Overseas Tax Holiday For Tech Giants May Come With A Catch

Even so, one worry is that the overseas tax holiday for tech firms may not turn out as the bonanza its made out to be. That depends on whether legislation puts conditions on how money could be spent and creates enforcement mechanisms.

Rather than see the money go toward company stock buybacks or acquisitions, Trump and Congress could steer money toward job creation and capital spending, says a UBS analyst.

If the (Trump administration) wants to really drive inward investments within the US there might have to be some sort of mandated use of cash, maybe to spend it on (capital expenditures). As yet, we do not know, UBS analyst Geoff Robinson said in a report.

Theres reason to think Robinson might be on the right track.

Theres trillions of dollars offshore. We want to get that back into America, Gary Cohn, Trumps chief economic advisor, said in a recent interview. We want the companies to bring the money back and put it back into the economy. We want them to create jobs.

Cash-rich tech companies like Apple,Microsoft (MSFT), Google-parent Alphabet (GOOGL) and Ciscocurrently would pay a 35% tax on so-called repatriated earnings. Rather than take the tax hit, theyve kept the money overseas.

President Trump has proposed a one-time tax of 10% on offshore earnings while the Republican-controlled House has proposed a lower 8.5% rate.

The overseas tax-break that Congress passed in 2004 was called the American Jobs Creation Act, but didnt do much to stimulate the economy, analysts say. The AJCA taxed repatriated earnings at a 5.25% rate.

The top five firms in bringing back cash in 2004 were drug companies Pfizer (PFE) and Merck (MRK), as well as Hewlett-Packard, Johnson amp; Johnson (JNJ) and IBM (IBM). According to the IRS, $312 billion was brought back in all.

However, only 10% of companies eligible to bring back cash in 2004 did so, says Richard Lane, an analyst at Moodys Investor Service. Many companies kept cash overseas because of AJCA requirements, he said.

The AJCA required companies to reinvest tax savings in worker hiring and training, infrastructure, research and development and capital projects. According to UBS, however, Funds in 2004s repatriation may have been earmarked for capital investment but ultimately were spent in large part on share repurchases.

UBS says that happened because the AJCA did not include a tracking mechanism so the government could audit companies and gauge compliance. The Trump administration could put better enforcement mechanisms in place.

Samp;P 500 companies have more than $2.6 trillion in overseas cash. Some of that may be needed to continue funding foreign operations.

The companies currently with the most overseas cash are Apple, Microsoft, Cisco, Google and Oracle (ORCL), Moodys says.

While Cisco has stated any cash brought back to the US could be used for reducing debt on its books, analysts have other ideas.

If a tax holiday is approved, BMO Capital Markets said in a report thatit expects Cisco and Hewlett Packard Enterprise (HPE) to focus more on acquisitions, while Apple and smaller companies would likely lean more toward capital return.

In the case of Apple and Cisco, some analysts envision enough cash being brought back to fund transformative deals. Apple has about $250 billion in cash, growing at about $50 billion a year. About 90% of Apples cash is overseas. A one-time, 10% repatriation tax would give Apple some $220 billion for acquisitions or buybacks, Citigroup analyst Jim Suva said in a report. Suva speculated that Apple could buy large companies such asNetflix (NFLX), Walt Disney (DIS) or Electronic Arts (EA).

Cisco, meanwhile, could bring back up to $56 billion in cash from overseas, analysts say. In a report, Credit Suisse speculates that enterprise software providers ServiceNow (NOW), Splunk (SPLK), or computer security firm Palo Alto Networks (PANW) could be on Ciscos shopping list. Pacific Crest Securities adds Red Hat (RHT) and Nutanix (NTNX) to the list of possible Cisco targets.

Intel (INTC) is among semiconductor companies with a cash hoard overseas. Intel could bring back about $12 billion, says BMO Capital Markets. Nvidia (NVDA) and Qualcomm (QCOM) also have significant overseas cash. But, BMO Capital does not expect a Trump tax holiday to spur an acquisition spree among chipmakers.

Payix names finance & accounting leader

Zarate has worked in corporate financial roles for 10 years, including as controller for Innovate Auto Finance. Prior to working for Innovate, she also held positions with Alcon Laboratories and Marketing Management.

“We are very excited to add Priscilla to the Payix leadership team. She brings tremendous experience and financial discipline to the organization, which will be of great help to us as we develop our client base and grow our business,” Chestnut said.

Bank Muscat offers Ramadan Sayyarati auto finance option

Guaranteeing the fastest turnaround, the feature-rich Sayyarati finance can be obtained within the shortest possible time at low interest rates starting from 3.5 per cent, equivalent to the 1.91 per cent flat rate. The Sayyarati package includes financing for up to eight years for new and used vehicles, the lowest monthly payment option, on-the-spot approvals and option for motor insurance funding with the lowest monthly payment in the market.

Customers are not required to furnish post-dated cheques, making Sayyarati the easy, convenient and completely hassle-free way to own a new car. Notably, Sayyarati finance can be obtained from all Bank Muscat branches spread across Oman.

Facilitating convenience during Ramadan, the Sayyarati Centre at Wattayah will have extended timings. Customers can also apply for Sayyarati finance through Saed sales unit.

Abdullah Tamman al Mashani, DGM – Institutional Sales amp; Products Development, said, “Unique in all aspects with unparalleled benefits, Sayyarati is the preferred vehicle finance facility in Oman for both citizens and expatriates. The Ramadan offer includes various unique benefits, making it quicker, easier and more affordable to own one’s dream vehicle. Oman is home to the world’s best known automobile brands. By encouraging people to buy top quality vehicles, Bank Muscat reiterates its commitment to road safety, thereby promoting safety and happiness in Oman.”

Sayyarati auto finance enhances the value proposition offered to customers across all dealers and brands, including motor insurance at low premium through the bancassurance channel of Bank Muscat. Post-dated cheques are not required; payment is automatically debited on a monthly basis. Customers can visit any auto dealership or Bank Muscat branches to avail the special Ramadan Sayyarati finance.

Record audience as IAFN conference reveals future of auto finance

Technology is driving fundamental changes in the auto finance market, disrupting the supply chain and transforming the ways in which the industry operates, delegates at the annual International Auto Finance Network conference heard on Tuesday.

Car debt adds horns to UK’s Brexit vulnerability

LONDON (Reuters Breakingviews) – Britain’s credit boom is a cause for concern. Not for the obvious reasons: rates are low and the banking sector is sturdy. The issue lies with another big UK industry – cars.

Auto finance is driving up the stock of non-mortgage debt, which includes credit cards and personal loans and hit 197 billion pounds at end-March. That’s close to the 2008 financial crisis peak, and household debt as a proportion of disposable income is rising. Since 2014, car finance has consistently been the biggest driver of annual consumer credit growth, which is now running at more than 10 percent.

Overcoming Business Loan and Commercial Mortgage Finance Problems

One of the most difficult business loan scenarios occurs when a commercial borrower is rejected for either a commercial mortgage or commercial loan. There are five specific reasons that account for a healthy majority of business finance rejections. These common business financing application problems are particularly applicable to commercial real estate investment property financing.

Commercial borrowers are likely to be confused when their commercial loan application is turned down and will probably be unsure as to why it happened and what to do next. For each of the five major reasons that a bank might decline a commercial mortgage, a practical strategy is provided for converting the declined commercial real estate loan into an approved business loan.

UK rates, banking sector steady but runaway auto finance is a major concern

Britains credit boom is a cause for concern. Not for the obvious reasons – rates are low and the banking sector is sturdy. The issue lies with another big UK industry: cars.

Auto finance is driving up the stock of non-mortgage debt, which includes credit cards and personal loans and hit 197 billion pounds ($253.78 billion) at end-March. Thats close to the 2008 financial crisis peak, and household debt as a proportion of disposable income is rising. Since 2014, car finance has consistently been the biggest driver of annual consumer credit growth, which is now running at more than 10 percent.

Unlike 2008, lenders are not likely to be hugely exposed. The Bank of England says they have enough capital to swallow over 18 billion pounds of consumer credit impairments that might stem from a doubling in the unemployment rate. Instead, the personal contract purchase deals popular with Britains drivers leave exposure with the finance provider, which tends to be a car manufacturer. The latter typically buys back the car for a residual value after a certain period.

Delinquencies on bonds backed by car loans are no higher than in 2014, according to Moodys. Still, the residual value of bought-back cars has fallen over the same period. The auto industry, which employs 814,000 in the UK, inherently has a reason to keep pushing car finance, because it improves sales of vehicles. Moreover, companies have an incentive to overstate residual values so they can justify offering finance at a lower fee.

Imagine real wage growth stalls – say, because Britain fails to secure a decent trade deal with its European peers when it leaves the EU. There would be less demand for auto finance, and less willingness to provide it. Already, consumer confidence is at its lowest since last Junes referendum. The Bank of England reckons that two-fifths of the fall in UK consumer spending after 2007 came from outlays by households with higher debt levels on bigger-ticket items like cars.

An automotive slowdown would hit Britains prospects. If carmakers stop pushing cheap finance, and fewer cars get bought, they are likely to start reining in production of vehicles in the UK, which hit a 17-year high in 2016, according to trade body SMMT. Banks or no banks, if the credit boom stalls the economy will feel it.

The author is George Hay, a Reuters Breakingviews columnist. The article was first published on Reuters Breakingviews. bizopinion@globaltimes.com.cn

MBC funds: Providing an immediate access to your business financing.

People run business to earn benefits and to make all its resources to the full use. However, people due to increasing competition today, takes risks calculated for their business objectives. Here, money also plays an important role. Risk and crisis are an integral part of any business and the more apt you are at managing business crisis better is your chance to prosper. However to survive and recover from a crisis is the most important element required by any entrepreneur. Nature of the business is in two categories. They are new or seasoned business. Obviously the business finance depends on this nature. Whatever may be the type, the fact is there are profits earned and these profits are helpful for them to do some activities like buying machinery, tools, furniture, land, raw material, expenditures etc. This often helps them to develop their business as well.

Corporate finance is the other term coined for the taking aid from the government, in order to set your business. There are many banks in America who are willing to give loans on business schemes. Brokers’ agents and financial institutions are also there to help you and ready to explain you about the lengthy procedures for finance of a new business.

Working Capital Financing & Asset Based Lenders

Information on working capital financing and asset based lenders in Canada. These solutions solve cash flow challenges faced by Canadian small and medium enterprises in their search for business credit.

Asset based lenders could well be providing your competitors with all the working capital and cash flow solutions you need. The acronym for this type of financing is ABL; simply speaking its daily cash flow provide against your current, and sometimes not so current assets.

Put simply, this facility allows you to margin your receivables, inventory and, should you choose, fixed assets and real estate. You are probably saying to yourself that you could arrange financing on your own those fixed assets and real estate. However, you can use those assets as collateral for your daily revolving line of credit.

So asset financing typically doesnt bring debt or long term loans to your balance sheet; you are just leveraging your assets (thats the A in ABL) for daily cash flow and working capital.

Why are we claiming that this type of working capital financing just might be your key to business success? Simply because you have probably found it has been challenging to get the full amount of business credit you need. In some cases, you might have discovered it’s been a challenge to get business lines of credit of any manner.

So if your competitors are using this type of financing today, who exactly is eligible for it, and is your firm a candidate? The answer is simply that if your firm has a combination of 250 thousand in working capital assets you are immediately eligible for asset based lines of credit.

We would add that firms with smaller asset sizes can still monetize those receivables via invoice financing or discounting, but thats not our key focus for todays information exchange. For straight A/R solutions we recommend confidential receivable financing, which provides you with the ability to bill and collect and finance your own receivables on your own.

Why should you consider these kinds of offerings? Simply because your firm might be in one of a number of special situations, such as your need for increased daily operating cash, you wish to merge with or finance an acquisition, you have been unable to obtain inventory financing elsewhere, you are growing to quickly for traditional Canadian chartered banking financing, etc.

The benefits to this type of business financing must by now be pretty obvious. Its all about access to working capital financing and cash flow that you couldnt access before. Assets that couldnt be financed are now financeable, and inventory financing, previously limited or unavailable now looms on your growth horizon.

There are in fact other short term asset based finance solutions that might provide you with the bulge financing you need. They include: sale leasebacks, SRamp;ED tax credit loans, purchase order financing, factoring, working capital term loans and merchant cash advances/short term cash flow loans.

If you want to investigate asset based lines of credit for your firm (remember, your competitor probably already has) then speak to a trusted, credible, and experienced Canadian business financing advisor who will assist you with identifying benefits and the best solution for your current strained needs in business finance.

Business Financing In Canada . Know Your Options for Funding And Finance , Loans and Monetization

Sources of business financing. What we really mean is do you as a business owner of manager really understand the type of funding your company might need, and moreover what alternative to loans and finance exist.

Capital has always been a challenge for Canadian business, more so in the SME sector. While larger corporations have Chartered banks, advisors, and access to capital pools both public and private the ‘ little guy ‘ in the small and medium enterprise sector struggles to search for capital.