Category Archives: Finance

How to Apply for a Small Business Loan

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Small Business Loan Application Requirements.

Starting the Small Business Loan Process

How to apply for a small business loan: The process of applying for a business loan is a stringent one as compared to the standard procedures in obtaining a home mortgage loan or a personal loan. This is probably due to the fact that business loans contain a greater risk element as compared to other small business loans. Therefore, lenders need to exercise greater caution and emphasis when evaluating business loan applications in order to minimize their risk exposure.

What Lenders Look For

How to apply for a small business loan: With that, lenders evaluate their applicants based on the information that are provided as well as their judgment of the viability and profitability of the business being financed. Thus, small business loan applicants will be required to submit a loan proposal along with their applications with the purpose of creating a positive impression upon the lender.

The Executive Summary

How to apply for a small business loan: The first element of a loan proposal is an executive summary, providing short descriptions of the type of business and the industry, the purpose and usage of the loan, the proposed repayment conditions as well as the intended loan period. After that, the company information is provided, enriching the reader with the nature of your small business, the location of the business, company history, the products or services provided, key differentiation factors of the company or the product, the general growth of the industry, competitive information, growth potential and target customers.

Products and Projected Growth (Cashflow Analysis)

How to apply for a small business loan: It would help if you could include your company marketing strategy, detailed product information, historical information as well as projected growth plans for the company. Apart from that, if you plan to incorporate product or service extensions in the future, you should provide these descriptions within your small business loan proposal. If possible, geographical expansion plans will help in the proposal.

Applicant’s Credentials and Experience

How to apply for a small business loan: The next area that needs to be showcased in the proposal would be the credentials and experience of each member of the management team. Impressive credentials will provide assurance to the lender that the company is managed by individuals who are responsible and capable. This is important as having the wrong people managing the company could be detrimental for your small business.

Historical Records and Performance Evaluations

In any small business loan application, historical records are essential to be used in evaluating the performance of a company. As new companies do not yet have these records, the financial records of small business owners will be used as the basis of evaluation. Income tax returns forms are also required by lenders. All of these records provided should be the latest copies less than 90 days old, with the exception of the income tax returns form.

Applications for Existing Companies

If the small business loan is applied for an existing company in active operations, company financial statements, including profit and loss accounts, balance sheets and the net worth reconciliation record should be included in the small business loan application. Again, all of this information should also be the latest and less than 90 days old. Additionally, a listing of accounts receivables and other short term and long term debt should be attached.

New Business Application

How to apply for a small business loans: On the other hand, if the loan application is submitted for a new business, a pro-forma balance sheet and profit and loss account should be provided. Apart from that, a cash flow projection for the upcoming year is drafted to indicate the possibility of recovering the debt. This also means that projected revenue, profits, costs incurred and expenditure should be listed out in the loan application with definite explanations provided as well as a list of assumptions.

Collateral and Assets

How to apply for a small business loan: If you possess assets that you wish to use as collateral for your loan, details for this should be provided to the lender as well. It is often common for lenders to request for dual sources of repayment in the event that one source is defaulted. This means that if the small business owner defaults on his repayments, the collateral can be sold in order to recover debt.

Finally, other documents normally required to apply for a small business loan would be items like the article of incorporation, lease agreements, partnership agreements, license, references, etc. As the list of required documentation, information and attachments differs between lenders, it is best to check with the individual lender on their specific information and documents required to be attached with the small business loan application.

For more information on how to apply for a small business loan and other financial products check out this website: Lendergroup.net

How to apply for a loan for your business

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How to Apply for a Business Loan

Starting the Business Loan Process

How to apply for a business loan: The process of applying for a business loan is a stringent one as compared to the standard procedures in obtaining a home mortgage loan or a personal loan. This is probably due to the fact that business loans contain a greater risk element as compared to other loans. Therefore, lenders need to exercise greater caution and emphasis when evaluating business loan applications in order to minimize their risk exposure.

What Lenders Look For

How to apply for a business loan: With that, lenders evaluate their applicants based on the information that are provided as well as their judgment of the viability and profitability of the business being financed. Thus, business loan applicants will be required to submit a loan proposal along with their applications with the purpose of creating a positive impression upon the lender.

The Executive Summary

How to apply for a business loan: The first element of a loan proposal is an executive summary, providing short descriptions of the type of business and the industry, the purpose and usage of the loan, the proposed repayment conditions as well as the intended loan period. After that, the company information is provided, enriching the reader with the nature of the business, the location of the business, company history, the products or services provided, key differentiation factors of the company or the product, the general growth of the industry, competitive information, growth potential and target customers.

Products and Projected Growth (Cashflow Analysis)

How to apply for a business loan: It would help if you could include your company marketing strategy, detailed product information, historical information as well as projected growth plans for the company. Apart from that, if you plan to incorporate product or service extensions in the future, you should provide these descriptions within your loan proposal. If possible, geographical expansion plans will help in the proposal.

Applicant’s Credentials and Experience

How to apply for a business loan: The next area that needs to be showcased in the proposal would be the credentials and experience of each member of the management team. Impressive credentials will provide assurance to the lender that the company is managed by individuals who are responsible and capable. This is important as having the wrong people managing the company could be detrimental for the business.

Historical Records and Performance Evaluations

How to apply for a business loan: In any loan application, historical records are essential to be used in evaluating the performance of a company. As new companies do not yet have these records, the financial records of the owners will be used as the basis of evaluation. Income tax returns forms are also required by lenders. All of these records provided should be the latest copies less than 90 days old, with the exception of the income tax returns form.

Applications for Existing Companies

How to apply for a business loan: If the loan is applied for an existing company in active operations, company financial statements, including profit and loss accounts, balance sheets and the net worth reconciliation record should be included in the loan proposal. Again, all of this information should also be the latest and less than 90 days old. Additionally, a listing of accounts receivables and other short term and long term debt should be attached.

New Business Application

How to apply for a business loan: On the other hand, if the loan application is submitted for a new business, a pro-forma balance sheet and profit and loss account should be provided. Apart from that, a cash flow projection for the upcoming year is drafted to indicate the possibility of recovering the debt. This also means that projected revenue, profits, costs incurred and expenditure should be listed out with definite explanations provided as well as a list of assumptions.

Collateral and Assets

How to apply for a business loan: If you possess assets that you wish to use as collateral for your loan, details for this should be provided to the lender as well. It is often common for lenders to request for dual sources of repayment in the event that one source is defaulted. This means that if the business owner defaults on his repayments, the collateral can be sold in order to recover debt.

Finally, other documents normally required for a loan application would be items like the article of incorporation, lease agreements, partnership agreements, license, references, etc. As the list of required documentation, information and attachments differs between lenders, it is best to check with the individual lender on their specific information and documents required to be attached with the loan proposal.

Overcoming Debt with Consolidation or Bankruptcy

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Tips when Considering Debt Consolidation

First things first, a lot of people may actually think that they only have a few choices when it comes to solving their financial problems. If you find yourself overwhelmed with debt, there are two common options for those who are burdened with enormous amounts. Unfortunately, many take the easy way out by declaring bankruptcy, doing so will leave an embarrassing and indelible mark on your credit report for up to 7 years, which will result in higher interest rates, less credit and if you try to qualify for a mortgage you will most likely not be able to get a loan to cover a high percentage of the financing you need. Normally, an 80% first mortgage and if you can get a second mortgage, it will be at much higher interest rate and probably only 10% of the loan value for a total of 90% of the loan to value and you’ll have to come up with 10% down.

Clearly, everything will come with a higher price for a period of time but you’ll have to weigh that with a straight debt consolidation solution in which you pay off your debt. However, in many cases you can negotiate with the collection agency and it’s realistic to get 25% – 50% of the debt forgiven, if you can show that you’ll continue to make monthly payments until the remainder is paid off.

Many of the debt settlement / debt consolidation companies were actually established by the credit card companies themselves. Why, you ask… because it only makes sense for the credit card companies to help you pay off your debt because they can either forgive some of the debt or reduce the interest rates, lower the monthly minimum payment requirements or some combination and get paid a portion of the money owed or receive nothing if you declare bankruptcy. What would you do if you were in their shoes? The answer is obvious. This is why a lot of people who have been saddled with debt are now being offered debt settlement. Of course, not all debt consolidation service companies are owned by credit card companies but many are.

Some groups offer debt settlement programs through arbitration. The “selling point” when it comes to these kinds of solutions is that debt settlement will actually help end your debt problems, without having to go through declaring bankruptcy, without having to pay overcharged debt consolidation program fees as well as helping you avoid getting caught in the debt consolidation trap that a lot of people have fallen victim to.

In many cases, what the organizations do that offer debt settlement services is negotiate your debt down with the collection agencies that have been given your case. I would encourage you to contact a number of companies to ensure you feel comfortable and that you are working with a quality company that doesn’t over-charge you for their services.
On the other hand,if you would really like to save money, which only makes sense since you are already heavily in debt… then negotiate with the collection agency yourself. It’s not difficult, rather than getting upset when you get called night after night simply tell the collection agency rep that you would like to pay off your debt but you can only do it if you can get it reduced and then ask them that you would like to get the debt you owe reduced by 50% – 60%, even 75% and ask them to see what they can do. Ask for a lot up front because as in any negotiation there’s always a give and take. Believe me, they will go to work for you and your offer will be seriously considered because they only get paid when they collect and it’s better to get their percentage on a smaller amount than “diddly squat” on the full amount.

Of course, you’ll have to decide what route you want to take… bankruptcy versus debt settlement but shop around and realize that you do have options. The internet is full of companies offering their bankruptcy or debt settlement services, but be careful and don’t let them push you around and never work with anyone you don’t feel 100 percent comfortable with.

When to Consider Filing Bankruptcy

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Bankruptcy occurs when a person or business runs into huge debts and there is hardly any money left with which to repay those debts. Many people who are in debt often get there by taking out big loans from the banks and private companies in order to run their business or personal finances.

Others pile up large sums of credit card debt and get over run by the high interest rate penalties as they get further and further behind. However, since the economy is constantly fluctuating, and in the terrible economy we find ourselves, many business owners find themselves unable to increase business profits in order to recover from high debt to income ratios. This prompts many people to consider filing bankruptcy.

So, the interest rates on existing debt keeps piling on. The loans and credit card advances are used to cover debts that inturn leads to an upside down pryimid of debt that keeps on sprialing downward, and resulting in a colapse of financial stability.  When people find themselves overwhelmed with debt, and the phones won’t quit ringing with bill collectors, many find themselves in a situation where they have not choice but to consider filing bankruptcy.

The credit card bills are also a source of trouble. They are charged with good interest and at the end of the month when the expenditure has chewed your month’s income; the credit card bill can make you bite the dust. This becomes the time when many individuals and business owners are forced to consider filing for either Chapter 7 or Chapter 13 bankruptcy.

There are many reasons that people find themselves filing bankruptcy. In the world today where fraud and betrayals are considered to be around every corner, any partner, shareholder, or director might connive to pitch the company or business into some form of bankruptcy. Here the reasons can be mutual squabbles and vengeance.

Gradual denouncement from the market- the commodity you sell today at price X, may be sold tomorrow by some other company at a much cheaper price Y. This can oust or eject your product from the market replacing it with a relatively cheaper one. Various factors can place your company in a financial postion where considering filing bankruptcy seems to be the only viable alternative. 

However, where there is a will, there is definitely a way. Just as there are tw0 sides of a coin, there are two aspects attached to everything. When you glare at the negative side of the situation, its positive aspect is lurking behind according to which bankruptcy can be seen a situation that provides you a golden chance to start things afresh.

The law gives us the oportunity to start over. This is done by filing your application for bankruptcy, to seek help from the government to help you overcome the financial disaster. Once you forward your application and it is accepted, the government repays most of your debts. This becomes possible by taking hold of your assets and dividing them amongst the creditors in an organized manner. But the debts that are associated with embezzlement or those huge ones that cannot be covered up via one’s assets can be problematic. In case of businesses filing for bankruptcy, certain procedure has to be followed up.

Besides this there are a few debt consolidation services that advertise themselves through television, print media etc. Debt consolidation signifies using a loan provided by that service to repay other debts. This loan is comparatively at a lower rate of interest and it often becomes easier for many to repay one loan instead of five to six ones. 
In any case, if you are seeking financial aid from the government, banks, services etc., there stands the barrier of qualification. It is that you should be able to prove the service or the bank that your case is authentic and not a fraud. In order to escape future troubles, the government has formulated strict laws and eligibility criterion in this area.

However, in any case it is better to seek the advice of an advisor before seeking help to make up your crisis. This will not just educate you about all the related terms and conditions but also the possible legal and financial consequences. Just keep in mind that help always comes to those who are looking for it with a true heart.

When to consider filing for bankruptcy can be a fairly traumatic event in life. However, when you consider the alternatives, you must either climb your way out with other means, or bite the bullet and file for bankruptcy. When and What type of Bankruptcy you choose is something you should consult with your legal counsel.

Obtaining a Conventional Loan after Bankruptcy

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Can I get a conventional loan after bankruptcy?

 If you are considering obtaining a home loan after bankruptcy, below are the current requirements that are associated with conventional and government backed home loans.

 

FHA Ch 7 BK……must wait at least 2yr’s from discharge before you can apply for an FHA loan.

FHA CH 13 BK….after you have completed this type of bankruptcy you must have no lates on your credit report in the past 12 months and reestablished new credit

FHA Ch 7 BK……must wait at least 2yr’s from discharge before you can apply for an FHA loan.

FHA CH 13 BK….after you have completed this type of bankruptcy you must have no lates on your credit report in the past 12 months and reestablished new credit

FHA and Conventional after Foreclosure or Short Sale….both FHA and Conventional view a short sale and foreclosure as the same and although a short sale is a better option for the general use of credit, the lending guidelines for a short sale vs a foreclosure are the same with respect to how long each program requires a borrower to wait before they can apply for a new loan…On FHA you must wait a minimum of 3 years before you can apply for a mortgage loan after a Foreclosure or Short Sale

Conventional after Ch 7 BK….your bankruptcy much be 4 years out of discharge or dismissal before you can apply for a new mortgage loan

Conventional after Ch 13 BK… 2yr’s after discharge date or 4yr’s from dismissal date before you can apply for a new mortgage loan

Conventional with a Foreclosure and Short Sale…they are very complicated………with few considerations, Conventional may require 5yr’s from the completion date but in most cases, it will go as far out as 7yr’s depending on FICO or credit score and how much down payment you have to put down

All FHA loans will require a minimum credit score of 640 with the exceptions of the Bond programs. Bond programs still require a minimum credit score of 620.

VA purchase loans still require a minimum credit score of 620.

For more information on home loan finance  and bankruptcy information go to Lendergroup.net

Can I refinance after bankruptcy

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Are you thinking “Can I refinance my mortgage after bankruptcy” If yes, then you should know that after a bankruptcy, you can very well refinance your mortgage loan for a reduced rate. It would help you lower the monthly payments on your mortgage loan.

Why to refinance mortgage after a bankruptcy

After a bankruptcy, you may have to refinance your mortgage loan under certain circumstances. It may happen that your secured debts were not included when you filed a bankruptcy. In such a situation, you can refinance your mortgage loan after the discharge of bankruptcy. This would help you lower your monthly mortgage payments. Even if you have paid off your mortgage arrears through bankruptcy (Chapter 7 or Chapter 13), you can refinance the remaining mortgage balance into a lower interest rate to make your monthly payments affordable.

When you can refinance mortgage after a bankruptcy

If you’re thinking “Can I refinance my mortgage after bankruptcy”, then you should know that you have to wait for sometime before you can refinance your existing mortgage loan. In case of a Chapter 7 Bankruptcy, you need to wait for 4 years (after bankruptcy discharge) in order to refinance your existing mortgage with a conventional home loan. However, you can refinance with an FHA mortgage only after 2 years after a Chapter 7 Bankruptcy discharge. In case of Chapter 13 Bankruptcy, you can refinance your existing mortgage with a conventional home loan after 2 years and with an FHA mortgage loan after 1 year of bankruptcy discharge.

How to repair credit record after a bankruptcy

After a bankruptcy, it is advisable that you repair your credit record before you refinance your mortgage loan. It would help you take out a mortgage loan with better terms and conditions.

Apply for a secured credit card – If you’re not able to take out an unsecured credit card after a bankruptcy, it is advisable that you apply for a secured credit card. You can take out a secured credit card by depositing a certain amount that becomes your credit limit. Use the card to purchase items and pay off the balance at the end of every billing cycle. Having revolving credit can help you improve your credit score.

* Do not incur debts – After a bankruptcy, you should plan a budget and manage your finances in a way to not incur debt. Even if you charge your credit cards for making purchases, make sure you pay off the outstanding balance every month. This would increase your credit utilization ratio and in turn, make you creditworthy.

* Dispute errors in your report(s) – You should order your credit reports from 3 major credit bureaus and check for errors, if any. If there is inaccurate negative information in your reports, then dispute them with the credit bureau(s).

Apart from above, you should also calculate your debt-to-income ratio before refinancing your mortgage loan. The lenders may offer you a mortgage loan with suitable terms and conditions if your debt-to-income ratio is low. This ensures that you’ll be able to make the monthly mortgage payments on time

Help with Debt Consolidation

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When you are in debt, it seems like whatever the amount of money you owe is just too much. It can become overwhelming and you may begin to wonder if a debt consolidation program could help you. Take a minute and ask yourself these questions: – Are you struggling to keep up with minimum payments? – Are your interest rates rising continuously? – Do your debts keep you awake at night? If you answer yes to any of these questions and feel like your credit card bills are spiraling out of control then a credit card debt consolidation program may be the best option for you. Consolidating your debt into a single low-interest monthly payment can save you thousands of dollars and speed the process of paying off debts. And as a bonus, over a period of time you can usually improve your credit score because you will be making consistent monthly payments to your creditors while reducing your debt much faster. Credit card consolidation is considered by many experts as the first step in the process of debt elimination and the prelude to improving your money management skills. After all, once your debt is consolidated your financial worries may not be over. You must get the proper guidance and education on how to better manage your finances so you won’t face more debt in the future. Who should not consolidate? Every situation may be different; however there are three things to consider before enrolling: 1. Do you really need to consolidate? 2. Can you still afford the reduced payments? 3. Will consolidation save you time, money or both while paying off your debt?