Private Lenders for Small Business
In the world of loans and lending, there are 2 principle types of lenders, private lenders and conventional, or public lenders. The public lenders, in common parlance, are the popular lenders such as banks and financial and lending institutions. Such lenders basically, accept deposits and investments from the public. These lenders usually have a very, very strict doctrine of approving loans which they have to follow as a strict compliance. Hence a good and fair credit report only gets the best deals, loans with lower interests. In many cases the applications are rejected due to some or the other reason such as current credit, income, security, etc. You might wonder as to why the procedure is so strict. Well, the answer is that these firms and organizations deal with public interest such as securities, investments, savings, etc. Hence, by law they are supposed to follow the abidance that has been set down by law, because they are using public finances. You will notice that loans provided by such lenders very rarely default and are also secured loans. Private lenders on the other hand are lender businessmen who led out their own money to small businesses. Private lenders for small business are more like investors who want to reap better benefits, rather than store their money in low-paying bank accounts. The loans that they generate are often known as commercial loans. Such transactions have in fact proved to rather healthy for the US economy.
Private Lenders for Small Business: Loan Options
There are various types of business loans, which are provided by private lenders for small business firms. Let’s take a look at the prominent ones.
The first one is the basic one, secured loan. A high capital loan, the secured loan is a type of business loan that has a very large denomination and principle (amount that is actually lent). Usually such a loan is provided by the lender for some known important investment, such as purchase of machinery. In such a situation the loan is secured by the machinery itself. In some cases where the business has a steep and upward revue projection and a brilliant credit rating, the loan also becomes an unsecured loan. The next type is the expenditure loan, which is usually given to business when they lack sufficient liquid finances to pay off salaries, bills etc. The third type of loan that would be given by private lenders for small businesses is the joint venture loan. This loan is a sort of an investor policy where the lender finances a project of the business and reaps equivalent benefit. The last type of loan that is provided by private lenders for small businesses is the debt consolidation loan. Such a loan is provided to pay off other debts and loans that are proving a hindrance to the business. In addition to such loans there are also loans such as small business loans for women or small business start up loans.
Private Lenders for Small Business: Features of the Loan
There are some common features of the business financing facilities that have been mentioned above. The first feature is that the approval procedure is not very stringent. The businessman’s personal credit report and credit rating of the business itself plays an important role in the process. These reports are however not used to establish the interest and APR. The interest rate is rather moderate and affordable. Thus, bad credit does not become a big hurdle for the business. The second merit is that the loans can be approved very quickly, which is a positive aspect of any small business financing loan. The third important aspect is that the loan is convenient to access because the private money lenders for small business loan pays a greater heed to the revenue projection of the total business rather than the proprietors personal credit track record.
While applying to the private lenders for small business, you will have to put together the credit reports and ratings of the business, personal reports of the key people involved, and documents related to the past activities and current projection of the revenue. I hope that the information about private lenders for small business proves to be useful. Good Luck!
Posted in: Business
How to Get Rid of Tax Debt
It’s income tax time again, Americans: time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta. - Dave Barry
Though Mr. Barry has exaggerated it highly, it’s a fact that taxation is an inescapable truth of life and filing taxes can be an arduous and nightmarish task for some. It is worst for those hounded by the IRS for tax debt. There are many ways in which you can get IRS sleuths on your tail. The easiest one is to refuse paying your taxes! You can run as much as you want from tax debt, but you can’t hide from the all seeing, all pervading IRS!
Jokes apart, unforeseen situations crop up all the time creating a cash crunch, which makes it difficult for many to pay off their tax debts. Long due tax debts can invite tax liens, ultimately leading to loss of property and assets. There are ways in which you can relieve yourself of this burden, which I will discuss, further in this Buzzle article. Keep reading ahead to know all about how to get rid of tax debt and get back your peace of mind.
How to Get Rid of Tax Debt Effectively?
Well, obviously the only way out is to pay off the tax debt in full. The question is, how do you arrange for the time and funds required to do so. Here are some of the strategies which can singularly or in combination, help you out in clearing off your tax debt.
Call in a Professional Tax Consultant
Treading through the maze of tax laws can be a tough job and it helps if you have a tax consultant by your side, who knows his way around them. Tax consultants are professionals who know the ways in which you can climb out of the tax debt hole, that you have dug for yourself. According to the nature and size of your tax burden, they can suggest the measures that can be taken to get rid of it, once and for all.
Claim Tax Deductions to Lower Debt
One way of fractionally reducing your tax debt is claiming deductions on the basis of your expenses. From fuel expenses to home improvements, there are many types of tax deductions made available to reduce your tax debt. A tax consultant can guide you in this regard.
Start Saving & Cut Down On Expenses
When you are knee deep in debt, you can’t afford to splurge. You need to save and smartly cut down expenses to bare essentials, while focusing on increasing your income, by working extra harder. That way, you can eventually save up enough to pay up your tax debt.
Raise a Personal Loan
While digging up another hole to fill one dug before isn’t the most feasible proposition, raising a personal loan to pay off tax debt makes sense in times of desperation. Of course, this only transfers debt, without clearing it, but it buys you more time.
Arrange With the IRS For Payment of Dues Through Installments
Another way out is to negotiate with IRS and ask for an installment based settlement plan. A provision for this has been provided through the IRS Form 9465, which is a formal application, for a installment based payment agreement. This form must be duly filled and attached to the tax return you file. Meanwhile, clear off as much of your tax debt as you can, while asking for a settlement plan for the rest.
Earning more, saving and asking the IRS for an installment based settlement seems to be the most sound proposition of all, as far as clearing tax debt is concerned. Declaring bankruptcy to discharge tax debt is undoubtedly the very last proposition I would like you to consider as it leaves a permanent stain on your credit record, which makes any availability of credit in the future, almost impossible. You are bound to find assistance from the IRS if you ask for an installment based settlement plan. Consult tax advisers, who can provide you with the expertise that is required in solving tax debt problems. Plan well and stick to the plan, to be free of the tax burden eventually.Â
Posted in: Finance and Tax
Smart Shopping When Economic Times Are Good
When economic times are good, you may be inclined to shop with little regard for price or value. But when conditions turn sour, as they have for many Americans, it’s another story. The advertising industry is devoted to identifying what citizens consider significant. Even more so, the market manipulators create those choices. With customers now in short supply and lesser sums to be spent, the competition is as fierce as it is grotesque. As your dollars must be stretched longer and harder, you’d better spend each of them wisely.
What brand of watch do you wear? Whether a top-of-the-line Oysterquartz Datejust, a fashionable Cartier, a respectable Bulova, or an economy Timex, recognize all are battery-operated, with a similar quartz movement, and none fail to keep excellent time. Except for the archaic Rolex, the day of the mechanical Swiss movement is a thing of the past. The current models all do a better job than the “precision” pocket watch your Great-grand-uncle Elmo used as an engineer on the Lackawanna Railroad. The only justification for a high-priced model is self-image and the illusion of prosperity. The value of these qualities is overrated.
And while on the subject of small mechanical devices which serve a need, consider the hyperbole employed by one firm to convince us of the importance of a $600 ballpoint pen. The arguments include an appreciation of beauty and workmanship, the profound emotional experience you receive utilizing a fine writing implement, and the implication you will be admired by clients and associates for your taste and culture. A number of competing firms aggressively promote substantially identical versions, with radio and television ads regularly employed. There are two fascinating aspects of this campaign, the first being that the hired pitchmen manage to keep a straight face while reading their lines. The other is that anyone not certifiably demented actually believes a word of it. Nonetheless, for whatever reason, the pens enjoy a market. On a personal note, the pen in my shirt pocket, with probable value of about 29¢, carries the somewhat worn inscription “Resdeck Plumbing, Redondo Beach, Calif, Your problems are our problems.” In the past month I used that pen to sign a variety of documents which, to borrow a line from one of those ads, were truly “admired by my associates.”
What can be said about wristwatches and ballpoint pens is equally true as to other highly promoted products. These include magazine offerings, timeshare projects, $300 per ounce bottles of perfume, Las Vegas weekend getaways, and the purchase of lottery tickets, to name just a few. As a rule of thumb, the more overpriced the merchandise, the more innovative its promotion. Perhaps there is a connection, if only because moderately priced items which represent honest value incur less sales resistance, so need not be touted with such vigor. Reflect, for a moment, on the recognizable voices and faces making the outrageous claims. If there’s a benefit to this, perhaps it’s that the association of certain marketing celebrities with a product of any sort saves you the effort of analyzing the offering; you may reject it out of hand.
Let me offer a few other examples of money badly spent. This behavior pattern multiplied and added up over a lifetime represents a fair chunk of your earnings.
Twenty-four rolls of a popular brand of toilet paper is available at Walmart for $10.19. Six rolls of the same product, selling at a major market of $6.46, is easily dropped into a shopping cart. The two-hundred-fifty percent markup doesn’t seem to bother many housewives. It should.
An envelope containing three sheets of paper arrived in the mail yesterday with two 42¢ stamps—total: 84¢. At two ounces, its correct charge is 59¢. Actually it weighed just under an ounce, so the sender evidentially guessed on the high side. Much correspondence arrives with excess postage¾a lazy and expensive way to send mail. As you might guess, my desk drawer contains a small sixteen-ounce postal scale. I’ve owned this little device since 1962 when postage was 4¢ per ounce. Over the years the scale has paid for itself a thousand times.
And speaking of envelopes and paper supplies, where might they be bought cheaply? Except for top-grade rag content or custom-engraved stock, avoid the stationery stores. Even the major discounters are not the places to go. A little comparison shopping reveals paper supply houses offer the lowest prices, and most are open to the general public.
When you fill your car with gasoline, does the lesser-priced regular grade or the higher-priced premium grade end up in your tank? Don’t base your decision on assurances by the service station manager promoting the more expensive fuel, but on performance you can actually experience. The fundamental difference between the two grades is octane number¾burning speed—when in earlier years slower burning helped prevent engine “knock.” Because of the lower compression ratios of today’s cars, most function satisfactorily on 87-octane fuel. The test is simple to conduct. With the lower octane gas in your tank, accelerate up a slight grade in drive gear. If you experience no unrelenting “pinging” of the engine, then the lower octane gas is working well and you may save yourself the cost of the more expensive fuel.
I hope this message is coming across clearly. You’re not well advised when you make your buying decisions based on urging from shopkeepers or exhortation from advertising. Sharpen your buying habits with a healthy dose of skepticism. Look closely at the product, read the specifications, verify the quality, and compare prices. You’ll often find what is claimed is not what is offered. In most of your purchases you are less familiar with a product than are its vendors. You can overcome this disadvantage with a little effort and by educating yourself. The results are cumulative and your performance will improve with time.
Posted in: Business
Reviews For 2009 Economic Markets
Following the end of the summer, the final stretch of 2009 offers a good opportunity to take stock of the events that roiled the economy this year and assess the tone of the financial markets for the rest of the year.
Buoyed by an encouraging stream of positive economic data, sentiment in the financial markets has been relatively upbeat. Much of the recovery has stemmed from the monetary and fiscal stimulus the government pumped into the financial system in copious amounts to revitalize critical pipelines of money and credit.
However, this year will see a record volume of default in corporate debt, in line with expectations. In the first eight months of 2009 a total of 216 corporate issuers defaulted (both nonfinancials and financials), affecting rated debt worth $523 billion. If this pace continues, the global default tally will reach 324 in 2009, the highest annual total in 28 years—since the inception of our data series on defaults. The volume of debt affected by these defaults also soared to a record high.
Other key takeaways from the year thus far:
• The U.S. is the epicenter of economic and credit-market weakness. At the beginning of the year our 12-month forward baseline prediction for the U.S. speculative-grade default rate was 13.9% by yearend, with an upper bound of 18.5% and a lower bound of 10.0%. The default rate hit 10.4% in the 12 months ended in August 2009, giving us reason to believe it is headed toward our predicted range by the end of the year. Corporate default incidence (by count) within the population or rated companies has been highest in the U.S., which blazed ahead with 158 defaults in 2009 (through Sept. 16). Of the remainder, the EU recorded 15, the other developed markets (mainly Canada) 12, and the emerging markets 31.
• Consumer discretionary sectors lead the global default count, though industrials and housing-related sectors also are reporting numerous casualties. Companies in leisure/media are in the lead globally (mainly because of the U.S.), with 53 defaults in 2009 (through Aug. 31). Next in line is the aerospace/auto/capital goods/metals category (35 defaults), followed by forest products and building materials (26 defaults), and consumer/service (24 defaults). When factoring in only speculative-grade ratings, homebuilders and forest products led with a global default rate of 18% for the trailing 12 months ended in August.
• Defaults continue to emerge from the lowest rungs of the ratings ladder. This is true not only in a single year but also on a cumulative basis. More than four-fifths (86%, or 187 entities) of this year’s defaults year-to-date emerged from the speculative-grade domain, with an initial rating of BB+ or lower.
• Companies with an original rating of B face maximum default risk exposure. Among this year’s defaulters, entities with an initial rating in the B rating category (which includes B+, B, and B-) accounted for the largest number of defaults, at 122. Next in line were entities with an initial rating in the BB rating category, with 54. Companies with a first rating of CCC+ or lower accounted for 11 of this year’s total default count.
• An avalanche of low-rated rating originations during the credit boom indicates that considerable default risk still resides in the pipeline. For example, a total of 1,340 new speculative-grade ratings were originated globally from 2006 through the first half of 2009, of which only 100 have defaulted. This indicates a survival rate of 92.5%, which is expected to erode over time as more casualties occur and more issuers age. It is difficult to pinpoint the exact timing for such casualties because forbearance measures can delay the day of reckoning, particularly as financing conditions ease.
• The flow of distressed-debt exchanges has accelerated substantially and likely will reach an all-time high in 2009. Plummeting liquidity and deteriorating fundamentals set in motion a flurry of corporate distressed exchanges. In part, the increase reflected a pragmatic reaction to the shortage of financing options in the throes of the financial crisis. Of this year’s 216 defaults, 81 were defined as distressed exchanges, by far the single leading default trigger across both developed and emerging markets. With $71.0 billion in rated debt, Ford Motor was the largest issuer (by par volume) so far in 2009 to implement a distressed exchange. CIT Group, with $42.1 billion, came in second.
• By contrast, formal bankruptcy filings have been lower. The liquidity crunch created several bottlenecks for exit financing options and hastened the use of alternative pragmatic strategies, including prepackaged bankruptcies, distressed exchanges, and standstill agreements. Only 54 formal bankruptcies have been recorded globally this year, of which 48 were in the U.S., affecting rated debt worth $150.5 billion. With $53 billion in rated debt, General Motors was by far this year’s biggest bankruptcy, followed by Charter Communications, with $22.5 billion.
•Troubled leveraged buyouts (LBOs) from prior years remain a fertile source of defaults this year. The actual volume of LBOs has dropped precipitously, totaling only $21.9 billion in the U.S. in the first half of 2009, compared with a peak of $433.7 billion in full-year 2007, according to Standard & Poor’s Leveraged Commentary & Data. Moreover, in contrast with 2006, new deals in the U.S. are increasingly being funded with higher equity contributions and smaller shares of senior debt. Nevertheless, prior-year deals continue to emerge as casualties. In Europe, for example, 42 of 48 defaults recorded in the first half of 2009 were LBO-related.
Posted in: Economics