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Large industries often need several pieces of very expensive equipment in order to run their business effectively and efficiently. This equipment is often used in the manufacturing, restaurant, mechanical, construction, and transportation sectors. The upfront cost of business equipment can be very expensive and may break a small business that is still getting their bearings and working on making a profit. In many cases, the business needs this equipment in order to operate properly and make a profit, but the upfront cost of the equipment is usually very high. That?s why there are some great equipment financing and equipment loans available for businesses that need assistance with their purchases. Not only are equipment loans easier on the wallet, there are a great deal of other benefits to equipment financing. Some of those include tax write-offs, easier management of assets, and most importantly, a higher margin of cash flow to be spent on other expenses.

Getting equipment financing is much like getting financed for a car or home. The lender will offer you very flexible repayment options with a choice of repayment terms. In many cases you?ll be able to opt for loans with terms Read more…

The lending environment is a mess right now. Investors and principals who jump on plans that limit the financing risk gain in many ways.

First, principals who establish an investing plan with limited debt requirements and achieve a record of success develop a plan that will attract capital as the market evolves and changes around them. In essence, the plan creates a self fulfilling success prophecy.

Second, economists and just about anyone who is following the market expects rates to climb and remain high for an extended period at some point in the future. This development is going place financing pressure on deals carrying to high of leverage and faced with these costs. Plans and groups focused on low leverage will have the opportunity to buy many properties at sharply reduced prices. Additionally, because these plans rely on low leverage debt will still make sense for these purchases providing further momentum. For the properties groups like this already own will be secure as the projects are able to support the increased leverage costs without requiring more capital.

Third, the principals with these plans will have the opportunity and ability to develop very strong financing access from local, regional and national banks and lenders as the strength of their plan creates greater business opportunity for them.

The strong liquidity position of principals in these plans will find themselves being fed high quality deals. As owners, brokers, lenders, and other industry players and groups become more aware of the few groups with these plans the deal flow for them will increase dramatically. This will allow these type business operators to capture even more great deals at terms favoring their business model.

Where should groups who would like to focus on such a plan set their metrics? This is something of an academic debate. That said the debt leverage ratio should be somewhere between 65% and under 50%. At this point in time, my personal conviction is that 50% is right. This will allow a very substantial rate change while keeping cash flow very strong. 65% is low today, but might not be so low if rates were to increase 300 to 600 basis points. The increased rate pressure could put a 65% leverage in the risk area. Additionally, principals should consider limits on Debt Service Coverage Ratio (DSCR). DSCR limits of no less than 1.5 or even 1.7 may be prudent. This then allows any given project to carry significantly more debt cost while keeping the DSCR within manageable levels during such a spike.

Accounts receivable funding, also known as factoring, continued an upward trend in 2005 with volume exceeding $112 billion. This represented a 9.3% increase over the prior year, which is the strongest year to year growth rate since 2000. In fact, only 2001 was the only year in the past 20 that factoring volume did not rise. A/R funding continues to be an accepted part of financing, but according to the Commercial Finance Association?s Annual Asset Based Lending and Factoring 2005 Survey, two thirds of the volume came from the northeast and southeast parts of the country. The northeast is the major region for factoring volume with 42% of the total.

The survey indicated that only 5% of factoring volume came from the Midwest, which includes some highly populated states with a plethora of companies that typically use A/R funding. States in the Midwest included in the survey were Illinois, Michigan, Ohio and Missouri. Why are the totals so low for these states? One reason could be that Midwest firms typically become utilize more traditional means of financing, and are hesitant to look for alternatives when bank loans aren?t available. Another factor is that 59% of all ?05 volume was represented by the textile and apparel industries. Most of firms of this nature are located in the east.

Most factoring volume (72%) involved clients selling goods to retailers. Only 9% were service provider clients with the remainder (20%) being clients selling goods to anyone other than retailers. Clearly, even though factoring volume Read more…

With Fannie Mae relaxing their rules around financing real estate purchases, financing is becoming less of an obstacle for investors. As financing becomes easier, investors and buyers will become critical players in the real estate market as this market slowly makes a recovery. As the barriers are removed, opportunity, market timing and money combined will motivate more and more real estate sales.

A key factor in making property financing easier can be attributed to the number of properties a buyer is allowed to finance at one time. Originally, each borrower is only allowed to finance up to four properties. Now, the maximum is ten properties. This updated policy is applicable to joint ownership of single-family units, as well as duplexes and quadruple unit homes.

While financing barriers have been removed, qualifying guidelines have somewhat become more conservative. For the most part, Fannie Mae is seeking experienced and high-quality credit investors. For instance, an investor is required to:

- make a down payment of at least 25% in order to purchase a single-family unit,

- make a down payment of at least 30% in order to purchase a duplex or a quadruple property unity,

- have a credit score of at least 720 to qualify for financing,

- be clear and free of mortgage delinquencies (in the last year),

- show that he/she does not have a bankruptcy history or any foreclosures in the last seven years,

- provide documentation of rental income,

- provide verification of tax returns detailing each and every rental property going back two years,

- show that he/she has reserves for 6 months for principle, interest, taxes, insurance needed for every property, and

- show that a partial cash-out refinancing option is available (with up to 70% of the loan value)

This is a positive change for our fragile economy, despite the fact that strict rules have narrowed down the number of qualified investors, leaving potential investors out of the market. However, on the upside, the change can bring growth to stimulate investments, which will in turn leverage purchasing power.

When it comes to buying a car, many people are looking to not only get the best deal on the car but the lowest interest rate auto loan as well. Before deciding on an auto loan, be sure to do some extensive research on the different types of financing available so that you can get the most car for your money. Before even walking into a dealership to purchase a car, request a credit report. The lower your credit score, the lower your interest rate will be. Not to mention the credit bureara may have errors on your credit report and correcting these errors can help lower your credit score raising your chances of qualifying for more money.

Be sure to get the financing done through a financial institution or a local bank. Many car dealerships try to get the buyer to finance through the dealership since the salesman can raise the price of the car causing you to pay more interest and raising his commission check on the sale.

Many people end up paying a lot more for the car than it?s actually worth. I can?t tell you how many people actually get the financing done through the car dealership. Settling for anything less than the lowest auto loan interest rates is Read more…

Traditional real estate investing by definition involves the purchase, ownership, management, rental and/or sale of real estate for profit. Under this definition, real estate is an asset form with limited liquidity relative to other investments, and traditionally is highly dependent on cash flow, but when we look at creative ways of investing in real estate a lot more opportunities are open to us.

So what are some creative ways to obtain financing? There are many but here are some of the most popular to list a few:

Partnerships are fairly common because this is first thing a lot of real estate investors think about doing when they start out. They want to find somebody who can put up the money and split the deal with them fifty-fifty. This is an option but there are better ways to make a lot more.

Hard Money Lenders are individuals or companies that have cash ready for you to borrow. This is usually a much better alternative than traditional banks since it is a good source for getting funds quickly even if you have a low credit score. Many hard money lenders don’t like to lend more than 65% of the fair market value of a real estate property, so the better the deal, the more options you’ll have.

Private Lenders can be an even better alternative to hard money lenders because you can often arrange better terms since you are dealing with someone privately. Remember, a private lender can be anyone even friends or family. Everybody wins because you are offering them a much better rate of return than they will get in their savings or mutual funds and it’s secured by real estate.

“Subject to” Financing comes from the clause “subject to existing financing”. With this strategy you are leaving the existing financing in place and just taking over the payments on the sellers existing mortgage. Your name is not going on the loan. It will stay in the sellers name. There are other ways to do similar seller financing as well. This is an excellent strategy for those who have poor credit to begin investing quickly.

Wholesaling or Flipping are specific real estate investing strategies that are essentially creative solutions to eliminate the need for obtaining any funds at all. This is where you tie up a property at a discount (using an agreement) and then flip the property to another buyer or real estate investor for a quick profit. Because of this, it’s virtually risk free, there is no need for excessive cash, credit or financing, and you do no repairs or work yourself. This is why when it comes to making quick cash in real estate, this method of real estate investing is one the best routes to take not only for avoiding many of the financing headaches, it allows you to make cash more quickly for the real estate market today. I would encourage you to look at as many options as possible, then compare the terms of each. This way you will know what will work best for your individual circumstances.

You’re finally ready. You need a new car and are going to go for that sports car you’ve always wanted. You need a loan but have a high paying job and should be able to afford the payments, you think. You get a copy of your credit report and then it hits – your credit score is pretty low.

The only loans you can get approved for, to get your hands on your $30,000 prize, have interest rates so high your monthly payments would be astronomical. You can’t even get a new economy car at the rates lenders will approve you for. A used car is looking like your only alternative.

It happens all the time. Consumers can often forget just how important good credit is to obtaining an auto loan with affordable rates.

Unless they have cash-on-hand to make a purchase, many consumers set their sights too high when they plan to finance a new vehicle. Once a potential lender checks their credit, reality sets in.

If your credit is bad, a new vehicle may not be in your immediate future. With new vehicles typically ranging from $13,000 and up, the monthly payments on a 5 or 6 year loan may be significantly more expensive if you have a low credit score. A moderately priced used vehicle may be your only alternative for the time being.

Your interest rate will still be high, Read more…

It wasn’t too many years ago when the hot trend in the physician world was the purchase of medical practices by hospitals. The theory was that not only would the hospitals benefit by an influx of referrals, the physicians would not have the headache of managing their practice and therefore earn more and work less.

Unfortunately, this rosy scenario has not always worked out and, as a result, many doctors are terminating their contracts with the hospitals. This has forced the physicians to re-establish their practices. For most doctors, maintaining their customer base isn’t a problem, as most patients will follow them back into private practice. The main issue is practice management in general, and financing in particular.

Although the physician may have no trouble getting financing for capital expenditures, a more ongoing problem is how to pay expenses and overhead incurred during the 60 to 90 days it takes to get paid from third party payors. As doctors and other providers are getting financially squeezed because of pressures reduce costs, the need for funding becomes greater. Even the most efficiently run practices need short term working capital as their businesses grow, and as a result of this need, healthcare financing companies have sprung up to provide medical receivables funding.

Even though the largest asset of most providers is their accounts receivable, most banks won’t lend money on that asset. Loan officers often lack the specialized knowledge of the healthcare claim billing and collection process. Because there can be a significant difference between the expected amount to be paid versus the face amount of the billings, banks are leery of using it as collateral. In a medical factoring situation, the funding company purchases the outstanding receivables of the practice, thereby assuming an ownership position in the receivables. Because the ownership of the receivable has changed, the practice also passes along the credit risk to the funding source.

ADVANTAGES OF RECEIVABLES FUNDING

* There is no monthly debt service because the funding is not a loan.

* It is an off-balance sheet transaction since the client is selling an asset.

* The client can receive fresh cash weekly, thus providing a manageable flow of funds.

* Because the only asset that is encumbered is the receivables, the healthcare firm can pursue other types of financing concurrent to this program.

* Factor fees tend to be much less than paying a billing company.

* No personal guarantees are required. The factoring company is more interested in the Read more…

If you are in debt, then you know the feeling, the stress, the anxiety, and the calls from creditors and letters from banks. If you are in debt then the first thing you would like to do is run. However, you don?t have to run away from your debt, here are some tips for getting out of debt.

Many people don?t realize that they are going into debt, they realize once they are in debt. If you realize that you are in debt don?t panic, first it is necessary to understand your expenses and your income. Create a budget to know exactly how much can be spent each month and how much money you have to pay back creditors.

1. Contact your creditors. It is highly advisable to contact your creditors and tell them that you are having financial difficulties. They are more than likely to work with you instead of bark at you for their money. If you are willing to work with them they see it as that you?re more reliable to pay them back.

2. Create a budget that is realistic. Stick to your budget.

3. Pay Read more…

In the United States, less than 10% of all For Sale by Owners (FSBOs), are successful in selling their home by themselves. That*s because most people just give up because they don*t realize from the beginning the difficulty and complexity of the job ahead. But that*s not the only reason. Here are the seven most common mistakes FSBOs make when selling their home.

1. Failure to price a property at what market conditions will bear.

The number one reason that most FSBOs don*t sell their homes is that they price it too high. Many start counting the money they*re saving on commissions and how much their sale will net. If your house is priced higher than other comparable houses in your market, you will not get the offers you need to sell!

2. Underestimating the time, energy, know how, ability and effort needed to sell a house.

One of the keys to selling your home effectively and profitably is complete accessibility. Many homes sit on the market much longer than necessary because the owner isn*t available to show the property. Realize that a certain amount of time each day is necessary to sell your home.

3. Not being prepared to deal with an onslaught of buyers who perceive FSBOs as targets for *low balling*.

Another challenge of selling a home is screening unqualified prospects and dealing with low-ballers. It often goes unnoticed that much time, effort and expertise is required to spot these people quickly. Settling for a low-ball bid is usually worse than paying any type of professional fee or commission.

4. Lack of knowledge about financing options for the buyer.

Are you prepared to answer questions about financing? One of the keys to selling is having all the necessary information the prospective buyer needs and to offer the buyer options. Think about the last time you purchased something of value, did you make a decision before you had all your ducks in a row? By offering financing options, you give the homebuyer the ability to work on their terms. You*ll open up the possibility of selling your home quicker and more profitably. It*s critical that you locate and establish relationships with a network of financing experts that will help you accomplish your goal profitably.

5. Not fully understanding the legal ramifications and all the necessary steps required in selling a home.

Many home sales have been lost due to incomplete paperwork, lack of inspections or not meeting your state*s disclosure laws. Are you completely informed of all the Read more…