Monthly Archives: October 2017

Loan Solutions For Individuals and Investors

FHA apartment financing is a tool that individuals as well as investors can use to ensure that they are able to continue to pay their mortgage or financing loan. You can use an FHA loan to help you find financing for your apartment if you are feeling the pinch. The housing market is facing difficult times and banks are tightening their belts and coming down hard on people who default on mortgage repayments. Although the economy is recovering, analysts say that it is not fast enough to keep up with the demand on financial resources. America is still set for tough times ahead. FHA apartment financing may help.

If you are struggling with a mortgage loan on an apartment, then the worst thing you can do is to bury you head in the sand and hope that your problems will go away. Pretending to be an ostrich will not solve your financial issue. There are steps that you can take to ensure that you remain financially afloat as you navigate your way through the final stretches of the river of recession. If you are an apartment building owner, now is the time to start looking at FHA apartment financing as a way to ensure that you never run into any financial problems. FHA apartment financing is a simple and smart business decision that will help you in all aspects of your apartment mortgage financing or refinancing needs.

FHA apartment financing has been around for much longer than you might imagine. FHS and FHA apartment financing began in 1934 when America was in the maelstrom of the Great depression and people across the country were struggling to meet their mortgages. The Federal Housing Administration (FHA) has been one of the most successful and effective resources ever provided by the government and it still continues to provide financial solutions for thousands of people every year. The way that an FHA financing loan works is that it insures mortgage lenders against the possibility of loss due to non-payment of the loan. Since the government is actively involved in creating more housing and more apartment buildings for people across the country, it is now even easier than before to utilize the FHA financing program to ensure that a bank or financial services provider approves your loan application.

The FHA exists to help investors and to steady the real estate market by providing financing solutions that will help investors and individuals who own apartments and apartment buildings. An FHA loan ensures and insures the loan and will make your proposal and business plan far more attractive to investors and banks when you are applying for a loan. apartments and apartment buildings. FHA apartment financing is like having a joint venture with one of the biggest and safest institutions in the world.

History of Accounts Receivable Financing Loans

An accounts receivable financing loan is exactly what it sounds like. Your business can take out a loan against money that is owed to you, so it’s essentially borrowing from yourself. When you need money quickly, it could be that untried option that you’ll actually get approved for. If you find the right bank or lending institution, you might even be able to negotiate reasonable short term repayment and get an affordable interest rate. Some banks right now are offering less than 2% for loans of up to thirty days. That extra month can be a huge boost if you’ve just made a large sale of existing inventory and need cash to purchase additional inventory while you’re waiting for payment on the last sale.

The difference between an accounts receivable financing loan and more traditional loans is that banks look at the credit score and payment history of those who owe you money instead of your own history. For those with bad credit or companies just starting out, it may be advantageous to have the bank look at the customers you’re invoicing instead of you when you’re attempting to get your hands on some working capital financing. Traditional loans are always hard to come by, especially in this economic climate, unless you happen to have stellar credit or lots of collateral.

What is Factoring?

One of the oldest financial practices for merchants having difficulty making ends meet is the sale of accounts receivable for a percentage of what they are worth. This process is known as factoring, because when you sell your accounts receivable, you sell them to a factor. The practice is very common in the debt collection business. That’s why you often hear from multiple collection agencies on the same debt. The first one will attempt collection and then sell it to another agency, one that is actually a factor, for a percentage of the paid value of the debt. They then use the cash to expand their business or purchase debt from other agencies.

Your bank may not offer to buy your account receivables outright, since they’re not in the business of purchasing debt, but there are a number of agencies and online sites where you can find someone to take those unpaid invoices off your hands. What you want to do when shopping for this type of loan is to seek out the highest percentage of debt that factors are willing to offer. They won’t pay dollar for dollar, so don’t waste your time asking, but some will give eighty or ninety cents per dollar if they can see a strong likelihood of receiving prompt payment.

History of Factoring and Accounts Receivable Financing

The practice of buying someone’s debt in return for cash goes back to pre-colonial England, when merchants would sell their invoices in return for cash to pay workers and finance trade ventures. Since many of these merchants ran small operations, the credit worthiness of their buyers was evaluated before the money was given. Just as it is today with smaller companies selling goods and services to larger, more credit worthy companies, back then the merchant himself couldn’t get financing unless he had firm commitments from larger distributors and retailers. This early form of accounts receivable financing loan laid the groundwork for what would become an invaluable source of financing in the late 19th and early 20th Century.

After the Civil War in the United States, new markets opened up with the development of what was at the time considered advanced technology. The invention of the cotton gin in 1793 had actually given merchants the tool they needed to mass produce textiles, but transportation methods were still primitive. By the 1870’s, steam engines and iron clad ships were making the world a smaller place and telegraph lines made communication much simpler. The industrial revolution began and once again small companies and independent merchants were selling goods and services to larger manufacturers and textile mills. Factors became popular again and banks began to issue their own version of accounts receivable loans.

Who are the Best Candidates for AR Financing Loans?

The small company with little or no credit selling to the large corporation with an established payment history is the best candidate for this type of loan. As more and more people are using the internet to strike out on their own, the banks see an increase in the number of applicants for this type of funding. Think of the independent programmer designing apps for iPhones or Blackberries. The company buying those apps will probably take a while to make payment for them, but their invoice is considered as good as cash by a financial institution because they have top-of-the-line credit. Take out a thirty day loan against those invoices and you’re looking at an interest rate of as little as.69% in some cases and a maximum of 1.59%.

Economic Roadblocks and Reasonable Alternatives

When the nation or the world is experiencing a period of rapid growth and a growing economy, the banks are more likely to lend money using the accounts payable financing loan option. With the situation being what it is today, you’ll have to show growth within your industry and present invoices that are going to established companies in no danger of going under. Many of the big players in the retail industry, once considered untouchable, have gone out of business in the last few years, victims of over-leveraging during a brutal recession. Banks and other lenders took a hit when those companies defaulted and they are being more cautious now as a result.

What is a Bridging Or Short Term Finance Loan

To begin with we will take a look at what exactly is a bridging or short term loan loan. A bridging loan can be described as a loan that covers the gap between one finance deal and the next. For example, a bridging or short term finance loan is commonly used in situations where ‘standard’ finance options cannot possibly deliver the finance you need within the required time frames

Bridging or Short term finance loans are commonly used in a number of situations, for example:

  • You have applied for and been unconditionally approved for finance, however days before settlement your financier advises that they are unable to complete the finance required as promised. In most cases an extension can be arrange, however if you have an uncooperative vendor, they may insist you complete the purchase contract on the required date, or stand losing a considerable deposit placed to secure the property.
  • An opportunity arises to purchase a well priced asset, provided you can come up with the capital in a short space of time. If the time frame required to provide the finance is shorter than two weeks, most ‘standard’ financiers will be unable to provide the appropriate funds to complete the transaction and the opportunity may go begging – however, a short term or Bridging Finance loan may allow you to seize the opportunity and allow time to refinance under a longer term arrangement.

What is my bridging loan secured against?

Your bridging loan is generally an advancement against property security which is used as collateral. As a result your bridging loan is secured against property. Despite the fact that your bridging loan is secured against property you will be required to pay a higher level of interest due to the short-term nature of this loan, and the increase service levels provided to ensure a efficient and timely advance of the funds required

What time frames can I lend my money over?

Generally Short Term or Bridging finance loans extend for periods of 2 to 4 months although every good short term lender will give you the opportunity of flexible repayment times. As a general rule you will only pay the interest in monthly rests for the period you hold the advanced funds off with the principal amount being paid off at a time arranged between you and the lender. These terms are part of what you will negotiate in order to find the best solution for your needs.

Advantages of a short-term bridging loan

The main advantage of short-term bridging loan is the superior service and fast turnaround provided by the broker or lender seeing the due diligence process fast tracked and decisions made quicker. Another great advantage of a bridging loan is the ability to get a very quick answer thereby putting your mind at rest in regards to your lending needs.

Is Bridging Finance expensive?

Not if you consider the opportunities or potential savings it can generate. Whilst the rate may appear high initially, it is much better to evaluate the entire cost of a Short Term or Bridging Finance loan based on the opportunity cost it generates.

For example, if you have placed a 10% deposit on a property contract and without the use of a short term or Bridging Finance loan you stand to loose the entire deposit, PLUS be sued for potential specific no performance, the cost of a Short term or Bridging Finance loan on an overall basis may not seem that expensive. Further, if through the use of a Bridging Loan you are able to secure an opportunity that will generate equity or revenue far in excess of the initial costs of a Bridging loan, it is obviously very worthwhile to take out a Bridging facility to secure the opportunity.

How to find a bridging loan

The fastest way in finding a bridging is to search online as the majority of brokers are available online and can service your needs quickly. Redtree capital as an example is committed to helping you find your finance solution within the hour.

Lease Equipment Financing For Business

Rumour has it you aren’t getting your share of the amount of equipment business t financing enjoyed by your competitors and others. Let’s demonstrate how finance loans can be addressed in a time line that makes sense for your firm, with the rates, structures and terms that your competitors already enjoy.

We don’t think we have met any business owner recently who doesn’t feel that the traditional route or bank borrowing no longer makes sense for their asset acquisition needs. We don’t have to explain the benefits of dealing with a specialist in any industry, so the firms that offer lease financing in Canada is where you will find financing products that work for you.

We also don’t need to mention of course that if your firm is a start up, smaller in size, or perhaps going through some challenges… well… guess what – you are still a 100% candidate for lease and financing loans.

Many owners and managers searching for equipment financing for their business needs are under the pre-conception that certain assets can’t be financed. That’s where you ability to quickly focus in on a specialized firm that provides business lease solutions for your acquisition – and that includes computers, office equipment, plant and machinery assets, vehicles, and even intangibles such as software!

We are always intrigued by the reasons business owners offer up for leasing consideration – however when you think about it all those reasons come down to several key points – cash flow and working capital management, tax and accounting issues, matching the use of the asset to its estimated life. While every Canadian business owner likes to feel their needs are unique we are pretty sure that if you walk through those 3 key areas we noted above you will be able to significantly simplify your business equipment financing.

Is there a way to simplify the entire process? There sure is. Simply view what we will call ‘ the big picture ‘ around your transaction. Envision it as follows – your application and exchange of financial info with your lessor, discussion or correspondence leading to approval, documentation, and then finally funding and payment… which is often simply the payment made to your supplier, allowing you to receive the asset and put it to work for cash flow and profit generation.

There are hundreds of equipment financing and lease financing firms in Canada. We are quite sure you do want to ‘ simplify ‘ your business financing so speak to a trusted, credible and experienced Canadian business financing advisor who can ensure your business lease is positioned properly, approved, and funded. Now you are getting your share!

The Secret of Franchise Financing

It’s appealing, we know that. It’s the idea of owning your own business that is a proven brand and money maker. Franchise financing loans can help you address your entrepreneurial vision of owning a franchise in Canada. The ability to own your own business and generate profits and wealth is of course appealing to all.

Picking your franchise in some ways is half the battle, as you probably have been focused on purchasing a new or existing franchise that matches your skills, interest, and experience. The other half of the battle and some say the harder one (we would agree) is arranging franchise financing loans that make sense for your business and your own personal situation.

As we point out to clients, whether entrepreneurs are starting a major manufacturing company that might employ hundreds, or a pizza shop with a staff of three two considerations come to mind, always – they are debt and equity. We’re of course referring to how much you will put into the business, and how much business credit for a franchise loan can be accessed.

So are there some great secrets and tips we can share with yourself as a prospective entrepreneur – there sure are.

First tip/secret # 1 is simply to investigate carefully the financial requirements that your franchisor requires. These must be addressed in a solid and dedicated manner. If you don’t understand the requirements how can you address them? So ensure you understand the amount of financing the franchisor recommends. Is that all? Definitely not, that’s where our previous concept of planning was mentioned. Make sure you consider two other aspects of the business financing; they are working capital for daily operations, and some sort of plan for long term growth or expansion.

It’s probably not written in stone somewhere, but we have always felt that clients aligning themselves with a major brand that has a larger number of multiple units have a strong chance of financing success. Of course that isn’t always the case, as some new concepts in a number of industries continue to be introduced all the time, but it sure helps if the lender is enamored by the franchisors brand and success.

Another great tip and secret is simply that as opposed to spending all the time on the business itself when you are discussing financing, rather also focus on your own personal financial situation and experience. This is absolutely one of the most important criteria that banks pay attention to – namely how have you run your personal affairs, and at the same time do you have the type of business of management experience.

Some franchisees think because they don’t have very direct experience it might hinder their financing – the reality is by properly positioning your skills in a general sense, i.e. previous sales experience, customer service, etc you can capitalize on general business skills required to run any business.

You may not like to hear the news, but the reality is that you do in these times need a sizeable personal investment into the business, aka your owner equity. Those typical ranges between 30-50% depending on the size and nature of your franchise. In some cases you might be in fact buying an existing franchise from another franchisee who wishes for some reason to ‘move on.

Let’s share probably our greatest secret in financing your franchise – the government of Canada. Many clients are surprised to hear that a government program known as the CSBF / BIL program is the largest financier of franchises in Canada. Its underwritten, structured, and supported by the government and offers great rates, terms and structures for amounts up to 350,000.00 – that amount was increased from 250k in previous years.

Business Finance Loans

Making a prediction is a sometimes risky scenario, potentially damaging to your credibility, but we’re quite confident in saying that Canadian business owners will recognize non bank asset financing as credit facilities for business finance loans to be the best thing they every heard of when it comes to financing their business.

Quite frankly we don’t think we exactly going out and making a stretch comment because, hundreds if not thousands of Canadian firms are investigating and utilizing this type of financing.

As the Canadian business economy turns itself around going into 2011 most of are clients are finally focused on growth again.But how is that growth to be financing, since lending standards and criteria at institutions such as the banks don’t appear to have been liberalized at the same pace that your company hopes to grow at!

That’s where our trend prediction comes in. Asset based lending focuses on your assets and growth opportunities – it doesn’t focus on rations, tangible equity in your company, rations, covenants, cash flow coverage, etc, etc, etc!

So you are picking up on the opportunity, let’s see how things work. Asset based lenders keep it simple, they lend a very high value against your ongoing assets. What are the typical assets lent against – you can almost guess what they are. They are receivables, inventory, unencumbered equipment and real estate.

The big mystery around asset based lending in Canada, based on conversations with our clients, is that business owners don’t really know or understand who these firms are. So we’ll tell you.

They are specialized firms, both Canadian and U.S. based, that focus solely on providing credit facilities and business finance loans with your assets as security. They take the same security as a Canadian chartered bank would, and you manage your facility on a day to day basis, drawing down cash as you need it. Funds are wired into your account as you need them, based on… guess what… assets! That really is the one key difference that our clients pick up on, that the total focus of this type of assets financing is the collateral itself.

We already know your next question… because we’ve heard it a hundred times before. Its’ how much can we get ‘… followed by what does it cost.
Speaking in general terms your receivables are financed at 90% of their value, and because of the nature and marketability of different types of inventory this type of collateral is margined anywhere from 25-75%. Recall we had noted that unencumbered equipment can be drawn against also. Typically an appraised current market or liquidation value is agreed upon with you and the asset financing provider.

Costs vary around this type of financing. On occasion it is competitive with bank financing – and giving you twice the liquidity – but more often than not it’s more expensive. You offset those costs by greater access to credit facilities that will grow your business and profits.

Speak to a trusted, credible and experienced Canadian business financing advisor who can walk you through the Canadian landscape of business finance loans in the asset based lending area. You’ll quickly find, we think, that our prediction is becoming more true every day, asset based financing is hot! And here to stay.