Find a Reliable Bail Bond Company

The bail bonds industry is a lot like any other industry currently available to the public in the sense that not all businesses or companies operate in an honest manner. How do you know if the services you are offered are feasibly legitimate or if you may be getting swindled by someone offering to help you?

Although the bail bond industry is heavily regulated there are a select few companies out there that do not conduct business in an ethical fashion. When selecting a bail bonds company it is also beneficial to look into the background of the company as well as meeting face to face with their bonds agent before agreeing to any arrangements. A number of commercial bail companies have come under scrutiny in the past years for malpractice. Most of these cases involved misconduct with the fugitive recovery agents or bounty hunters attempting to detain a bail jumper. In some cases criminal charges have been filed and pursued against bounty hunters for illegal detainment procedures.

The first thing to remember when selecting a bail bonds company is that if it sounds "too good to be true" it probably is. If bondsman is offering you "no money down" or "zero down" loan you should strongly consider going somewhere else. The fee amount required for the bond is set by the state's Department of Insurance in which the agency is operating in and should be consistent across all commercial bail companies within the state. Once this payment is received the agent will have to pay their financing company a large portion of the state designated fee (10% in California). This is one way a customer can spot an "unethical" bonds agent. How can this business stand to profit if they are providing a loan with no money down when their surety company needs to be paid?

Typically a agency will require the co-signer to put up a "mortgage" or security interest in physical property to secure the loan amount in the event that the bailee skips the court date assigned to them. When selecting a "no money down" bail agent the practice is common that these agencies will use the collateral mortgage over the co-signers' head in order to secure the ten percent bond premiums. These types of agencies tend to use collection methods and etiquette that is not practiced by the majority of bail bonds agencies. Although this is not always the case, typically a company offering a "zero down" bond have a motivation behind this sales pitch which tends to benefit the agency over the customer.

Although the bail bond industry is one which is driven by urgency in the customer's needs, a customer seeking a reliable bailer should take some time to ensure the choice they have selected is serving the best interests of the client. All commercial bail companies are required to charge the same amounts based off the state laws so it is truly the quality of service that distinguishes a legitimate bond company.

Multifamily Financing Tips

Apartment buildings are hot today. As a matter of fact those who own them benefit from this real estate bear market. If you wonder how's that, just think of the millions of homeowners whose properties have been foreclosed or were forced to short sale their homes. These folks are now renting, they can't qualify to buy another house, at least not for a few years. In the meantime, banks are in no hurry to dispose of the recently foreclosed homes as the government has helped them eliminate their losses (through bailouts). While these homes are sitting vacant for months, if not years, the apartments are getting full and more demand is thus created.

Before rushing in to look for apartment buildings be sure to learn what it takes to qualify for a mortgage nowadays. Skin in the game is a must, there are no 100% loan programs available today no matter what the internet says. Financial strength is also required, the lender must feel comfortable that you'll have sufficient reserves/net worth to cover for the mortgage payments should high vacancy occur or major repairs must be made. And last but not least, it's the background in owning and managing apartment buildings. Owning and managing residential properties is not sufficient experience, yes both are real estate but completely different breeds. For more details on how to position yourself first in line for financing read my past article titled "Reality vs Fantasy in Commercial Financing".

As far as apartment building loan programs there are a few that most seasoned owners/investors are currently taking advantage of. For example, there is a Multifamily Small Loan Program that streamlines the entire loan process for multifamily acquisition and refinancing for loans between $1 million to $3 million ($5 million in major MSAs). Why is this loan so cool? First of all because once you have it you won't need to refinance after a few years. You see, most bank loans have terms of three, five, seven or ten years (with balloon payments and longer amortizations), after which owners simply are forced to refinance. Not with this loan! You get a low rate and save money - and equity - by not having to refinance in the future.

Does it appear too good to be true? No, not really, because as mentioned earlier a substantial down payment (if purchase) or equity (if refinancing) is required. Expect an average of 70 to 80% LTV (Loan to Value) with no exceptions above this limit. Expect to provide evidence of previous multifamily ownership and a solid PFS (Personal Financial Statement). If you're half way there here is an idea. Find a trustworthy partner with whom to join forces, and remember the word "trustworthy".

When it comes to rates while they are low they won't be as low as residential rates. However, the lower the LTV the better the rate. For example a loan with a forty percent equity and a higher debt service ratio will benefit in form of lower rates due to its lower risk. (For a rate quote please contact me). The other difference is that residential loans today tend to come with no prepayment penalties while many commercial loans do. So what should a borrower expect? Up to five years with a penalty determined when the loan is underwritten. Yet, this should not be considered a big detriment unless you plan on selling the property during the next few years. This loan program is best used for those planning on holding on to the property in longer term (more than five years) otherwise, there are better programs for short-term investors.

Properties best suited for this program are those in good to great condition and with high occupancy rates of 90% or above. I see plenty of requests out there for distressed multifamily properties and yes, there are great opportunities in buying and stabilizing such properties. And hard money or private money may be the temporary solution. After the property is fully stabilized it may then qualify for the Multifamily Small Loan Program.

Please try to forget the guidelines from the past decade. Forget the no down payment or little down payment programs. Forget the stated income, no income and no documentation programs. They are fantasy, unrealistic, time-wasting thoughts. They are gone and not coming back for a long time. Seasoned investors know this and that's why they work rather efficiently when they are in need of financing. Their goal is a successful closing and they know what it takes to get there...a viable project and a viable borrower with more than enough proof to provide to the lender.

One last piece of advice. If you're looking to finance apartment buildings in Croatia or Australia or some other far-off land you won't get funded by American lenders. No matter how appealing your project is it won't happen. Why? The problem is one of taxation. If a foreign bank were to make a big loan here in the states, the US government would levy a foreign lender tax of 30% of its interest income. Conversely, an American lender doing a loan in another country would subject itself to a similar tax imposed by the foreign country (check with your tax adviser for more details). There is one exception, however, and that is if an Australian bank starts a subsidiary bank here in the US and the subsidiary makes loans in the US. Generally speaking, if you are seeking a loan in Croatia, save time and energy, and go local.

The Lending industry is quite chaotic and unpredictable, especially in today's economic environment. Banks will like your deal today and hate it tomorrow. Most commercial loans are originated today as Portfolio Loans. This means the lender keeps the loan in their portfolio for the entire term. So, if they find today they have too many retail centers in their portfolio, they will decide - over night and without a warning - to shift to apartment buildings.

 

Fast Small Business Loans Offer Liquidity for Struggling Companies

Whether you're in high-end fashion or IT support, having money on hand when you need it is an essential part of owning and succeeding with a small business. Rather than having to wait a month or even two to get the money from outstanding accounts receivable transactions, selling those invoices for fast small business loans could make or break your next business venture.

Once considered highly risky, factoring loans have become more secure and therefore more popular over the past few decades. Some businesses even use this type of loan to pay for start-up costs. When a bank won't loan you the money you need to expand your business, factoring companies offer the best and most effective solution.

The trick to getting a good rate for your factoring loan is to find a company that specializes in a certain area. This specialization could be the size of businesses they work with or the field within which they work.

For instance, some factoring companies only buy invoices from businesses that make less than $10,000 per month. This allows a factoring company to focus their efforts on just one type of business, giving you a better lending agreement. Because factoring does take a larger percentage of your profits than, say, a bank loan does, it's important to find a factoring company that can offer you a competitive price offer.

Few small businesses have an accounts receivable department capable of collecting the needed monies quickly. Whereas it would take your own department weeks and possibly months to complete outstanding transactions, you can get the money up front by selling your invoices to a factoring company.

In cases where your accounts receivable are not outstanding but you need money now rather than by the due date of the original transaction, a factoring company can give you cash in hand. Some factoring companies claim that they can even get you the money you need within two days of contacting them! For small business, this immediate cash liquidity can be the difference between success and failure.

Another way that a factoring firm can offer a small business financial stability is by handling international accounts receivable. Like a regular collections department, few small businesses have the liquidity to train and hire staff capable of working with overseas transactions. Because a factoring company works exclusively in their particular niche field, the employees and staff there already have the experience necessary to make settling international accounts simple.

For a variety of solid business reasons, using a factoring company for fast small business loans is a highly beneficial practice. Whether your business is in an unexpected financial hole or you have the opportunity but not the funds to expand, selling your invoices for cash up front can make your business dreams possible.

 

Financing Apartment Buildings

First it was the boom, then it came the bust, and now it's the bear market. Despite the massive liquidity injected by the Fed, overall the U.S. real estate has yet to experience more bearish seasons. But there is one branch of the real estate sector that appears to be exempt from the deflationary pressures of our economy. Apartment buildings are gaining popularity due to exceptional levels of high occupancy. Therefore many investors have made the decision to park their money in this kind of investment.

If you're new to multifamily investing you will most likely want to know as much as possible about the world of financing. While each transaction is unique and underwritten on a its own merits it's worth knowing that there are a few basic requirements commercial lenders use. If you're a seasoned investor you could still benefit from keeping up to date on such criteria especially if you're looking at acquiring a new property or refinancing one that you already own.

The Collateral

The underlying asset is among the first on the lender's list to review. This is the security the lender uses for taking the risk of lending you money. Therefore, the building you own or looking to buy represents the source of repayment for the commercial loan.

Believe it or not with very few exceptions lenders do not like distressed properties and REOs. These kind come with a myriad of problems such as high vacancies, management and tenants issues, title, lack of maintenance and or upgrades, local economy, and in many cases inability to service debt. As a result, hard money may be one of the very limited financing options.

For conventional transactions great emphasis is placed on the property and its condition. In case of foreclosure, the lender wants to be sure it has a marketable property. This is the reason for which the lender will typically not allow the borrower to choose the appraiser. The commercial appraisal is detailed and it utilizes three variables to derive the property value: income approach, replacement cost, and sales comparison method. The income approach carries the utmost important factor in determining the collateral approval. A building could be fancy, well-maintained, and in a great location, but if the income is not there to support the value the collateral does not pass the test.

The Cap Rate

Among other factors worth mentioning are the age and condition of the property, the vacancy rate, and the area market capitalization rate. The "Cap Rate" is a ratio used to determine a property's value based on its generated income. It's computed by taking the rental net operating income (NOI) and dividing it by the property's fair market value (FMV) or sales price. The lender will then compare the property's Cap Rate with the general area's rate for similar properties. The red flag arises when the ratio is lower than the norm, therefore a higher cap rate is certainly desirable. Conversely, a very high ratio raises another red flag. Rest assured that an underwriter would question why a property has such a high ratio. Are there any underlying issues that could potentially affect the property in the future? Remember that an underwriter has a detective's eye, he/she is looking for what could go wrong before looking at the positives.

If you're looking at buying an apartment building something tells me you'd want to first look at the Cap Rate. Often a high ratio means a better deal for you. If the area's Cap Rate is approximately 8% and the property you're looking to buy has a 5% ratio you must justify why you're buying it. What is it that compels you to pay the higher price? Remember also that the appraisal will put a heavy emphasis on the lower ratio.

Now, let's do some quick calculations as an example. We'll assume that you're trying to determine between two previewed properties. The first property has a NOI of $35,000 and an asking price of $600,000. The second property has a NOI of $15,000 and an asking price of $150,000. Which one would the Cap Rate suggest is a better investment? Obviously, the second property since the Cap Rate is 10% ($15,000 / $150,000) versus 5.8% ($35,000 / $600,000).

On the other hand, if you're the proud owner of an apartment complex and you want to figure out its estimated value, you can do this by first learning what the area Cap Rate is for your location. Let's say the area Cap Rate is 8% and your property's NOI is $42,000. You can then easily determine your value at $525,000 ($42,000 /.008).

The Cash Flow

Cash flow plays a significant role when underwriting a multifamily loan. Within the industry the cash-flow analysis is known as the Debt Coverage Ratio ( DCR). Such ratio measures the property's net income ability to cover the annual debt service. The lender will analyze the property's rent-roll - and the financials - and determine the annual income and expenses. After that it determines if the annual cash flow can service the new debt.

The DCR is calculated by dividing the property's annual NOI by the property's projected annual debt service (based on the new loan). Annual debt service includes the principal and interest payment only. Taxes, insurance, and the rest of the expenses have already been deducted when determining the NOI. Lenders are looking to see a minimum of 1.25 ratio, meaning that for every $1 of debt service the property must generate a minimum of $1.25 in net operating income. So, let's say a building's NOI is $35,000 while the annual P&I is $27,000 (or $2,250 monthly). The resulting DCR is 1.29, a ratio within the guidelines. However, a mere increase of a half percent on the rate could bring down the ratio below 1.25 thus putting the loan in jeopardy of being denied.

Borrower Strength

Most loans funding today are recourse loans. It means that lenders are not satisfied with the collateral only and you, as the borrower must provide a personal guarantee; which implies that your credit and financial strength will be scrutinized. Keep in mind that even if title to the property is vested in the name of a corporation, LLC, or some other form, lenders still require personal guarantees from their owners or members.

Underwriting trend is rather conservative so lenders expect you to prove a great credit history, sufficient apartment building experience, and a decent net worth with a generous amount of liquid funds. When it comes to the capital invested or equity owned most programs want to see the borrower's equity at twenty percent or more. Your net worth should look impressive. Fannie Mae, for instance, wants to see the borrower's net worth be at least the loan amount requested.

Finally, the apartment building is the primary source of collateral and loan repayment, therefore it carries more weight when compared with the borrower during the loan underwriting process. Still, the strength or weakness of the borrower will ultimately impact the approval or denial of the loan.

A loan package meeting these basic requirements creates the foundation for a successful loan approval. However, keep in mind it doesn't necessarily mean that a transaction that meets the criteria is automatically approved for a loan. Still, not meeting any one of the above requirements will most likely end in denial of your commercial loan request.

The Lending industry is quite chaotic and unpredictable, especially in today's economic environment. Banks will like your deal today and hate it tomorrow. Most commercial loans are originated today as Portfolio Loans. This means the lender keeps the loan in their portfolio for the entire term. So, if they find today they have too many retail centers in their portfolio, they will decide - over night and without a warning - to shift to apartment buildings.

 

Alternative Financing Strategies In A Slow Market

The economy just struggles on. And, it is expected to continue at least until the next Presidential election is over and we set politics aside and get back to the real work.

In the mean time, current financial market conditions will remain unchanged - meaning that small businesses, even those that are growing, will continue to have a hard time accessing capital.

- Credit score requirements will trend higher precluding those without the most stellar score from the credit markets while continued economic setbacks of small business owners will push their scores in the opposite direction.

- Positive cash flow requirements will play an even greater role in credit underwriting even while most small businesses are facing declining revenues.

- And, collateral requirements will continue to trend higher; with values of 100%, 150% and even 200% or more.

All bad news for business owners needing a business loan to stay float or to grow and innovate their companies through this turmoil.

However, not all is lost to these entrepreneurs.

Here are a couple of suggestions of raising money during this unending slow market:

Leveraging Financial Assets:

Most lenders just want to get repaid. Thus, they want to be assured that a future cash event (either ongoing cash flow or a single, future payment event) will materialize that will repay their loan with interest.

Financial assets do just that. Example, if you invoice your customers, allowing then 10, 30 or more days to pay for products already shipped or services already renders, then that delayed payment period creates a future cash event that can be factored today for cash - cash to make payroll, pay suppliers or even to win that next job.

Or, your business has already won that next job yet does not have the capital to purchase needed materials or labor to complete it. But, that order all ready in hand means that your customer will pay you as soon as the goods ship or the service begins. Again, a future cash event that can be factored for cash today - cash to actually complete that job and earn your profit margin.

Trade Credit & Vendor Loans:

If your company is seeking a business loan to just purchase materials or supplies, then turn to your partners (suppliers and vendors) for trade credit.

It is also in their interest to keep your business alive and well (you are their customer after all). Know that if your company's revenue is slow, so is theirs. And, for them to stay in business and grow their organizations, they need all the customers they can keep (that means you).

If you already have trade credit with your supplier, ask for better terms - terms that allow your business time to convert those goods into revenue of your own.

Or, if you don't have terms with your suppliers, now is a great time to ask. Know that during this long-term economic slow period (since 2008) many suppliers have been offering credit terms to their customers as it not only benefits their clients but offers many benefits to them as well - like added revenue, increased sales and a customer base that is not in decline.

The goal is to try and match the credit terms with your suppliers with the terms you offer your own customers. Thus, your business will not owe your suppliers until you have money coming in from your customers to pay those expenses.

Or, if your business is purchasing new equipment or software from vendors, ask those vendors to finance that purchase.

More and more companies are offering these types of services called vendor loans. They know it helps both parties.

Some vendors will provide your company a business loan for the amount you need to purchase their products or services with the only caveat being that you use those funds to buy their offerings.

You get what you need for your business and have to make payments just like you would with any other business loan and they keep you as a loyal customer who continues to buy their products.

Friends and family & Local Investors:

While the news may be trying to demonstrate that most people in this country are struggling day-to-day to make ends meet, it just isn't totally true.

There are many people who still have some savings or disposable income and are looking for ways to earn better returns then banks and other investment options are offering.

This means that your friends and family (or even the friends of your friends and family members) may have the ability to float your company a short-term business loan or even invest in your business for a little up-side potential.

And, this source of capital might not be from just those people you know. There are other professionals right in your local community that may have some additional capital that they want to 1) earn a better return on or 2) want to give back to the community that has helped and supported them all these years.

This means asking. Asking friends and family - they are the ones that know you and your business best. In some cases, they may have even been waiting for you to ask them.

Or, get out in your community and network. Attend local events; join civic organizations or networking groups. Talk to everyone. Sell the merits of your business, sell the merits of your opportunity and sell the merits of your products. Get the word out. Then, ask for an investment or loan. After all, money is still money, no matter where it comes from.

Your business just might be the exact opportunity that a local investor is looking for.

While this slow economy is predicted to continue for some time, it does not mean that your business has to suffer for it.

Put that entrepreneurial hat on and get creative in finding alternative ways to secure a business loan for your business in this sluggish market.

Know that, when it is all said and done, there will be winners and loser. It is up to you to ensure that your business is in the winning column.

 

Securing Property Development and Refurbishment Finance in the UK

In the difficult financial climate which currently prevails in the UK many established Property Developers and Builders have experienced significant problems in obtaining the necessary support to continue doing business. Whilst there has been some relaxation of late, the major High Street Banks in the UK still have very limited appetites to support speculative multi - unit development projects ( i.e. those without significant pre-sales in place ).

Generally they are only keen to lend to the more established clients and further they will restrict the loan advance to a low loan to project cost ratio which will preclude many developers from taking on a project as they are unable to raise their own cash input.

The good news however is that away from the high street there is a significant and growing number of new lenders in the UK who will take a far more entrepreneurial approach to property development funding including Refurbishment projects and who will support a broad range of both Residential, Commercial and Mixed Use projects across England, Wales and Scotland.

Lending decisions in this sector of the market are made primarily against the quality and the perceived demand for the end product to be developed. Other key criteria include the experience and financial stability of the borrower and the credentials of any proposed main contractor to be used on the project. The real benefits for the borrower in getting access to such funds is the speed of decision making - decisions in principle generally within 24 hours and the amount of the overall advance - generally 50% of the site cost provided and up to 100% of development funding. Once the loan terms are agreed the speed to complete the process is again far quicker than normal with advances available in 2 to 4 weeks dependent on how quickly the legal aspects can be completed.

The general limit of funding provided on an Interest Only facility will be circa 65% to 70% of the Gross Developed Value (GDV). This limit would include any allowable fees to be added to the loan along with the interest cover which will 'roll up' and be added to the loan during the course of the development. If a client can demonstrate that the loan interest could be serviced then this will make a positive impact on the level of the loan achieved and in certain circumstances the loan can be increased if additional freehold property is made available as additional lender security. For most projects the normal loan term will be between 9 - 24 months including an agreed Marketing phase upon completion of the build.

As one might expect the fees and rates will not be at High Street levels but, depending on the key criteria applied, loans are currently offered from 7% above Bank base Rate with fees circa 2% to 4% of the loan amount. Loans are generally available from a minimum level of £50 K up to £25 Million for the larger developments.

The quick acid test to establish if your project is supportable for property development finance

• Is there a demonstrable demand for the end product in the proposed location?

• Have you got previous property experience or do you propose to use an established Main Contractor?

• Do you own the site or do you have 50% of the site purchase price available?

• Does the overall loan requirement sit within 65% to 70% of the Gross Developed Value when the project is fully complete?

• If Sales become delayed on completion would there be an opportunity to let the property and re-finance on to a longer term mortgage?

Business loans for small businesses

Possibility of small business loans can a financing solution purchased through sources that are different from the traditional method of granting of credit - "The Bank". Small business owners opt for this type of loan as they only resources of collateral and limited about their business because a higher risk. These factors complicate the process of granting of credit really.

Business loans for small businesses is that 1 option to finance personal loan is identical. Because from company trend in a short amount of time didn't have lenders want not their means higher risk. If the small business owners of the banks for loans start is denied, you expect generally other sources like close friends, new businesses, households and organizations who are willing to take risks.

It is possible to find also an investor that is willing to invest their money on your new business. There are several private investors today, which overlooked the risk of startups the opportunity are interested in the new company has to be successful.

These business loans for small business resources provide organizations that were rejected by banks-usually a small business loan. Traditional lenders such as banks refuse to most companies with unstable economic history or for startup capital, call.

Factoring is a widely-used alternative resources of small business financing. If a company opts for factoring as a source of funding, it will sell its receivables at a discount in another company. At the same time, the company should purchase order fill out funding to support orders. Today, there are programs available that will support manufacturing companies to produce their product. Donors purchase order will not cash in the hands of new owner's business, but the supplier will pay directly and then, when the final product was sold to the customer, the factoring company collecting the payment by the customer directly to the funds to the supplier for the production of the product meet. It would be also advisable to credit cards accept get a merchant account.

Angel also includes optional resources for the funding of startup investors. A business angel is an individual or a group of people, providing funding for startups in return a share of profits of the company. Most investors organize as a group or a network, to combine capital. This is really a great way for them, the loss to reduce, you could be, if they invest in a small business alone.

FAQs About Co-Op Business Banking

Co-Op Business Banking branches could provide you with the opportunity to open an account. Generally speaking, you cannot immediately take a loan with Co-Op Business Banking branches as you will need to save with them for a while before you can apply for a loan. You will likely need to wait for a few months. You can easily make your loan right after that. The amount you would want to save would depend on you. You should see to it that you could save whatever you can, even if it is a small amount. And before the year ends, you will actually receive a dividend from the Co-Op operations. You would receive the proportionate to the amount of savings you have accumulated. Among all the many financial institutions we have today, Co-Op Business Banking are the only organizations that offer the lowest possible interest rate in the loans of the members that they have.

Increasing the odds of getting approved for your loan.

While saving any amount with Co-Op Business Banking branches will give you the ability to borrow with them, the more money and the more time you have invested with them, the more likely they are going to give your application a favorable review.

Is Everything Insured?

YES. With Co-Op Business Banking branches not only are your deposits insured, but the loans are as well.

If you do get a loan from a branch, there would be insurance for you as a member. If you die, the insurance pays for the loan. With most Co-Op Business Banking locations, you are entitled to receive life insurance that can be used when you die since your specific beneficiary would receive an amount twice on what you have invested.

As such, you, as a depositor or investor are assured that your money is safe and secured as all loans that are done with your money are fully insured. Because Co-Op Business Banking locations are operating for the sake of their members, they offer special low interest rates that are far different from the banks. All members can apply, but in addition to the rule of membership, credit qualifications and securitization still do apply to all applicants.

Co-Op Business Banking units are great financial institutions that can aid in financial matters. They are not the same with the banks as we may know them. They started having a small number of members that had grown vastly. They do not operate just to gain profit. It functions to meet the demands of their members. The members have their own say on the operations and management aspects. You should know that Co-Op Business Banking structures started their operations more than a hundred years ago.

 

Commercial Mortgage Refinance Loan Options in 2011 and Beyond

Its painfully well known that the last 3 years have been difficult in the commercial lending business. Borrower's commercial loan options have been limited and most have been difficult to close. We discuss the various commercial mortgage refinance options, that are available now and that will likely be available in 2012 below. You may not like what you read, but this is the reality of the market.

Refinance Options on Commercial Investment Properties

If you own a commercial investment property (I'm referring to NON multifamily properties, such as office, retail, industrial, etc) you already know how hard it's been to find banks and lenders that are interested in considering your loan request. Probably 80% of the banks out there have no interest in funding investment property loans, no matter how financially strong of a borrower you are (The main reason is how commercial real estate sits on banks balance sheets, but that's a different topic).

The good news is that 2011 has seen an increase in the number of banks and lenders that are willing to lend to commercial investors and for those that qualify the rates are outstanding. Here's the typical terms: Max 65% loan to value and this is with conservative capitalization rates of 8% or more (Despite market conditions). Max 20 year amortization schedules. You may find a bank that would be willing to spread this out to 25 years but this is rare.

Fixed periods are normally capped at 5 years, however 7 and 10 years are available, but the bump in interest rates is expensive. Minimum debt coverage ratio's is now 1.4 and this is with conservative underwriting line items such as minimum vacancy of 7-10%, management at 4% and reserves at 2%. Bottomline is that the property has to cash flow well. Unfortunately borrowers and their investment properties that don't fit the above, will struggle to find loan options.

Owner User Commercial Properties

If your business occupies more than 50% of your building, than your loan options open up considerable and the level of competition between banks is picking up. The easiest way to make sense of the various loan programs is to divide them between conventional loans and government backed loans such as the SBA.

Conventional lending which was very limited up to 12 - 9 months ago is finally picking up. If you fit this box, expect great rates and closings in as little as 30 days. Terms are as follows: 65% (Maybe 70%) max loan to value. 15, 20 or 25 year amortization schedules. Fixed rates from 1, 3, 5, and 10 years. Rates are currently in the 4%'s to low 5%'s on 5 year fixed programs. Minimum debt coverage ratios of 1.25 with stable gross sales.

If your loan to value is higher than 65% and or if you have a special use property such as a funeral home or restaurant, etc you'll want to look harder at the SBA programs. And despite the bureaucracy of the SBA loan process, it has literally been the life saver of 1,000's of small businesses across the country.

Expect 90% loan to value, again 90% loan to value financing with either the SBA 504 or SBA 7a programs... No other loan programs offer this high of leverage. Borrowers that purchased their property a few years ago and have experienced a decline in value will find that this is their best potential solution. Rates on the 504 loan are very low and you can expect 3, 5, 10 and even 25 year fixed rates. For borrowers that need to consolidate other debt or secure working capital the SBA 7a loan is another solid option. Both of these loans will remain a popular and viable option throughout 2012.

2012 will likely see a moderate increase in the number of banks and loan programs that become available for commercial mortgage refinances. Loan to values will likely not increase as the capital ratios for banks are not going to loosen per the Fed's rules. The European debt crisis will also have a major impact on banks in the 2012.

 

Commercial Mortgages Explained

One typical way for people to acquire business property is to procure a loan, also known as a mortgage. When they are going to be using the property for business functions, the loan will be a commercial mortgage. These types of loans can be used to buy a structure where specialists will operate the business. The other choice is to acquire a house or apartment building that will be leased to other people.

Options for Professionals

Some people may be able to obtain a mortgage with no money down. These people are generally professionals who will use the property to perform services for their clients. Instead of a down payment, these professionals can offer the lender an asset that will be collateral for these 100 percent loans. In these cases, the lenders are offering a secured loan that is less risky for them because they will be able to sell the asset offered as collateral if the borrower cannot make the payments on the loan.

Because there is no down payment required for these 100 percent mortgages, the interest rate will be higher, but these types of loans can be advantageous to those who have not started their businesses yet. These professionals may need to have cash to begin setting up their practices, and they will have the opportunity to do that with no money down.

Mortgages for Other Purposes

The other type of commercial mortgage requires that the property be placed as collateral for the loan. The terms of these loans will be different from the typical mortgage that can have a term as long as 30 years. With loans used to purchase commercial property, the term can be much shorter, a couple of days, or it can also be 30 years. The business owners will make monthly payments just like for their residential properties, but they will, most likely, have a balloon payment after a determined number of years.

For example, if the term for the loan is 10 years, the business owners will make monthly payments for this amount of time. At the end of the term, the full balance will be owed to the lender, called the balloon payment.

Qualifying for the Loan

Qualifying for these loans also is similar to obtaining a loan for a home because the business will need to have a credit check. Although a lower credit score will not necessarily disqualify a business from borrowing money, a higher credit score is preferable for lenders.

What is very important to lenders is how well the business is currently performing. If the business has been very profitable up until the present time, it will be easier for these business owners to receive the money they need to purchase their properties. The lenders may also require that business owners offer them a business plan that will demonstrate how their businesses are going to benefit from the purchase of the property. If the plan can show that business profits will increase, lenders can be secure that they will receive the money back that they lend to these business owners, an important factor in deciding whether or not to lend business owners money.

 

Keys to Effective Merchant Monitoring

To be as effective as possible, merchant acquirers must continually monitor the risk posed by the merchants they have underwritten. The basic process of merchant underwriting involves two parties: the merchant and the merchant acquirer. In this process, payments go from the consumer to the acquirer who then pays the merchant. To be as effective as possible, merchant acquirers must continually monitor the merchants with whom they have chosen to do business. They must monitor risk because in the time between the customer paying for their goods and actually receiving their goods, the acquirer holds the risk of returning the money to the consumer if a chargeback occurs. Three main areas acquirers must pay attention to are: risk, account activity, and channels of communication.

Risk must be monitored and calculated while the acquirer decides to underwrite a merchant. The acquirer must know how likely the merchant is to stay in business, as well as how likely the merchant is to repay funds if they suddenly cannot deliver goods they have sold. The acquirer, while not directly loaning money, is implicitly taking on the risk associated with chargebacks if the merchant does not deliver goods to the consumer and does not repay the money to the acquirer.

Merchants must be monitored after they are underwritten so the acquirer can detect abnormalities in the business that may affect their ability or willingness of the merchant to repay customers for chargebacks. This is important because acquirers undertake a certain amount of risk from the merchants that they underwrite. Without proper monitoring of merchant accounts, the acquirer will be unable to tell when unusual fluctuations in business occur and, in the worst case scenario, will only find out after the merchant has been unable to deliver goods, but kept the customers' money.

Effective means of communication must also be maintained so the acquirer can contact the business if any unusual occurrences arise. For example, if a small t-shirt company suddenly has a 40% increase in sales, the merchant acquirer may contact them to find out why there was such an influx and whether or not the business will be able to cope with the new additional volume. Additionally, if the acquirer has ongoing contact with the merchant, a relationship of knowledge and trust will be established. This means that if an unusual circumstance does arise, the merchant will already be comfortable contacting the acquirer.

When underwriting merchants, acquirers must look at the risk posed in every step of the relationship. This risk mainly stems from the possibility of chargebacks and the ability of the merchant to deliver goods as promised. When monitored effectively, merchant acquirers not only provide a valuable service to merchants, and merchants have the benefit of having a strategic vendor looking out for their best interest.

 

Open Market Operations

The Deposits of State Bank of India closed for subscription on November 6, 2011. The scheme expected to mobilise around $4-5 billion has undoubtedly been a resounding success. The total collections are reported to be over $5.5 billion, thereby exceeding the figure of $4.23 billion collected under Resurgent Bond scheme. The MID was the third sovereign bond floated over the last decade.

The first in the series was Development Bond floated in 1991 to mop up dollar funds in a bid to tide over the serious balance of payments crisis. Similarly, the purpose of RIB was to mitigate the pressures of financing the mounting trade deficit against the backdrop of post economic sanctions scenario. This time, again, the scheme was aimed at increasing the forex reserves against the backdrop of weak rupee and the burgeoning oil import bill.

In the government securities market, the higher collections under IMD scheme has given a big boost to the market. With expectation of good inflow coming into the market, players built up positions at the longer end. RBI also conducted the price based auction of 11.99 percent GOI 2009 on November 6, the closure date for IMD. 224 bids worth Rs 9037 crore were received against the notified amount of Rs 3000 crore.

Similarly, the cut-off yield at the auction was below the market expectation. This resulted in appreciation of prices at the longer end with yields falling. 11.40 percent GOI 2008, 11.99 percent GOI 2009, 11.30 percent GOI 2010 and 11.03 percent GOI 2012 were the most traded securities. In view of good subscription at the auction and the underlying sentiments in the market, RBI placed three securities viz. 11.75 percent GOI2006, 11.90 percent GOI 2007and 11.43 percent GOI 2015 in its OMO sale window at a price higher than the prevailing market price of the securities.

Continuing with its sterilization move, RBI for the first time placed 11.19 percent GOI 2005 in its OMO sale for an amount of Rs 3500 crore at a price to be decided through auction basis. Having created demand for longer tenor, RBI also conducted another auction of 11.03 percent GOI 2012 for a notified amount of Rs 4000 crore on November 13. The paper has been amongst one of the most traded paper at the longer term.

The paper was again fully subscribed at a cut-off yield of 11.50 percent, a fall of 20 basis points from the cut-off of 11.70 percent on October 25. Even after the auction,the yields on the paper fell. At the shorter end too, the cut-off yield at 364 day treasury bill auctions declined successively to 10.15 percent. In fact, the entire yield curve has shifted downwards in the past fortnight. The fortnight has thus been marked by massive sterilization operations by RBI through Open Market Operations sale of securities and also two auctions.

This resulted in an outflow of around Rs 18000 crore from the system. Inflows in the system were around Rs 2000 crore only resulting in temporary mismatch in demand and supply of funds. RBI, however, continued to inject funds through reverse repo at 10 percent so as to cap the call money rates. Government has so far completed 75 percent of its budgeted borrowing.

With IMD inflows expected to enter the system within 10-15 days, the undertone of the market continues to be bullish. Besides adding on to liquidity, it will also lend stability to the exchange rate. Credit to commercial sector is not picking up. With forex reserves of around $40 billion, RBI would be in a better position to meet the burgeoning oil import bill. Inflation has started tapering off and with reduced level of monetisation, it is no longer a cause of concern.

Oil prices have also started coming down and once winter is over, it is likely to break down further. With slowing down of the US economy, prognosis for US rates is also benign. Under these circumstances the possibility of any further pressure on interest rates is not likely. To look it is more helpful information about finance.

Commercial Loans - A Boon for Farmers

There are times when farmers find themselves in a sudden bind when it comes to collecting required finances for their farms. Getting loans for farms on a short notice to handle unexpected emergencies is quite a necessity these days, especially considering the amount of machines and other farm supplies available in the market and the economy we are dealing with. There could be many reasons why you may require a quick farm loan - it could be that you want to buy a new machinery to improve the quality of farming tasks and save time or to settle an unforeseen expenditure.

Whatever the reason may be, getting farm loans depends entirely on your credit history. Having a positive history, without any debt will make sure that you get the loan soon and with a reasonable rate of interest to boot. However, a progressively worse credit history might make your chances of getting a loan more difficult and you will be charged with more interest. Taking a secure loan will be an assurance of a lower rate of interest but it may be an extremely difficult task.

If you are unable to get loan due to whatever possible reasons or do not want to worry about ever increasing interest rates, getting commercial loans is another way to go about things. You can get a good amount and use it for whatever farming purpose you have in mind. These loan programs are dedicated to meet individual needs of farmers and ranchers so that they can fulfill their demands and increase overall productivity. Commercial loan providers offer customized payment dates along with stable long term payment dates so that the farmers can focus on their operation instead of constantly increasing rates.

A loan will help you buy required machinery, and tools that will eventually increase your productivity and bring higher monetary benefits and improve cash flow. Commercial loans, if taken from a reputed provider will offer stability and less risk because such loans have no payment penalties and ensure suppleness in your operation's future. You will never be financially penalized for refinancing your farm or selling it.

However, in order to save yourself from spam sites, it is important for you to search for a reputed farm loans provider. Browse the web to find out the list of providers and check what past and present customers have to say about the services. Consider the provider only if you are completely satisfied with the review.

 

Understanding Receivable Financing Pricing And Rates Is Not Impossible! Invoice Discounting 101

' Misunderstanding all you see '; those are lyrics from the Beatles ' Strawberry Fields ', and talk about being a bit appropriate for the confusion around receivable financing and invoice discounting rates in Canada.

So, talk about confusing... let's try and clear up some real basics around receivable finance in Canada -mostly along the lines of how it works and how it is priced. Clients are always providing their version of what they think they are getting but the reality is often far from that.

A/R finance is used by thousands of firms in Canada to address cash flow shortages when in fact more traditional financing simply doesn't make sense or can't be attained.

A good way to clear up some of the confusion around this method of business finance in Canada is to address it head on, which is simply to say that this finance mechanism isn't financing per se, it's simply the sale of one of your assets at a discounted rate. So from that perspective even we own up to being guilty sometimes around the terminology!

Another way of looking at our issue to frankly address what might be perceived or real drawbacks or negatives around A/R financing. The discount rate used on receivables when you sell them, in Canada, ranges anywhere from 1-5%. To be fair, the average discount rate tends to be in the 2% range.

Invoice discounting rates make the most sense when they are used to take advantages of opportunities for growth and higher profits and sales via asset turnover.

Part of the reason A/R finance is viewed as confusing by many is that it's essentially part of an unregulated industry. Clearly our banks are regulated and you know what you get (when you can get it!)

So what does that all mean to Canadian business owners and financial managers. Simply 4 words. Pick a solid partner! Or adviser.

Where invoice discount financing gets confusing is in the terms/contracts, and the rates.

So how do you address that pricing in terms of benefits? Several factors have to be taken into consideration. They are the quality and age of your receivable portfolio, the ' opportunity cost' of what you can do with additional cash flow, and the actual cost of carrying your receivables and inventory as opposed to monetizing them more quickly via a receivable financing strategy.

As we have said in the past carrying receivables anywhere from 60-90 days can easily cost you anywhere from 10-20% when you factor in days to pay your firm, admin costs, lost opportunities, your current financing costs, etc.

So why do Canadian business owners and their finance staff stumble on the issue of receivable finance. It's partly, as we have shown due to their inability to overlook the total pictures in the areas we have demonstrated above.

Invoice discounting rates makes the most sense when you look at opportunity cost. If you finance your receivables as you generate them you lower the balance sheet investment and reduce your day's sales outstanding.

A quick example - if your annual sales are 1.2 million and your daily sales are $3300 per day for example you could add $10,000 to cash flow by a 3 day reduction in DSO. A 30 day reduction adds 100k to cash flow!

Charges or costs for a 100k per month facility equate to a 2k per month cost if you are turning your A/R promptly.

So, confusing. We hope not, although we're the first to admit it takes a bit of time. Speak to a trusted credible and experienced Canadian business financing adviser for clarity on achieving best invoice discounting rates and benefits for your firm.

 

Who Are The Commercial Mortgage Lenders?

Commercial mortgage brokers have many sources of capital to choose from when placing a commercial mortgage request with a lender. Who are these lenders, and which is best for your particular needs?

Commercial Banks - Although commercial banks are still major commercial real estate lenders, the recent economic and market conditions have caused commercial banks to be much more conservative in their guidelines. Commercial banks have severely limited their geographic lending areas, cut back on loan to value ratios, and toughened up their credit criteria. In addition, commercial banks have cut back on their loan terms, preferring to keep their loan terms short - usually three to five years.

Local and Community Banks - Many local and community banks have stopped lending altogether due to the economic downturn. Those that are still lending are looking for "relationships" with their borrowers. They want to see deposits and other banking activity moved to their banks. Most do not want one-time transactions or one-time loans.

Agency Lenders - Fannie Mae and Freddie Mac are actively engaged in apartment building and multi-family lending for qualifying properties and strong borrowers. Borrowers seeking agency loans should have excellent credit, personal net worth, liquidity, and experience. The property should be in good condition with a solid rental history. Properties with high turnover, vacancy or deferred maintenance will not qualify.

Conduit Lenders - Wall Street lenders have traditionally been active with Commercial Mortgage Backed Securities (CMBS) loans. These loans, usually $3,000,000 and more, are more difficult to obtain in today's market due to the volatility in the credit markets. Rates and underwriting requirements have been swinging wildly in this sector of the market.

Insurance Companies - Insurance companies have always provided low rate and long term loans on commercial real estate. These loans are underwritten conservatively (low loan to value ratios) and are offered on strong properties and to strong borrowers. Insurance company rates do not fluctuate with each and every move in the market as these loans are tied to the company's internal cost of funds.

Credit Unions - Many credit unions are beginning to aggressively lend on commercial real estate. These lenders typically like deals close to home and like to establish relationships (they like deposits). They most often compete with the local and community banks in the area. These lenders weren't very active in the past and don't usually have any bad loans on their books at this time.

Private Lenders - Due to the uncertainties in the market, private lenders have stepped in to create access to capital for those borrowers unable to obtain conventional financing. These loans are usually short term and at rates considerably higher than conventional rates. These loans require less underwriting time and usually close within 30 days. Private lenders are more concerned with property value and potential cash flow than with borrower credit issues.

There is a lot of uncertainty and volatility in today's lending market. The days of walking into your local bank and obtaining the loan you need (and that is best for you) are long gone. A good commercial mortgage broker who understands your needs and has access to all of the lenders described above is a necessity. He will be able to guide you through this process and help you obtain a commercial mortgage that meets your needs.

Funding an LLC - Three Things to Consider When Looking to Fund an LLC

I am not a lawyer, I am a Judgment Broker. This article is my opinion, and not legal advice, based on my experience in California, and laws vary in each state. If you ever need any legal advice or a strategy to use, please contact a lawyer.

LLCs have become very popular because they are more flexible than old school C or S corporations, and LLCs offer more tax advantages for the owners.

Corporate entities offer their owners and shareholders very good liability protection.

LLCs may offer their owners better liability protection than C or S corporations do. That extra liability protection is the reason one should be careful when lending or investing money with a LLC.

When a LLC succeeds and makes money, life is good, and they will most likely pay you what they agreed to.

When the economy is bad, or the LLC is not making money, or if owners and/or management is not honest, then you might have to sue the LLC to try to recover what the LLC owes you.

Suing a corporation is usually tough because the owners and shareholder are rarely liable for the actions of the corporation.

Suing a LLC is usually tougher, because in many states, a charging order (in California, CCP 708.310) is the only way to attempt to reach a (judgment debtor) LLC's assets.

Because of the potential extra risks in funding a LLC, there are three things you should consider, before lending or investing money in one:

1) Get personal guarantees from the owners of the LLC, especially when the LLC entity is small or new.

With signed and notarized personal guarantees in place, the owners will have an incentive to be extra careful to manage your money correctly. If things go badly, it is much easier to recover a judgment against an individual, than a LLC.

2) Get UCC liens on every asset the LLC owns, including computers, accounts receivable, etc. UCC liens are available through a Secretary Of State.

To be most effective, UCC liens should identify specific assets. UCC liens may not get you paid, however they increase your odds.

3) Verify the LLC's status at a Secretary Of State's web site, and make sure the status is ACTIVE, which means they paid their taxes and are registered with the State.

Check that the LLC has a business license in the city they are based in, a current fictitious name (DBA) filing active in the county they are based in, and you know what bank account they use.

Of course, when the LLC has been running for years, and has plenty of income, and you know the owners, you can feel more comfortable lending or investing.

Remember, corporate entities can vanish overnight, and LLCs are usually hard to recover from, if you have to sue them.

 

A Business Loan Is Still Possible For Bad Credit

Let's face it, the truth is that if you have bad credit, the chance of you getting approved for a business loan is severely limited. The good news however is that it's still not impossible. It can still be done if you know how it works so a little bit of homework is necessary to increase your chances of getting approved for boat loans.

Firstly, make sure first that you do have bad credit. There are many people that think they have bad credit just because it's not as high as before. So before you cry your heart out thinking that you have bad credit, check your credit report first. You may have lower credit score than before but poor credit is still not bad credit. Read and ask around and try to find out what banks and lenders actually think is bad credit for them. Request for a copy of your credit report and do a thorough check on it. Be sure that you sweep through the entries one by one and make sure that they are accurate. You might even want to cross-reference these entries with receipts and bank statements that you have for your credit card. There are some instances where erroneous entries may happen and in such cases you need to be certain to report them and have them corrected immediately. Especially when you have poor or bad credit, you can't really afford any wrong entries in your credit report.

Another way to increase your chances of getting approved for a loan for business is if you have something for collateral. You need to have something to leverage the debt. There must be some assets that you have that may be of value for lenders and banks. This can come in the form of cash, car title, land and home title, and the like. It is just basically telling the lender that if you were to default on your loan, they are assured of something that can allow them to minimize their losses.

Lastly, a comprehensive businesses plan that shows how viable and profitable your business is can nail the deal for you. A business loan of course means that you're going to use the loaned money for business and lenders must see that their investment is a profitable one. This is why you need to make them see what your business is all about and that they'll profit from it. They need to know what your strategy is and what you intend to do with competitors. They need to be able to gauge just how profitable your business is, and thus how profitable their investment will be in your business loan.

To make a business loan easier for you, there are actually lenders that specialize in loans for people with bad credit. Bad credit lenders are easier and faster to deal with as they don't have the same rigorous requirements like banks and other conventional lenders. This can help you fund your business faster and get started right away.

 

Getting a Small Business Loan, Quick and Easy

There are times when every business owner finds themselves in a sudden bind when it comes to finances and needs a quick solution. Getting business loans on short notice to handle sudden emergencies is quite the necessity these days, especially considering the kind of competition and economy one is working with. There are several reasons why you may need a quick business loan - it could be to deal with an unforeseen expenditure, or to improve the quality of your products or even to give your employees an incentive.

Getting a business loan quickly will depend entirely on the credit history of the business owner. Having good history will ensure that you get the loan soon and with a reasonable rate of interest to boot. However, the progressively worse your credit history is, the more difficult it will be to secure a loan and the more interest you will be charged. Taking a secure loan is an assurance of a lower rate of interest, but securing one can be a really difficult task.

Taking out an unsecured business loan is the best way to go about things. You can get as high as $250,000 and you can use this amount to whatever purpose you have in mind. Such loans have been created expressly for people who have a bad credit history but require the money to turn things around. The paperwork involved is minimal. In most cases, repayment is based on future sales credit. Based on the volume of business you have, your repayment schedule will be based on the kind of business you bring in.

When you are working to get yourself a quick business loan, it is important that you do your research on the companies that provide the loans. Compare and contrast the rates of interest they offer. In most cases you will be able to a get a free quote and this will put you in a better position to make a choice. Speak with representatives on your needs if possible. Another way to go about it is through peer to peer lending, where you put up your needs and have representatives of lending institutions bid to give you your loan. This way the rate of interest you get will be a reasonable one and you have the satisfaction of having got the best there is in the lending industry.

However, once you get this loan, you have to make it a point to ensure that you bring your business to a level where future monetary requirements can be carried out via secured loans.

 

Low Interest Personal Loans For Your Easy Access

It is very much difficult to find out a bank or, a money lending company who will provide you low-interest-personal-loans in this poor socioeconomic condition of the business world. But, don't give up, every problem has a solution. If you are quite unable to bear the load of huge interest then, there are some sources from which you may get loans at some lower interest. Following article will focus on that issue:

The main source for these particular personal loans is the internet. The cause is very clear. If you don't have enough money or, wealth as well as 'credits' in official language, then, certainly, the banks or, lending companies will not issue the loans for you. But, some internet money lenders don't count these issues. After spending for advertisements and other additional costs, they have enough potential to serve you with these loans and, this helps them to draw quick profit and, popularity in the same time.

There are two types of loans for reduced rate and it's very important to have some knowledge on them. The first type may be mentioned as, secured personal loan which indicates that, you have to submit a valuable possessions of yours to the lender. You are allowed to submit any thing, from jewelry to, your car. When the total money with interest is paid then, you will regain the submitted craft according to the deal.

At past, it has been seen that, under secured loan scheme, these types of personal loans were issued, specially, if the person who is lending money has something really valuable to submit to the lender. You can call it low-interest-personal-loans-bad-credit.

At an unsecured personal loan, you need not to submit any valuable possession to the money lenders. But, you need to have a good 'credit record'. You should have enough credits, to pay the monthly installments easily. You have to convince the money lenders and introduce yourself as a trustworthy person. In this situation, it is seen that, lenders lend money at lower interest. Their main concern is, to make a quick profit from a good client. You may call it low-interest-personal-loans-good-credit.

Unsecured loans are not available in this particular section, usually. But, suppose you are a new comer in the business competition. Here, business means money lending business. To enter the mainstream, you have to raise your popularity among the general mass. For this reason, it has been seen that, new companies to raise their popularity provides unsecured personal loans at reduced rates.

Now, I want to give you some suggestions on how to choose a suitable low-interest personal loan scheme. "Cut your coat according to your figure"-may be the perfect suggestion in this case. Lend exactly that amount what you need. Rate of interest depends on the amount you have lent. Concentrate on that thing for which you have taken the loan. Before making any deal you must check the rate of interest, the monthly payments and the other details once again.

Everyone has a definite goal in his life. But, money becomes the main obstacle to reach that place. Low-interest-personal-loan may be the best way to remove that obstacle.

 

Factoring Loan Options for Small Businesses

It's an unavoidable part of owning any small business to sometimes be short on cash. The situation is made even harder by the fact that small businesses in particular need an influx of spendable cash in order to grow and expand. Choosing to sell your invoices for a factoring loan requires lots of thought and research beforehand but can ultimately be exactly what you need to boost your business to the next level.

These financial concerns, risks and opportunities are a huge part of why owning a business of any size is a stressful career choice. However, as any small business owner knows, the rewards of this kind of work make it worth the stress. An ambitious entrepreneur understands and even enjoys the tight money situations inherent in their career.

When your business is short on cash and has the opportunity to advance but not the liquidity, a factoring loan could be your ticket to the next stage of expansion and success that you have planned. This fast and safe way to get money you have earned into your hands has helped many a small business owner overcome the ups and downs inherent in this career choice.

One of the many reasons a factoring loan is ideal for a small business that needs money as soon as possible is that factoring companies don't care about your credit history or score. Many business owners are unable to find a bank to lend them the money they need to maintain or grow their up and coming business because of past financial issues.

For instance, you will be hard pressed to find a banking institution that will lend any amount of money to someone who has even a single bankruptcy in their financial history. This is because banks look to you personally to determine the safety and security of their loan.

If you have a bad credit history or a low credit score, no bank will be willing to risk their money on you, regardless of where your business it at now. This financial situation makes it hard for small businesses to expand or even stay afloat.

In contrast, a factoring loan can be obtained regardless of your credit history and score. Whether you have no credit record at all or have past financial issues staining your record, factoring firms simply don't look at your personal history. What they do look at to determine whether your company is a secure bet for a factoring loan is the paying power of your customer base.

The downside of selling your accounts receivable invoices for a factoring loan is that the company buying your accounts will take a percentage of the money garnered. Even though the money that comes in is from your invoices that were billed for your services or products, the loan services factoring companies offer means they get a cut of the profit. While their percentage is usually more than a bank or other lender would charge, they offer a more accessible option that, for many small business owners, is the only option available.

 

Borrowing Is an Option for Homeowners Associations

Arriving just in time for your aging common interest community is a fairly new option for condominium, cooperative, and timeshare boards - an option sure to smooth those riotous owners' meetings. It is another arrow in your quiver to solve those nagging maintenance problems that just seem to come out of the woodwork (or are caused by it).

Whoops, we need a special assessment on top of the monthly assessment increase you just approved three months ago! So who could know that a sinkhole would form in the parking lot?

The option that more and more condominiums are discovering is the bank loan. This option is arriving on the condominium scene all across the country as more and more properties are facing the problems of aging. Many condominiums were built in the mid- to late- 1970s, making them 20+ years old. It is well past time for things to go bad. Or, framing the problem in terms of technology improvements and desires for aesthetic changes, there is a need for upgrades.

Another group of complexes that have a lot of work to do are those built in the mid-'80s. Unfortunately, it is not unusual for this group to suffer from poor workmanship or low-quality materials. These weaknesses are now resulting in premature problems.

Typically, condominium associations have been left to their own resources to support the cost of the repairs that are needed. The results have not been particularly favorable. The cost impact of these projects makes residents shudder. Often, the projects compound on top of themselves with the result being maintenance imprudently deferred.

One way out of this dilemma is planning properly for failing components and financing the current project(s) with a loan to smooth the impact on unit owners. By utilizing a loan, the cost of the project is spread over several years instead of a few months and most owners will appreciate this approach.

There is a third group of associations that can benefit from financing. These are complexes that are subject to land leases. These associations can purchase the lease and pay off the obligation long before the lease would ever mature in order to potentially save a large sum of money! Perhaps there is a need to purchase adjacent land as a buffer from undesirable development or to acquire a parcel that has been accessible only by easement. Of course, facility additions like building a clubhouse, pool, tennis court, etc., also make sense to finance.

Now, how do you find a bank that can provide the financing? Financing for condominium associations is relatively new. Changes in state statutes across the country have made this industry a viable and safe place for bank financing. However, most banks have little experience with this industry. The first chore is to find a financial partner that is comfortable and skilled with financing a condominium association. A specialty lender is the logical choice to provide your financing as lending to HOAs, condominiums, cooperatives, timeshares and other common interest communities is their only business.

Get Those Loans Quick and Hassle-Free

If you are one of those who has a bad credit line and who is in business, you will know how difficult it is to get business loans approved. You will also know how vital it is to getting these loans at the right time, if you want the business to work out well for you. You have to understand that it is your financial transactions that have led to a bad credit history and in some cases you will need to take a loan in order to set you on the right path.

There are few options though for businesses that need loans in a hurry and have a bad credit history. In most cases you will find that a traditional bank will turn you down. There are however alternate banking sources that specialize in this form of lending. They provide you with unsecured lines of credit. There are also not-for-profit organizations who specialize in funding for companies that need it badly.

You could also opt for a merchant cash advance. This basically means that the lending company will evaluate the potential of earnings based on your credit card transactions. Based on this you will be given a loan. Every month, in proportion to the sales that you make, the lending company will begin to retrieve its merchant cash advance. It works out easier as it takes the pressure off you as far as monthly installments are concerned. There is also what is known as peer-to-peer funding.

Here you register yourself with such a site and put up your needs in terms of loan amount and how much of an interest you are willing to pay. Lenders will then bid to win your loan amount. They will pay you this amount. The only thing they will look into is your capacity to repay the loan. There are also lending clubs who make it a point to try and help businesses that are genuinely distressed and that can be bailed out easily.

You could also try getting some loans from friends and family. However, you have to be very clear on the terms of repayment and not go back on your word. It can cause a serious amount of rift in the family f you do so as this is based completely on trust. If you find that your business is eligible for some loans from grants and other forms of funding, then it is something that you should take up.

Microloan For Business - What Is It, Who Qualifies, and How To Get One

The economy is tough right now, but don't let it stop you from fighting for your dreams. If you're looking for a helping hand in starting your small business, a microloan for business may be the answer you've been looking for. This article explores what a microloan is, who qualifies for microloans and how to get one. Let's get started!

Microloan For Business - What Is It and Who Qualifies?

A microloan is a small loan, usually given to those who are at or below the poverty level and are looking to start a business. Quite often, the people who qualify for and receive a microloan are unable to put up collateral or qualify for a traditional small business loan because they lack a steady employment record and don't have a verifiable credit history.

Microloans started to gain in popularity when organizations popped up to help aspiring entrepreneurs in impoverished countries. These programs work quite well, particularly with female entrepreneurs, and has grown exponentially, spurring what is also known as peer-to-peer lending. Peer-to-peer lending is exactly what it sounds like - organizations collect money from donations and interested contributors, sometimes family and friends, and extends small loans to qualified applicants.

Microloans are available through your local small business association. However, before you apply there are a few things to know.

* Small business loans vary in size. The maximum loan amount is $35,000 and according to the Small Business Association, the average loan is about $13,000.

* You can use a microloan for working capital. You can also use it to buy supplies, furniture and equipment. You cannot use it to pay for debt already incurred, or to buy real estate.

* Interest rates for microloans run between 8 and 13 percent depending on the intermediary and lender costs and other loan terms.

* Loan terms depend largely on the size of the loan and the planned use for it. The maximum term for the loan, the amount of time you have to pay it back, is six years.

* Generally, some sort of collateral is required for microloans. However, this isn't always necessary and depends largely on the loan application.

How To Apply

If you're interested in applying for a microloan, the steps are fairly straightforward. Visit the small business administration online and look up microloans. From that page you'll want to find your local small business microloan intermediary. They're listed by state. Contact your intermediary and begin the application process. Each process will vary slightly but will operate like a standard loan application process.

When it comes to starting a business, if you believe in yourself and in your business idea, nothing should stop you, not even a lack of funds. Find out if you qualify for a microloan today and get started living your dreams.

Never Give a Lender a Security Interest in Something You Can't Live Without

Lenders often demand far more security than they need when a business borrower seeks a loan. While this may be a prudent and cautious lending strategy for banks, it can prove disastrous for a business borrower or guarantor who pledges personal collateral for the loan.

For example, a lender may ask for a deed of trust or mortgage on the business borrower's personal home in addition to a security interest in the business inventory, receivables or other intangibles of the borrower's business. It may also demand a guarantee by a corporate officer and insist on a deed of trust of the guarantor's house to secure the guarantee. In such situations, both the borrower and guarantor are at risk of losing their homes if the loan defaults.

Guarantors must understand that a guarantee is a legally binding agreement that in effect could make the guarantor just as liable as the borrower for repayment of the loan. While most guarantors believe that the lender will come after them only after failing to get satisfaction from the borrower and the borrower's collateral, that is not so.

Years ago, guarantors had the right to make the lender proceed first against the borrower, but most standard guarantees today include a waiver of that right. This means that the lender may legally go after the guarantor and any collateral posted by the guarantor first before the lender sues the borrower or forecloses on the borrower's collateral.

It doesn't matter whether the lender tells the borrower or guarantor: "Don't worry--we would never foreclose on your home--we just need the security for bookkeeping," or uses some other pretense to induce the borrower or guarantor to put up their home as collateral for a business loan. Be assured that the lender will deny these oral reassurances and insist the lender's written unconditional rights are spelled out in the loan documents. Those documents will often trump any oral statements.

Gone are the days when a business owner could expect to only use business assets as collateral. Borrowers and guarantors should think long and hard before ever agreeing to pledge personal collateral for a business loan or building project. The down side of losing your home or other personal assets to the lender is often too great.

In good market conditions and bad, your relationship with your lender should be treated with caution. When money becomes scarce as it is today, your should be even more vigilant.

 

5 Things You Need To Know About Commercial Finance

Introduction

Most people, especially "first time buyers", tend to think only in terms of approaching their own banks when it comes to arranging finance. There are, however, other sources. There are Commercial mortgage Lenders, Asset Finance Lenders, Lenders that specialise in factoring/invoice discounting, lenders that can provide finance based on existing pensions, refinancing of existing commercial finance and much, much more. Also consider a personal loan or mortgage.

What Security Do You Have For The Loan

For large commercial loans, commercial finance lenders usually require land and buildings as security for the loan. In the current economic climate it is very difficult to get finance for more than 70% of the value of the loan - although in a very limited number of cases - not impossible! If you are looking for more than 70% - be prepared to look for other alternatives. For smaller loans, vehicles, plant, equipment etc. may be acceptable. Some lenders even allow you to refinance equipment that you already own (say a car) thereby enabling you to release capital into your business.

Which Commercial Finance Sector Does Your Application Fall Into

Not every lender is interested in lending across the complete range of business sectors. They are competitive only in the sectors in which they are keen to lend. For example, land and property - mortgages, vehicles, plant and machinery - asset finance. You should therefore decide which business sector your requirement falls in.

What Is Your Credit History

The better your credit history the lower the interest rate that you will have to pay. If your credit history is not perfect (and in this current credit crunch very little is being seen as perfect credit history) you will need to be applying to a specialist commercial finance lender.

Government Grants

The UK government provide various grants for businesses. Some of the most common are Under the Small Firms Loan Guarantee Schemes [EFG] (which are easy to set up),. 75% of risk is taken by Government and provides another way of introducing vital growth capital to small businesses. Not available if there is existing potential security such as high equity in property where a secured loan could be set up.

R&D Tax Credits can be available to companies who carry out any research and development, including engineering, software, computer hardware or any product development, can be eligible for claiming R & D tax credits. This can mean the equivalent of an injection of capital for as much as £70,000.

DTI Marketing [and other] Government grants can be available to companies in most sectors for the development of business by using DTI Marketing (and other) Grants.

Approach A Lender Direct Or Use A Broker.

When obtaining a commercial loan, the Lender usually charges a fee for providing the loan. If you decide you use a Broker then the Broker will also usually charge a fee for arranging the loan. Whilst the natural reaction is to approach Lenders direct, a Broker will deal with lots of lenders covering many different sectors and so can be more efficient in the long run. A good Broker will be able to provide help in sourcing of finance for all of the above loan and more.

 

Small Business Factoring: Is It Worth the Initial Profit Loss?

Factoring companies offer small businesses a way to get their outstanding accounts receivable transactions squared away without having to have the staff and infrastructure for their own collections department. While small business factoring companies do take a percentage of money acquired, in most cases it is well worth the small loss in order to get the outstanding dues paid.

Large companies and firms that send out thousands of invoices for small amounts of money will likely find factoring economical. This is because factoring companies base their bids on the credit report of the indebted customer rather than your small business. Factoring companies charge for every invoice or account they have to investigate for credit rating information.

For instance, if you have two hundred customers with outstanding accounts receivable of $50 or less, the cost for a factoring company to investigate each and every account will cost more money than you will be saving by outsourcing this kind of work. Small businesses with large outstanding accounts receivable transactions, on the other hand, will find a business factoring loan well worth the small profit loss.

To decide if getting a factoring loan is the right choice for your business, grab a piece of paper and note down the expenses and profits of each option.

To start, figure out how much interest on a regular loan would eventually add up to. Take into account how likely you will be to pay the maximum each and every month. It's safest to extend your estimates as far as how quickly you'll be able to pay the loan back.

Next, do a little research online to find a factoring company that meets your specifications. The specifics of their factoring services should be listed prominently on their website, but don't be shy about giving them a call or sending an email if you have questions. Once you have all this information, you'll be able to make a realistic estimate about how much of your accounts' outstanding balance you would lose by choosing a factoring company.

Now, compare the cost of you doing your own collections work against the cost of working with a factoring company. In most cases, small business factoring saves money and extra stress in the long run. However, every business, business model and financial situation is unique and should be given individual attention.

By analyzing and balancing the data gathered, you will be able to see what choice is best for you and your small business. If you need money in hand right away, a small business factoring loan is a reliable and effective way to get just that. You may lose some money up front, but if you invest your sudden influx of cash correctly, it'll make you a bundle down the road.

4 Tips to Getting Your LED or Solar Project Financed

AppId is over the quota
AppId is over the quota

LED and Solar technologies and interest in those markets is booming. The cost savings are tangible and the stability of much of the hardware has reached a level where its longevity can be relied on. Makeshift, flimsy equipment has, for the most part, disappeared and been replaced with extended warranties and well-engineered products. Companies and manufacturers can save thousands of dollars by implementing the new energy-saving systems but it takes capital to make those projects happen.

How much capital? Upgrades can range from a hundred thousand dollars to several million and, as we have experienced with our volatile economy, using cash reserves to fund them can be scary. It is well-known that business lending has been constricted but not in all the available channels; many wholesale lenders and private investor groups are funding energy projects throughout the U.S.

So what do you need to do or have to get your new LED or solar program funded?

1) Your financial paperwork in order; three years taxes, financial statements and interim statements all in electronic format. Before applying for funding have everything organized and if something is missing, wait until you have it because it will sit in underwriting until it is complete. Make sure all liens or outstanding judgments are resolved.

2) An Energy Audit Report. Your vendor should provide you with a detailed analysis regarding the cost savings of implementing their product. Typically, the costs savings will add to your bottom line and be used to substantiate taking on new debt. If it takes ten years to break even then that may push you out beyond the term lenders are able to offer.

3) Vendor Profile. Have some background information on your vendor; how long they have been established, what other projects they've done so you can validate their stability to the lender. Start-up vendors in this market will not likely be approved so choose who you work with carefully; their background and experience will be important to the underwriters.

4) Evaluate your Net Worth. Sit down with your CFO or accountant and assess your company's net worth. If it is not two to three times more than the cost of your project then you may need additional assets to be used as collateral to support the debt. At this point, you may consider trimming down the project size or doing it in several phases.

Financing Green Tech projects requires a little more attention to detail and a stronger credit than standard equipment. You don't have to be strong in all the areas we reviewed but a weakness in one means you will have to have additional strengths in other key areas. The equipment itself will not serve as collateral and knowing that going in will help bring your expectations within reason. Commercial lenders, for the most part, are staying away from financing Green Tech but private investors are out there funding them every day but you have to be prepared to know what it takes to get approved.

Lester M. Salvatierra has 15 years experience as a licensed Finance Specialist with First U.S. Finance. He helps small to mid-size companies lease or finance a wide variety of equipment and special projects nationwide. Sign up now at: http://www.firstusfinance.com/blog.html and follow his blog to get the latest valuable updates on the business financing market.

When Visa and MasterCard Can Help

There are numerous business owners who are not too sure of how a merchant cash advance works. It is the best possible way to receive funding for a business that needs it rather urgently. It is also given out irrespective of the kind of credit history you have. If you are in need of some financing and also accept Visas and MasterCards, then here are a few things that a lender is going to look into.

In order for your business to qualify for a loan, they will have to be a minimum of a year old. There are in fact a few lenders who require that you be at least two years old. A start-up will not really find this option useful. If you are a business that accepts Visa and MasterCard, then there are merchants who will consider this as a qualification. This is simply because these are the two internationally popular means of payment. There are other merchant lending outfits that give you a cash advance even if you do accept other kinds of credit cards.

A merchant cash advance can easily be opted for this way, but one necessity is that your business not have filed for bankruptcy. If you have, and it has been less than a year since you filed for it, then you will not be able to make use of this option, else, getting a quick approval should not be much of a problem.

When it comes to a Merchant cash advance, you will need to have a specified minimum amount of credit card sales. How much of a loan you get depends on the kind of sales that you generate on a monthly basis.

If you are among the business owners looking for this kind of an advance, then here are some things that you have to keep in mind. You have to avoid any sort of illegal transaction. These could end up in dispute. This is why you should take all possible measures to ensure that the person transacting with you is not doing something illegal. You will also need to look into the background of the lender and ensure their credibility. Whether it is a business loan or any other sort for the business, this is an important factor.

When you have finally found a lender who suits your requirements, you will then have to reach an agreement which is signed by all involved. Make sure that you read through the document carefully and ensure that they are a reliable lending company.

Business Failures: They Don't Have to Happen

About half of all new businesses started in the U.S. will be out of business within five years. Or in other words, the long-term success rate for U.S. businesses is only about 50 percent.

But how often do business failures go unnoticed? The fact is, most business failures are noticed, but they're ignored. It's kind of like the hidden camera TV shows where bystanders witness something uncomfortable, like an old guy who ran out of gas and is trying to push his car, but nobody actually gives him a hand.

Look For the Signs

When a business is suffering, the signs are usually there. Even though sales may be steady and the business owner optimistic, it's a little like a train wreck for outside observers who know what to look for: You know it's going to happen, but you can't stand to look.

These businesses often have operating lines of credit and operating accounts, but frequent overdrafts, or they have a line of credit that has turned into an evergreen loan. If you're wondering why they don't pay their bills on time, it's simple: They have no cash flow.

Surprisingly, these businesses sometimes struggle for years with no real direction from the person who could be their savior: their banker. Nobody tells them anything, and the banker who "wined and dined" them to get their business when times were good is now looking for a way to exit the credit, leaving the business owner confused and wondering what happened to the "red carpet" treatment.

As authorities in the business community, bankers, accountants and business attorneys should be the ones to spot the early stages of business trouble. Who else is as close to a business' financial condition? The best way to spot potential business failures is to look for early signs of financial trouble, such as late or inaccurate financial statements, evergreen lines of credit, increasing A/P, and slow-paying A/R (e.g., an increasing amount of A/R that's over 90 days).

The Snowball Effect

The typical routine of watching and waiting for a business to fail is a detriment and disservice to the customer. Think about a snowball that keeps picking up speed and girth as it rolls downhill. As the business failure picks up speed, it eventually becomes too much for the business owner who doesn't possess the skills necessary to get the situation under control.

Remember that most business owners go into business with a trade skill, not an accounting degree. They may not know how to forecast, or even know what breakeven means, which leaves them not really understanding why they are losing money or having negative cash flow. The fact is, the average business owner doesn't have the knowledge or training to understand what is going wrong.

Unfortunately, the psychology of disengaging from a credit is often exactly what it shouldn't be: adversarial. How can this be managed in a win-win way? How can you tell a business owner you can no longer support him or her without sounding like you are leaving the business in a lurch?

The good news is that there is a way you can join hands with these businesses and be part of a successful solution that also helps you keep a valued customer relationship. Even if you have to exit the credit, you can still keep the business' deposits while referring them to experts who know how to help improve their financial situation and cash flow.

Bring in the Experts

Asset-based lending (ABL) and factoring emerged from the need for better cash flow for businesses that are either too new to get traditional bank credit, or that need to exit a bank because they are no longer in compliance with loan covenants. In either case, you can refer your customers to an asset-based lender or factor that can administer the line of credit while you continue to meet all of the business' other needs, such as deposits and cash management services.

Since asset-based lenders and factors are accustomed to dealing with these kinds of financial problems, they can often increase the availability of cash while the other issues are being addressed. They can also be a part of the solution when a credit has been over-extended and things are still not improving.

Creative debt restructuring is very common, and asset-based lenders and factors are very well versed in how to handle these situations. In short, they are a great referral in the right situation.

Another expert that can help troubled businesses is a type of management consultant known as a turnaround expert. Even though they are an added expense when cash flow is already tight, they can more than pay for their services if they are good at debt restructuring and negotiations.

It Takes a Team

It often takes a team to help businesses succeed during tough times. The business may need an injection of cash that can be achieved with asset-based lending or factoring, as well as a good business advisor to teach them about the financial side of their business.

Finding quality business professionals who understand this niche can be the tough part. The Internet is a vast and scary space when business owners don't know what they're looking for. The terms used to describe these consulting services are not taught in school, and most owners don't know how to find this kind of help. This is where you can provide invaluable advice and assistance-asset-based lending, factoring and quality management consulting are all referral-dependent.

No business has to fail due to financial mismanagement or a lack of expert financial assistance. But owners need advocates surrounding them who are proactive in identifying when they may need a helping hand-and then making the right introductions.