrolment rates of approximately 95% as per the Annual Status of Education Report (ASER 2009), 52.8% of children studying in 5th grade lack the reading skills expected at 2nd grade. Free and compulsory elementary education was made a fundamental right under Article 21 of the Constitution in December 2002, by the 86th Amendment. In translating this into action, the `Right of Children to Free and Compulsory Education Bill’ was drafted in 2005. This was revised and became an Act in August 2009, but was not notified for roughly 7 months.The reasons for delay in notification can be mostly attributed to unresolved financial negotiations between the National University of Education Planning and Administration, NUEPA, which has been responsible for estimating RTE funds and the Planning Commission and Ministry of Human Resource and Development (MHRD). From an estimate of an additional Rs.3.2 trillion to Rs.4.4 trillion for the implementation of RTE Draft Bill 2005 over 6 years (Central Advisory Board of Education, CABE) the figure finally set by NUEPA now stands at a much reduced Rs.1.7 trillion over the coming 5 years. For a frame of reference, Rs.1 trillion is 1.8% of one year’s GDP.Most education experts agree that this amount will be insufficient. Since education falls under the concurrent list of the Constitution, financial negotiations were also undertaken between Central and State authorities to agree on sharing of expenses. This has been agreed at 35:65 between States and Centre, though state governments continue to argue that their share should be lower.KEY FEATURES OF THE ACT INCLUDE:1. Every child from 6 to 14 years of age has a right to free and compulsory education in a neighbourhood school till completion of elementary education.
2. Private schools must take in a quarter of their class strength from `weaker sections and disadvantaged groups’, sponsored by the government.
3. All schools except private unaided schools are to be managed by School Management Committees with 75 per cent parents and guardians as members.
4. All schools except government schools are required to be recognized by meeting specified norms and standards within 3 years to avoid closure.On the basis of this Act, the government has framed subordinate legislation called model rules as guidelines to states for the implementation of the Act.The family, I had been working for, (walia family) had always been caring for me, with occasional slaps and abuses, to which I had become accustomed to and accepted them as a part and parcel of my monthly income of 700 Rs along with square meals and the discarded cloths of the children to the master. But then that was my life……bhaiya and didi (son and daughter to the master) were both elder to me by 4 or 5 years respectively and during my free time often played along with me, but again I was reminded of my being a servant whenever I forgot that…they had thought me to read and write my name in Hindi, which I always kept scribbling at the corners of the walls which resulted in a colour change of my cheeks to red from white, whenever caught. That Act being the burning topic of those days always managed to occupy some space at the front page of every news paper, which further became a topic of early morning drawing room discussion for the family as it was that day and just like every normal citizen he also started which his speech, with the critique of right to education act and its loop holes….LOOPHOLES IN THE ACTThe Act is excessively input-focused rather than outcomes-oriented. Even though better school facilities, books, uniforms and better qualified teachers are important, their significance in the Act has been overestimated in the light of inefficient, corrupt and unaccountable institutions of education provision. Then the Act unfairly penalises private unrecognised schools for their payment of market wages for teachers rather than elevated civil service wages. It also penalises private schools for lacking the infrastructural facilities defined under a Schedule under the Act. These schools, which are extremely cost efficient, operate mostly in rural areas or urban slums, and provide essential educational services to the poor. Independent studies by Geeta Kingdon, James Tooley and ASER 2009 suggest that these schools provide similar if not better teaching services when compared to government schools, while spending a much smaller amount. However, the Act requires government action to shut down these schools over the coming three years. A better alternative would have been to find mechanisms through which public resources could have been infused into these schools. The exemption from these same recognition requirements for government schools is the case of double standards — with the public sector being exempted from the same `requirements’. By the Act, SMCs (school management committees) are to comprise of mostly parents, and are to be responsible for planning and managing the operations of government and aided schools. SMCs will help increase the accountability of government schools, but SMCs for government schools need to be given greater powers over evaluation of teacher competencies and students learning assessment. Members of SMCs are required to volunteer their time and effort. This is an onerous burden for the poor. Payment of some compensation to members of SMCs could help increase the time and focus upon these. Turning to private but `aided’ schools, the new role of SMCs for private `aided’ schools will lead to a breakdown of the existing management structures. Teachers are the cornerstone of good quality education and need to be paid market-driven compensation. But the government has gone too far by requiring high teacher salaries averaging close to Rs.20,000 per month. These wages are clearly out of line, when compared with the market wage of a teacher, for most schools in most locations in the country. A better mechanism would have involved schools being allowed to design their own teacher salary packages and having autonomy to manage teachers. A major problem in India is the lack of incentive faced by teachers either in terms of carrot or stick. In the RTE Act, proper disciplinary channels for teachers have not been defined. Such disciplinary action is a must given that an average of 25 percent teachers are absent from schools at any given point and almost half of those who are present are not engaged in teaching activity. School Management Committees need to be given this power to allow speedy disciplinary action at the local level. Performance based pay scales need to be considered as a way to improve teaching.The Act and the Rules require all private schools (whether aided or not) to reserve at least 25% of their seats for economically weaker and socially disadvantaged sections in the entry level class. These students will not pay tuition fees. Private schools will receive reimbursements from the government calculated on the basis of per-child expenditure in government schools. Greater clarity for successful implementation is needed on:• How will ‘weaker and disadvantaged sections’ be defined and verified?
• How will the government select these students for entry level class?
• Would the admission lottery be conducted by neighbourhood or by entire village/town/city? How would the supply-demand gaps in each neighbourhood be addressed?
• What will be the mechanism for reimbursement to private schools?
• How will the government monitor the whole process? What type of external vigilance/social audit would be allowed/encouraged on the process?
• What would happen if some of these students need to change school in higher classes?Moreover, the method for calculation of per-child reimbursement expenditure (which is to exclude capital cost estimates) will yield an inadequate resource flow to private schools. It will be tantamount to a tax on private schools. Private schools will end up charging more to the 75% of students – who are paying tuition’s – to make space for the 25% of students they are forced to take. This will drive up tuition fees for private schools (while government schools continue to be taxpayer funded and essentially free).Reimbursement calculations should include capital as well recurring costs incurred by the government.By dictating the terms of payment, the government has reserved the right to fix its own price, which makes private unaided schools resent this imposition of a flat price. A graded system for reimbursement would work better, where schools are grouped — based on infrastructure, academic outcomes and other quality indicators — into different categories, which would then determine their reimbursement.Quality of EducationThe quality of education provided by the government system remains in question. While it remains the largest provider of elementary education in the country forming 80% of all recognized schools, it suffers from shortages of teachers, infrastructural gaps and several habitations continue to lack schools altogether. There are also frequent allegations of government schools being riddled with absenteeism and mismanagement and appointments are based on political convenience. Despite the allure of free lunch-food in the government schools, which has basically turned the schools into a “dhaba” and school teachers to “chefs”, many parents send their children to private schools. Average schoolteacher salaries in private rural schools in some States (about Rs. 4,000 per month) are considerably lower than that in government schools. As a result, proponents of low cost private schools, critiqued government schools as being poor value for money.Children attending the private schools are seen to be at an advantage, thus discriminating against the weakest sections, who are forced to go to government schools. Furthermore, the system has been criticized as catering to the rural elites who are able to afford school fees in a country where large number of families live in absolute poverty. The act has been criticized as discriminatory for not addressing these issues. Well-known educationist Anil Sadagopal said of the hurriedly-drafted act:”It is a fraud on our children. It gives neither free education nor compulsory education. In fact, it only legitimizes the present multi-layered, inferior quality school education system where discrimination shall continue to prevail.”For me this new topic was like Ramayana being recited in the house, although Ramayana was still Hindi, but this was complete alien…it was Wednesday afternoon and the family members were all taking rest when I decided to run away from that house, and then actually did…but when was back home I was scolded brutally by my father who said ‘here comes one more, person with his mouth wide open, good for nothing creature’. After few days, I was as well enrolled in local village school, which served lunch to every student who attended the school. But the food wasn’t easy here too, every pupil was made to cook food and wash dishes, the left out time was utilized in fulfilling the desires of the school teacher. I did everything in the school but study. But my sister was not as lucky as me, although for sake of attending school, she was only enrolled in there but the reality was that she hardly attended any classes due to engagement in the household work, as that was more important and education for marriage than that what was written the school books. The only day we had a feast was when inspection was on the calendar. I did wanted to study but my pockets didn’t allow me, I always pondered but couldn’t make out what was wrong with my school when compared to those big ones in the cities but the answers were nowhere for me……THINGS WHICH CAN BE DONE FOR THE IMPROVEMENT.The RTE Act has been passed; the Model Rules have been released; financial closure appears in hand. Does this mean the policy process is now impervious to change? Even today, much can be achieved through a sustained engagement with this problem.Drafting of State RulesEven though state rules are likely to be on the same lines as the model rules, these rules are still to be drafted by state level authorities keeping in mind contextual requirements. Advocacy on the flaws of the Central arrangements, and partnerships with state education departments, could yield improvements in at least some States. Examples of critical changes which state governments should consider are: giving SMCs greater disciplinary power over teachers and responsibility of students learning assessment, greater autonomy for schools to decide teacher salaries and increased clarity in the implementation strategy for 25% reservations. If even a few States are able to break away from the flaws of the Central arrangements, this would yield demonstration effects of the benefits from better policies.Assisting private unrecognized schoolsSince unrecognized schools could face closure in view of prescribed recognition standards within three years, we could find ways to support such schools to improve their facilities by resource support and providing linkages with financial institutions. Moreover, by instituting proper rating mechanisms wherein schools can be rated on the basis of infrastructure, learning achievements and other quality indicators, constructive competition can ensue.Ensure proper implementationDespite the flaws in the RTE Act, it is equally important for us to simultaneously ensure its proper implementation. Besides bringing about design changes, we as responsible civil society members need to make the government accountable through social audits, filing right to information applications and demanding our children’s right to quality elementary education. Moreover, it is likely that once the Act is notified, a number of different groups affected by this Act will challenge it in court. It is, therefore, critically important for us to follow such cases and where feasible provide support which addresses their concerns without jeopardizing the implementation of the Act.AwarenessMost well-meaning legislation’s fail to make significant changes without proper awareness and grassroot pressure. Schools need to be made aware of provisions of the 25% reservations, the role of SMCs and the requirements under the Schedule. This can be undertaken through mass awareness programs as well as ensuring proper understanding by stakeholders responsible for its implementation.Ecosystem creation for greater private involvementFinally, along with ensuring implementation of the RTE Act which stipulates focused reforms in government schools and regulation for private schools, we need to broaden our vision so as to create an ecosystem conducive to spontaneous private involvement. The current licensing and regulatory restrictions in the education sector discourage well-intentioned ‘entrepreneurs’ from opening more schools. Starting a school in Delhi, for instance, is a mind-numbing, expensive and time-consuming task which requires clearances from four different departments totaling more than 30 licenses. The need for deregulation is obvious.Today, I am 15 in age, out of school and again away from home, working only to earn hand to mouth, to boast that am literate I have gained my elementary education but the fact is, I only know how to write my name in Hindi along with few more things and that’s not because of the school but I owe that to Mr walias’ children. And today, the biggest question for me is, why should anyone get enrolled in a school to gain elementary education, when that education is doing no good to him in the future? After 14 I had to leave the school, in spite of me being still in standard four, I couldn’t support my studies further so ultimately all my efforts went in vain, leaving me all to myself, just to ponder what should I do????CONCLUSION:The Act has failed in identifying what actually ails our education system and so not surprisingly it offers solutions that are either redundant or counter-productive. Its unrelenting faith in the bureaucracy and its seething animosity towards private initiatives in education reflect a bygone era. However well-intentioned the government may be, the central planning approach cannot serve the future needs of India. It has failed in economics and it cannot do any better in education. The promises made in the Bill then amount to political grandstanding.The fulfillment of the constitutional obligation does not necessarily require the state to build and manage schools. It can discharge its obligation successfully by restricting its role to the provision of financial resources to those who cannot afford and enabling all parents to make informed choices. The education system should be designed in such a manner that there is competition and choice. The schools should compete with each other to attract students and the students should in turn have the freedom to choose their school. This would ensure the best allocation of scarce resources and an improving quality of education.One way for the government to finance education that would guarantee access to school and would create right incentives for improving quality is to fund government schools on the basis of number students in the school. Instead of a lump sum grant, the government fixes a per student charge, which multiplied with the number of students, determines the grant that a school would receive. The state can also provide financial support to students in the form of a voucher that can be redeemed only at educational institutions to cover the expenses of education. With this education voucher, the student would be in a position to choose from amongst the various public and private schools.This would ensure competition amongst schools and thus good quality education. Furthermore, the financial resources of the state would be put to more effective use by targeting them towards the poor only and by optimally utilizing the management skills of the private sector. There is no doubt that privately managed institutions have made a tremendous contribution to the cause of education, and in the last decade particularly the unrecognised private schools for the poor. It would be a tremendous loss of social capital if these schools were forced to close down. If the government opens a new school and runs well, there would be no reason for parents to send their children to a fee-charging, unrecognised school.They would go out of business automatically. One more reason not to outlaw these schools with the passage of the Act is the chaos and harm it would create since they will have to close down well before the government will be able to open new schools across the country. In its zeal to fulfill its constitutional mandate, the government would achieve the opposite.Instead of treating private initiative as inherently corrupt and exploitative, the government should channel the private enterprise to help expand access and improve quality of education. It has been done with great success in many areas.a

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7 Things Successful Small Business Owners Do

If you’re stuck wondering how to be a successful small business owner, know this: running a small business often simply means making good use of successful small business ideas. Successful small business owners face many ups and downs throughout their work. They know that small business ideas cannot turn out successful unless they use the proper approach and strategies.If you want to be one of the few successful small business owners, remember that having a good strategy is crucial. Without the right strategy and a proper approach, you are not likely to achieve your goal.Some small business owners manage to overcome their everyday challenges, while others seem to give up after a while. So, let’s find out what successful small business owners do differently from the unsuccessful ones. Let’s turn their experience into your success through your small business ideas.1. MAKE ANNUAL REVISIONS OF YOUR BUSINESS PLAN AND BUDGETEvery business goes through changes every now and then, including your small business. For this reason, your business plan and budget should be somewhat flexible to bear such changes along with your business goals. Without revising your business plan and budget, you shouldn’t expect your business to flourish and expand.The flexibility of your business plan will help you avoid and overcome the eventual unpleasant surprises on the market. Also, such flexibility will give you some time to adjust to certain changes you may experience on your way.Every business experiences both success and failure points each year. In order to detect and estimate these points, you should revise your budget and business plan every year. While revising, you should check if you are still going in the right direction. If not, you may need to make some changes and adjustments to achieve better results in the upcoming period.Successful small business owners don’t hesitate to reallocate funds, if that is what it takes to achieve success. In order to increase profits, after they conduct a business revision, smart business owners define and implement the necessary changes immediately.2. UPDATE YOUR OFFER AND ADD VALUE TO ITPeople change, as do their needs and habits. As soon as you notice that you aren’t selling as much as you used to sell before, it is time to make changes. If people aren’t purchasing what you currently have to offer, that’s a clear hint that something needs to be done.A simple price cut may be the first thing that comes to your mind. As much as lower prices may seem more appealing to your customers, they also point to a devaluation of what you offer. Devaluation of your products or services is never a good thing, so try doing just the opposite – add value to your offers.The best way to update and add value to your products and services is by developing new offers. If possible, try to offer something completely new to your customers. You could offer product bundles, training programs and workshops, and so on.3. DARE TO BE DIFFERENTMost successful small business owners believe in daring to be different. They know their target consumers. Trying to target everyone and anyone as a consumer will get you nowhere fast. Instead of trying to make products for the masses, focus on a clearly targeted community and grow with it. Once you target your consumers, it is easy to understand their needs.Understanding your consumers is the secret to a successful business. When you know their needs, you can modify your products and services in order to satisfy them. Satisfied consumers will not only become your regulars, but they will also spread the word about what you offer. This may become the best marketing strategy for your business.Spreading the word about your products or services is called a referral marketing strategy. It’s been proven that most of the faster growing small businesses turn to this kind of marketing rather than relying on traditional advertising.4. KNOW YOUR COMPETITIONSuccessful small business owners know their competition. They know that keeping an eye on the competitors and understanding their policy and pricing is crucial to the business. It is wise to consider your direct competitors in your area, as well as indirect competitors.A direct competitor offers the same primary services to the same target group as you, and they are easy to follow on the market. However, an indirect competitor company offers the same or similar products as a segment of a wider product or service offering.In some cases, the indirect competitor may offer a product that is an applicable substitute for the original product. Successful small business owners know how to position their company against the indirect competitors. They take both types of competing companies seriously and they account for them in their annual business plan.5. HIRE THE RIGHT PEOPLEEven though hiring the right people for your business sounds obvious, it can be a really tough job for small business owners. Also, not hiring the right people could be a huge downfall for a small company. People who don’t share the concept of your business approach and goals are not the type of people you want to engage in your business.Candidates who don’t have the right temperament, skills, or talent for the job position that you offer can be too pricey for your company. Having the right people in the right job positions can make your company outstanding. Exceptional companies recruit exceptional people.6. ACCEPT TECHNOLOGY CHANGESTechnology changes on a regular basis nowadays. Successful business owners are very well aware of that, so they change accordingly. Doing things the way they were done years ago will not provide the same success nowadays.Accepting technological improvements can help your company become more effective and efficient. Keep yourself informed about the latest in new technology, and the improved solutions it brings. Choose the most appropriate ones for your business and adopt them. Your customers will be grateful and you’ll experience great benefits.7. TRUST YOUR INTUITIONIf you believe your intuition has been serving you well so far, listen to your inner voice carefully. Your instincts can lead you a long way. If you still feel strongly about something, regardless of the lack of facts or data – act on it. What seems right for other businesses doesn’t necessarily mean that it will work for you as well.Relying on intuition is often the first step out of your comfort zone, and the first step towards becoming a leading company on the market. While you watch your business grow and spread, remember that having faith in yourself and the business you are running is crucial. Being aware of your inner voice can lead you to making business decisions with more confidence and a greater success rate.

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Small Business Finance – Banks Cite Risks For Lack of Small Business Funding

Federal Reserve chair Ben Bernanke is upset over sweeping inconsistency in small business loan approvals in the United States. Bernanke says that banks throughout the nation are denying loan requests from credible small businesses. He urged banks to stop being passive, and start being more active, by lending more to small businesses, adding that they are “crucial to America’s recovery.”However, bankers feel disillusioned over Bernanke’s sentiments. They earn money on each loan that they issue. There is a profit-driven motivation for banks to lend. It would seem to be illogical for a bank not to issue a loan, to a credible small business. Most bankers feel that there are fewer businesses to lend to, but are eager to start lending to creditworthy candidates.Banks versus Washington, and the risks of lending.The problem remains the same, there is a gap between what the government wants versus the banks. Therefore, the urging by Bernanke seems to be valid from the standpoint of trying to ignite a spark of motivation in the system. Banks remain apprehensive to initiate a loan, without the backing of solid credit history.Banks are dealing with their own problems, including the latest credit crunch, and shrinking consumer spending. Small businesses have seen their property values dwindle, and funding being limited.Therefore, risk is hard to accept when it comes to lending. In states where there are large deficits, risk becomes more of a problem. Small businesses who have felt the added pressure of the decline of a state’s economy may have bad debt, foreclosures, and may face a worsening attitude about lending overall.The environment for bank lending at this moment is volatile at best. With businesses seeking to reduce their debt, consumers earning far less money, and markets continuing to level-out, it is uncertain when confidence will be seen in the power of lending. As this happens, consumer prices are being lowered to reflect the economical shift; thereby accentuating big business who can afford the cuts, and the minimizing of smaller businesses and niche markets who cannot.Legislation is also a key concern of many lending agencies and small businesses. Health care reform has businesses up-in-arms about what to do, and how they will be classified with the reform. They are unsure what the tax burden may be, and are worried that they will incur a tax burden too heavy to bear.Overall, confidence is what will spur the change in both areas.Washington is trying to motivate the lending world, with legislation such as H.R. 5297, TARP and the codenamed “TARP Jr.” all of which aim to help with small business lending. Most banks argue that the problem is creditworthiness. Lenders are reticent about any legislation such as TARP, but it must be stated that it never requires lending agencies to do actual lending, it only adds the incentive to do so. Therefore, there is not much of a reason for banks to argue against legislation such as TARP or small business lending programs.Ultimately, banks hold the power and are hesitant to give out loans to businesses they see as risks. However, there is always risk associated with lending; it is up to the lending agency to determine how much risk to bear, and at this time, they want to keep the tide in their favor.Some people agree that not all the blame can be put on the banks. It is easy for the media to vilify banking, and “big corporate” entities. However, every loan a bank makes is also scrutinized by Federal regulators. If a bank makes a loan that is not profitable, they must set aside cash to offset the potential loss. Therefore, why would a bank want to make a loan that is too risky? Some people also argue that regulations should be decreased to allow banks to make riskier loans, but this line of thinking seems flawed at best. The housing collapse was a direct result of mortgage lenders who took advantage of a lack of specific regulation regarding risk assessment, thereby making profit on loans that they knew could not be afforded over the long-term. It is obvious the blame is both on greedy lenders and naive borrowers, in that situation.Some argue that it is Obama’s fault.Others blindly put the fault on the Obama administration citing that debt spending will doom the economy. And that the federal government has somehow incited uncertainty in the market. However, the facts are easier to discern. During the Bush presidency, national debt almost doubled. It has almost doubled again since then. And since 2007, the national debt has increased at a rate of 4.14 billion per day. It also must be noted that first-term presidency’s experience the debt of the previous 4, or 8 years of legislation that they did not oversee. Small business owners feel that the government just adds to the red tape associated with operations. Most feel that they are already burdened with too much debt. They are less inclined to hire more workers due to the shrinking of capital, and the uncertainty of confidence in Washington.Others believe the banks are at fault.Many argue that the reason there are so many unworthy candidates for loans is because of a banks power to freeze credit, or tighten lending practices. Consumer confidence is also related to credit. If there is a freeze in credit, potentially as it is now, then confidence in the financial industry will fall. Other logic dictates that lending is about risk-management, if banks, who can acquire reserves at no, or very low costs, refuse to lend, then ultimately that is their choice. If there were virtually no risk with lending, the economy would be remarkable, and there would essentially be no, or very little risk taking with business loans. Therefore, the argument of citing risk as a problem does not seem to reflect the real sentiment of the banks; many feel that they just do not want to lend in the current economic condition.

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Money for a Car: A Guide to Auto Financing

Nobody wants to be the dumb buyer in a car buying deal. You have to be smart or you end up losing more money than you ought to. It is a very common scheme among car buyers to first get money in order to buy a new car.The term is called “auto financing” and it simply means how you pay for a vehicle. You can finance a car by taking out an auto loan to own a car, in which case, you have two options: You either use the money from the loan to buy the car, or use it for lease.If this isn’t your first time buying a car, you might already know that the salesman or your car dealer will be checking your credit report before starting with the negotiations. But this is not the only way you can go to get that new car of yours. The seller will try to sweeten the deal and offer you special car finance situations in exchange for throwing yourself totally at his mercy. That is not a path you have to choose.The key is preparation. Knowing what auto financing options you have before you get to the dealership will mean that you can take charge of your credit and take charge of your car loan.Just remember, when you negotiate with the salesman for the most favorable auto loan, nothing is permanent until you have it in writing. So haggle and then haggle some more. Once negotiations seem to be over, that’s when the sales contract is prepared.Inflated Interest RatesTo have the deal agreed upon by you and the salesman be put in writing in a binding contract is top on the list of the things you must do involving auto financing. Often involved at this part of the procedure is to determine monthly auto loan payments based on an interest rate. Now, as you well know, the interest rate varies from car buyer to car buyer. Your credit is only one of the factors and if the interest rate a car buyer qualifies for is inflated, then the dealership can make extra profit off your loan. That’s just one of the pitfalls in auto financing.Independent Auto FinancingWhen you have the approved auto financing option on hand, you can then proceed with the deal as a “cash buyer” so to speak as you already have the cash in hand from the loan and you are just buying the car from the dealer with that money. Car salesmen prefer customers to be “monthly payment” buyers as this makes it easier for them to obscure the total cost of the vehicle, to the detriment of your savings. So wizen up and take that independent auto financing option available.Set a Price RangeHaving a budget is the sensible thing to do. If you set a sensible price range for yourself, then you have less reason to go beyond that range and succumb to the temptation of overspending. If you’re really firm on that budget, no amount of sales talk can sway you. One good tip is to ensure that your monthly car payments and related expenses do not exceed about 20% of your monthly net income.Discounted Financing vs. RebateHere’s the dilemma to car buying: Many dealers offer an option between discounted financing or a rebate, but not both. Discounted financing means that you get zero-percent financing while rebate means that you get a certain amount of cash some time after purchase. The common error many car buyers make is that the zero-percent loan will deliver the most savings. But will it really?Get the Cash RebateIn most cases, it’s better to get the cash rebate and apply it against the purchase price of the vehicle. If you already have a pre-approved car loan, then that’s even better because you have positively no need of extra financing from your dealer. Just use your car loan to finance the car and let the rebate handle some of the charges.You will have to choose how long you want your lease to be and how much you’re willing to pay upfront. The obvious choice, of course, would be to pay as little as possible, but be sure to weigh other options as well. After that, the car is yours for the period stipulated in the lease contract.There are several other different plans those car buyers like you can adopt in order to make the most out of your money and reduce costs at the dealership. Understanding the credit process is just one way of being a smart buyer.For more information on auto financing and car loans, visit http://www.financeguide101.com/finance-reports/money-for-a-car-a-guide-to-auto-financing.html

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Revenue-Based Financing for Technology Companies With No Hard Assets

WHAT IS REVENUE-BASED FINANCING?Revenue-based financing (RBF), also known as royalty-based financing, is a unique form of financing provided by RBF investors to small- to mid-sized businesses in exchange for an agreed-upon percentage of a business’ gross revenues.The capital provider receives monthly payments until his invested capital is repaid, along with a multiple of that invested capital.Investment funds that provide this unique form of financing are known as RBF funds.TERMINOLOGY- The monthly payments are referred to as royalty payments.- The percentage of revenue paid by the business to the capital provider is referred to as the royalty rate.- The multiple of invested capital that is paid by the business to the capital provider is referred to as a cap.CASE STUDYMost RBF capital providers seek a 20% to 25% return on their investment.Let’s use a very simple example: If a business receives $1M from an RBF capital provider, the business is expected to repay $200,000 to $250,000 per year to the capital provider. That amounts to about $17,000 to $21,000 paid per month by the business to the investor.As such, the capital provider expects to receive the invested capital back within 4 to 5 years.WHAT IS THE ROYALTY RATE?Each capital provider determines its own expected royalty rate. In our simple example above, we can work backwards to determine the rate.Let’s assume that the business produces $5M in gross revenues per year. As indicated above, they received $1M from the capital provider. They are paying $200,000 back to the investor each year.The royalty rate in this example is $200,000/$5M = 4%VARIABLE ROYALTY RATEThe royalty payments are proportional to the top line of the business. Everything else being equal, the higher the revenues that the business generates, the higher the monthly royalty payments the business makes to the capital provider.Traditional debt consists of fixed payments. Therefore, the RBF scenario seems unfair. In a way, the business owners are being punished for their hard work and success in growing the business.In order to remedy this problem, most royalty financing agreements incorporate a variable royalty rate schedule. In this way, the higher the revenues, the lower the royalty rate applied.The exact sliding scale schedule is negotiated between the parties involved and clearly outlined in the term sheet and contract.HOW DOES A BUSINESS EXIT THE REVENUE-BASED FINANCING ARRANGEMENT?Every business, especially technology businesses, that grow very quickly will eventually outgrow their need for this form of financing.As the business balance sheet and income statement become stronger, the business will move up the financing ladder and attract the attention of more traditional financing solution providers. The business may become eligible for traditional debt at cheaper interest rates.As such, every revenue-based financing agreement outlines how a business can buy-down or buy-out the capital provider.Buy-Down Option:The business owner always has an option to buy down a portion of the royalty agreement. The specific terms for a buy-down option vary for each transaction.Generally, the capital provider expects to receive a certain specific percentage (or multiple) of its invested capital before the buy-down option can be exercised by the business owner.The business owner can exercise the option by making a single payment or multiple lump-sum payments to the capital provider. The payment buys down a certain percentage of the royalty agreement. The invested capital and monthly royalty payments will then be reduced by a proportional percentage.Buy-Out Option:In some cases, the business may decide it wants to buy out and extinguish the entire royalty financing agreement.This often occurs when the business is being sold and the acquirer chooses not to continue the financing arrangement. Or when the business has become strong enough to access cheaper sources of financing and wants to restructure itself financially.In this scenario, the business has the option to buy out the entire royalty agreement for a predetermined multiple of the aggregate invested capital. This multiple is commonly referred to as a cap. The specific terms for a buy-out option vary for each transaction.USE OF FUNDSThere are generally no restrictions on how RBF capital can be used by a business. Unlike in a traditional debt arrangement, there are little to no restrictive debt covenants on how the business can use the funds.The capital provider allows the business managers to use the funds as they see fit to grow the business.Acquisition financing:Many technology businesses use RBF funds to acquire other businesses in order to ramp up their growth. RBF capital providers encourage this form of growth because it increases the revenues that their royalty rate can be applied to.As the business grows by acquisition, the RBF fund receives higher royalty payments and therefore benefits from the growth. As such, RBF funding can be a great source of acquisition financing for a technology company.BENEFITS OF REVENUE-BASED FINANCING TO TECHNOLOGY COMPANIESNo assets, No personal guarantees, No traditional debt:Technology businesses are unique in that they rarely have traditional hard assets like real estate, machinery, or equipment. Technology companies are driven by intellectual capital and intellectual property.These intangible IP assets are difficult to value. As such, traditional lenders give them little to no value. This makes it extremely difficult for small- to mid-sized technology companies to access traditional financing.Revenue-based financing does not require a business to collateralize the financing with any assets. No personal guarantees are required of the business owners. In a traditional bank loan, the bank often requires personal guarantees from the owners, and pursues the owners’ personal assets in the event of a default.RBF capital provider’s interests are aligned with the business owner:Technology businesses can scale up faster than traditional businesses. As such, revenues can ramp up quickly, which enables the business to pay down the royalty quickly. On the other hand, a poor product brought to market can destroy the business revenues just as quickly.A traditional creditor such as a bank receives fixed debt payments from a business debtor regardless of whether the business grows or shrinks. During lean times, the business makes the exact same debt payments to the bank.An RBF capital provider’s interests are aligned with the business owner. If the business revenues decrease, the RBF capital provider receives less money. If the business revenues increase, the capital provider receives more money.As such, the RBF provider wants the business revenues to grow quickly so it can share in the upside. All parties benefit from the revenue growth in the business.High Gross Margins:Most technology businesses generate higher gross margins than traditional businesses. These higher margins make RBF affordable for technology businesses in many different sectors.RBF funds seek businesses with high margins that can comfortably afford the monthly royalty payments.No equity, No board seats, No loss of control:The capital provider shares in the success of the business but does not receive any equity in the business. As such, the cost of capital in an RBF arrangement is cheaper in financial & operational terms than a comparable equity investment.RBF capital providers have no interest in being involved in the management of the business. The extent of their active involvement is reviewing monthly revenue reports received from the business management team in order to apply the appropriate RBF royalty rate.A traditional equity investor expects to have a strong voice in how the business is managed. He expects a board seat and some level of control.A traditional equity investor expects to receive a significantly higher multiple of his invested capital when the business is sold. This is because he takes higher risk as he rarely receives any financial compensation until the business is sold.Cost of Capital:The RBF capital provider receives payments each month. It does not need the business to be sold in order to earn a return. This means that the RBF capital provider can afford to accept lower returns. This is why it is cheaper than traditional equity.On the other hand, RBF is riskier than traditional debt. A bank receives fixed monthly payments regardless of the financials of the business. The RBF capital provider can lose his entire investment if the company fails.On the balance sheet, RBF sits between a bank loan and equity. As such, RBF is generally more expensive than traditional debt financing, but cheaper than traditional equity.Funds can be received in 30 to 60 days:Unlike traditional debt or equity investments, RBF does not require months of due diligence or complex valuations.As such, the turnaround time between delivering a term sheet for financing to the business owner and the funds disbursed to the business can be as little as 30 to 60 days.Businesses that need money immediately can benefit from this quick turnaround time.

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Bridging The Gap Between Mobile Search and Local Businesses

It’s not a top-secret with regards to the huge opportunity that exists with aiding local firms get online. It is really among my main business solutions I handle and I try and remain on top of the current products and solutions, applications and training that guide others in this area. It’s not anymore enough to have a web portal and several traffic. People today are searching for local firms on multiple properties, they’re now engaging and reviewing these companies in different areas. One particular area that is extremely new to the mix is the fusion of mobile phone into the local search, you may do it every day and don’t think so much about it. Let’s tackle this in a lot more detail.Google MapsThis is a huge market right now and Google is paying very close attention and putting a lot of resources into this particular area. There has been a big shift in the way Google Places listings are displayed on the Google search results, but more importantly there is a massive social shift in the way people are finding local businesses. The amount of people who are using their mobile device and specifically Google maps to find a local business is rising at an alarming rate. Local businesses are struggling without it and the ones who are in the ‘know’ are reaping the rewards. This is what the President of Google, Eric Schmidt, has to say about the mobile landscape:”There are currently about 3.2 billion mobile subscribers in the world, and that number is expected to grow by at least a billion in the next few years. Today, mobile phones are more prevalent than cars (about 800 million registered vehicles in the world) and credit cards (only 1.4 billion of those). While it took 100 years for land-line phones to spread to more than 80% of the countries in the world, their wireless descendants did it in 16, and fewer teens are wearing watches now because they use their phones to tell time instead. So it’s safe to say that the mobile phone may be the most prolific consumer product ever invented.” – Eric SchmidtThe iPhone, Blackberry, Android all allow easy searching on the spot to find local businesses through Google Maps (displaying Google Places listings). Experts predict 80-90% of people will be DEPENDENT on mobile maps in the next 24 months.QR CodesHave you ever heard of a QR code? Have you ever seen a QR code? In case you have not yet, you will likely to start noticing them in a lot of places. You’ll see them on traditional advertising media (sides of buses, ads in bars, restaurants, business cards, boarding passes, flyers, brochures, etc.). In no time, you and each business out there will one or more of these codes. Just recently a lot of vineyards are putting them on their wine bottles, makes it easy to get their website address or more information on the wine bottle sitting in front of you!Google has created roughly 49 million+ Places listings for local businesses. Almost 9 out of 10 of these go unclaimed. This simply means, these companies are usually not optimized nor have vital information and facts filled in apart from the address (which often could be wrong) and the organization name. The Places listing allows you to go far beyond that information, providing detailed hours of operation, pictures, videos, services offered, coupons, reviews, citations, and much more.Merely like a regular Google search result, these kinds of information and facts get ranked in Google whenever people conduct local queries (lookups that normally include a area identifier such as “Toronto” or if an individual utilizes the mobile maps program on Android, iPhone or BlackBerry). In most cases, people head off to Google maps even on their desktop computer to be able to track down local vendors and your business has the chance to be on the top of the list.This does not require high prices to develop new websites or redesign existing websites. These are hosted by Google so these local businesses don’t even need an existing website, nor one in the future! They can get on the front page of Google with an optimized Google Places listing during the most important searches, the local ones!It’s time to start thinking beyond the website and the browser when helping local businesses, and reach out to their customers using mobile services. The percentage of their customers who will find a local service with their phone is rising and rising FAST!

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How is Parkinson’s Disease Treated?

Parkinsons disease is a comparatively common condition of the nervous system which is as a result of problems with the nerve cells in the part of the brain which generates dopamine. This is a chemical substance that is needed for the smooth management of muscles and motion, so the symptoms of the disorder is a result of a reduction of that chemical. Parkinson’s disease mostly impacts individuals aged over 65, but it can and does come on at younger ages with 5-10% developing before the age of forty.

The chief clinical features of Parkinson’s disease are a tremor or shaking, that will commences in one arm or hand; there is often a muscle rigidity or stiffness along with a slowness of motion; the stance gets more stooped; additionally, there are equilibrium concerns. Parkinson’s can also cause greater pain and result in depression symptoms and create problems with memory and sleep. There isn’t any specific test for the diagnosis of Parkinson’s. The identification is usually made primarily based on the history of the symptoms, a physical along with neural evaluation. Other reasons for the signs and symptoms also need to be eliminated. There are imaging assessments, such as a CAT scan or MRI, that can be used to eliminate other issues. From time to time a dopamine transporter diagnostic might also be utilized.

The actual cause of Parkinson’s isn’t known. It does appear to have both genetic and environmental elements with it plus some specialists think that a virus may induce Parkinson’s as well. Decreased amounts of dopamine and also norepinephrine, a substance which in turn is responsible for the dopamine, have already been found in those with Parkinson’s, but it is not yet determined what is causing this. Unusual proteins which are named Lewy bodies have been located in the brains of those who have Parkinson’s; nevertheless, experts don’t know what role they may play in the development of Parkinson’s. While the specific cause just isn’t known, studies have identified risk factors that establish groups of people who are more prone to develop the condition. Men are more than one and a half times more prone to get Parkinson’s as compared to women. Caucasians are much more prone to get the condition as compared to African Americans or Asians. Those who have close members of the family who have Parkinson’s disease are more likely to develop it, implying the inherited contribution. A number of toxins could raise the potential for the problem, implying a role of the environment. People who experience difficulties with brain injuries can be more likely to go on and have Parkinson’s disease.

There is no identified remedy for Parkinson’s disease. That will not imply that the signs and symptoms can’t be handled. The main method is to use medicines to raise or replacement for the dopamine. Balanced and healthy diet together with frequent exercise is crucial. There may be changes made to the surroundings at home and work to keep the individual involved as well as active. There are also some options sometimes for brain surgical treatment which can be used to relieve some of the motor symptoms. A diverse team of different health professionals are often involved.

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Understanding the Impacts of Gout

Gout is among those historical problems because there are numerous mentions of it in historical literature, at least since ancient times. The traditional typecast of it is that it is related to the upper classes that binge in alcohol and certain foods. This image was pictured in early art work illustrating people who had gout. Gout has stopped being viewed as a problem of over consumption, because of the current research demonstrating an important genetic component to it.

Gout is a distressing inflammation related disorder which mostly impacts the joints, most commonly the great toe joint with the feet. It is because of uric acid crystals getting placed in joints in the event the bloodstream uric acid quantities are increased. The uric acid comes from the breakdown of purines which come from the consuming of foods like venison, salmon, tuna, haddock, sardines, anchovies, mussels, herring along with alcohol consumption. It is possible to understand how that old misconception was produced according to the overindulgence of the higher classes in those types of food and alcoholic beverages. The actual problem is not really the quantity of those foods which can be consumed, but the actual genetics of the biochemical pathway which usually breaks the purines in these food items down into the uric acid and how your body deals with it.

While diet is still important in the treating of gout and lowering the quantity of food which have the purines with them continues to be considered essential, however it is becoming apparent recently that this is just not sufficient by itself and just about all those who have gout probably will need pharmaceutical management. It goes without saying that drugs are likely to be needed for relief of pain throughout an acute flare up. The acute phase of gout is extremely painful. Over the long term there are two forms of drugs which you can use for gout. One kind of medicine block chemicals in the pathway which splits the purines into uric acid, which simply implies there will be much less uric acid in the blood stream that could find its way in to the joints to trigger an acute episode of gout or lead to the long-term gout. The other main kind of drug is one that can help the renal system remove much more uric acid. This would also reduce the urates in the bloodstream. Generally, only one of those drugs is all that’s needed, however occasionally both are needed to be utilized at the same time. Since these prescription medication is ordinarily pretty successful, that will not indicate that the life-style and eating habits changes may be pushed aside. Local measures, including wearing good fitting shoes if the big toe joint gets too painful is important. Also ice packs during an acute flare up will also help with the relief of pain.

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How To Approach Removing Asbestos Removal in Sydney

Planning to renovate your home built decades ago? Well, you got to be careful! There is a good chance it may have asbestos. This is a popular building material used throughout Australia before it was completely banned in 2003.

Asbestos is not generally considered hazardous. In fact, homeowners are only allowed to remove up to ten square meters of non-friable asbestos. More than that, people are advised to seek professional help, especially handling friable ones. Because of the health risks involved, DIY removal is considered illegal.

This is particularly prohibited in Sydney. Hence, the expertise of your trusted asbestos removalists is required to handle the dangerous job.

Why Removing Asbestos Can Be Dangerous?

There are many DIY ideas. Some are equally fun. Whilst, others can be hazardous, like removing asbestos by yourself.

Here are some reasons why removing asbestos without proper knowledge can be dangerous:

Exposure to diseases

Small quantities of asbestos are present in the air most of the time and are being breathed in by everyone without ill effects. But, exposure to high levels of asbestos for a long time is pretty serious. It can cause asbestosis, lung cancer, and mesothelioma.

Accidents and Injuries

Asbestos is used in cement sheeting, drainage and pipes, guttering, and even roofing. But, asbestos roofing can become fragile over time. Hence, you might risk breaking it apart, releasing harmful fibres into the air. Also, a single sheet of asbestos can weigh 30-50 kilograms. Such weight can cause injuries.

Wrong removal and ill-fitting equipment

You may not know the proper ways to remove asbestos, exposing you to very harmful fibres. And the recommended removal equipment is quite expensive. You don’t have to deal with it on your own.

How Much Does It Cost To Remove Asbestos?

Asbestos removal can be pretty costly. It is determined by the type and size of the area, as well as the amount of debris to be removed. The safety risks of asbestos also increase the cost, especially when friable asbestos is involved. But health is wealth. It is always worth the price.

Most junk removalists in Sydney are priced from $99.99 per cubic metre, however, given the highly dangerous nature of asbestos, prices may be higher. It’s important to receive a few quotes before proceeding with an asbestos removal service.

How To Find The Right Asbestos Removal Provider?

There are a few key things you can do right now to ensure that your search for a provider is a successful one. They include:

Check Online Reviews

Does the asbestos removal service provider have an abundance of positive Google reviews? Check the history of their reviews to make sure that they are in-fact, legitimate. Businesses with legitimate reviews tend to have a stream of reviews that span across years of their lifetime; not just all within a few months.

Service Locality

Hiring a local asbestos removal business is always best. This ensures that you receive the best pricing as the business is local and nearby to your location. Typically, local businesses tend to take more pride in their workmanship as a positive reputation is key to their ongoing success.

Number of Years in Business

Given the highly dangerous nature of asbestos, it’s important to check how long the business has been in operation. A business who has over 10 years servicing the local community may provide cheaper pricing, given that they likely will have more refined practices.

Conclusion

Take your time while in search of a suitable asbestos removal provider. Due-dilligence is important and always shop around for the best quotes.

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A Pall Settles Over America

I see it in their eyes, downcast and wary. I see it in their steps, shuffling and tentative. When they talk, they use a word I rarely hear, depressed.

These are the producers, those who make the country work. Hourly and salaried employees and managers, who go to their jobs every day, work hard and provide for themselves and their families.

They’re the kind of people who have been with us since the country began. Back then, we called them Pilgrims, sod-busters, and settlers. Today they go by many names, Physician, Technician, Engineer, and Laborer. But for all of them, life has a rhythm, just as it did two centuries ago, that comes from our agricultural heritage.

Spring has always been the time for planting, and looking forward to the year ahead. Summertime is when they cultivate the crops. Fall is harvest time when we enjoy the fruits of our labor and thank God for blessing us. Winter is the time of austerity, the time to prune, the time to cut back.

But not this year. This year, we are still in harvest time. Yet the pruning has already begun. Major companies across this land are already cutting back, eliminating staff to reduce.

For thousands of laid-off workers, it comes at the worst possible time. Just before the holidays. A time when many who have children will have to cut back this Christmas. There will be little joy for those who lost their jobs these holidays.

If you’ve lived through a corporate “downsizing,” you know that anxiety runs high. No matter how often the boss has assured you that you will be kept on, you’re never sure about your future. Should you start looking for a new job now, or wait? Does the boss know what lies ahead, or might he be on the corporate chopping block? There is no job security once layoffs begin.

But there is much more to our collective angst this year than at any time in our memory. These corporate cutbacks are merely reflecting a more significant issue, an issue that is nationwide.

Our country is headed in the wrong direction. That is a sentiment shared by three-quarters of us. And we’ve felt that way for a couple of years. Producers know that the country should be operating better. Yes, there were all difficulties associated with the Pandemic. But those are now behind us.

Today recovery should be well underway. But it’s not. Despite all the trillions of dollars pumped into the system, our standard of living is falling. Each day inflation marches on; real income is declining. Gasoline, food, and shelter costs accelerate in real-time, but a salary rise comes annually. Corporate raises will arrive at the end of the year and likely come nowhere near the level of inflation we’ve already experienced.

Producers see all of this.

Producers also know that many, perhaps most, of our problems come from Washington. We see that a feeble old man has his bony fingers on the nation’s tiller, steering us straight for the shoals. He, and those who surround him, have a policy of austerity. In their eyes, less is better, and fewer is preferred. We should use less heat this winter, drive smaller, preferably electric vehicles, and eat vegan. And the less we consume, the better. From this perspective, we are the problem. Our destiny is to have shortages and wants. And they’ve pushed us in that direction.

However, these leaders told us last week that we could change everything. By walking into our voting booth, we could make our voices heard. We, the people, could take this country in a new direction that our leaders were indeed subject to the will of the people.

That didn’t happen. Counting votes has become a haze of computational complexity and slow-walking results. So that the incumbents in Washington get the results they want, it’s the complete inversion of the principal and values that the country’s founders intended. But there it is—today’s reality.

It’s the reason the word I hear most often from Producers today is: depression. And I’m afraid that’s where we’re headed.

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