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Learning Financing Terms

FAQ About Freight Factoring Loans

Posted by on Dec 6, 2016 in Uncategorized | Comments Off on FAQ About Freight Factoring Loans

Are you tired of receiving late payments for the clients that your drivers deliver cargo to? You can actually get paid before your customers pay for their shipments. All you have to do is contact a freight factoring company to get a loan that is based on what your customers owe. Take a look at this article to learn more about freight factoring so you will know if it is right for your business or not. What is the Freight Factoring Process Like? Basically, you will have to complete delivering shipments to your customers before you can go through with the freight factoring loan process. Once you have billed the customers, you will have what is necessary to apply for a loan. The freight factoring company will verify that the bills are legit and decide if they want to approve your request for advance money. The best thing about freight factoring loans is that the money can be in your bank account in a short period of time. For instance, some of the companies can deposit the money in as little as a day, but it varies between companies. Will a Fee Have to Be Paid for the Service? You must be prepared to pay a fee for the money that you are advanced from your freight bills. It is common for the lenders to charge a certain percentage that is based on the overall balance of the bills. The fee is necessary because it is how the freight factoring companies are able to make a profit. However, you will still be able to keep the majority of the money once your customers actually pay the bills. Will a Specific Volume of Fright Be Required? The good thing about dealing with a freight factoring lender is that there are usually no specific volume requirements. You can choose to receive money for a single freight bill if you desire to do so. You also have the option of receiving advanced money on a regular basis, which can come in handy if your company is in a financial bind. Are There Any Other Services Provided? There are many other services that are offered through fright factoring loan companies, but it depends on which one you choose. For example, some of the companies are able to run credit checks on the customers that you do business with. You might also be able to obtain fuel discount cards for your drivers if you sign a contract with a freight factoring...

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Hard And Fast: Loans Made To Save You And How To Avoid Loan Pitfalls That Can Break You

Posted by on Oct 5, 2016 in Uncategorized | Comments Off on Hard And Fast: Loans Made To Save You And How To Avoid Loan Pitfalls That Can Break You

Hard money lenders provide loans based on the property you put up to secure the loans. They are hard and fast loans because you get cold, hard cash fast, usually in only a few minutes to an hour. These types of loans can make you or break you, so you need to know how to use them properly. The following are examples where “hard money” loans can save you, and how to avoid having them break you. You Need a Lawyer Regardless of whether you need a lawyer personally, or your company needs legal representation, this is definitely one example where a hard money loan can save you. Retainers for most lawyers will run you a couple thousand dollars or more, and almost no one has that kind of cash just laying around. Your business, your house, or your car may be adequate enough to secure the loan and get the cash to the lawyer (or bail bondsperson) quicker. Your Company Looks Like It Is Missing Several Thousand in Assets Embezzlement accusations can be a real problem for your company if assets suddenly go missing and an accountant is going to report your company for white collar crime. You can keep the problem under control by putting the assets back with a loan and then conducting an internal investigation into where the assets went. You Need Some Working Capital Because Your Accounts Receivable Are Low Sometimes your customers just do not pay their bills on time. Then your accounts are low, you cannot pay your bills or your employees and it avalanches from there. A short-term hard money loan can get you over the hump. Just make sure you pay it back when your accounts receivable start filtering in. Avoiding the Pitfalls of These Loans All loans and lending have drawbacks for borrowers. Hard money loans are almost always short-term loans with high interest rates, which is why it behooves you to repay them doubly quick. Another pitfall borrowers make is borrowing in excess of what they actually need. That is almost always financial suicide, since you will probably not be able to pay the loan back as quickly as you thought, business may sour or slow, and/or you do not pay the loan in full by the contracted deadline. Only borrow exactly what you need to get past the emergency and then pay it back quickly to avoid large sums of interest or legal...

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The Pros And Cons Of Taking Out A Home Equity Loan To Pay For A Car

Posted by on Sep 7, 2016 in Uncategorized | Comments Off on The Pros And Cons Of Taking Out A Home Equity Loan To Pay For A Car

Many people take out home equity loans, also known as second mortgages, to pay for home repair or remodeling projects. However, you can pull the money out of your home and pay for a variety of other items, such as medical bills, college expenses, or even a car. Learning the pros and cons of taking out a home equity loan to pay for a car instead of getting traditional financing can help you decide if it is ideal for you. Here are some of those advantages and disadvantages. Cons of Taking Out a Home Equity Loan to Pay For a Car You’re Risking Your Home One of the biggest downsides to using a home equity loan to purchase a car is that you are risking your home. If you find yourself unable to work or lose your job, and can’t afford the second mortgage payments, a lien can be placed on your home or your home could even be foreclosed on. You’re Taking Away From Equity You May Need Down the Road The other disadvantage to using a home equity loan to pay for a car is that you are taking away from equity you may need later on. If you take out a home equity loan and purchase a vehicle with it, and then later need money for a home renovation or repair, you may not be able to get the money you need out of the equity of your home because it is tied up from when you bought the car. If you plan on doing any renovations or home repairs, and using your equity to finance it, avoid taking out a home equity loan for any other reason. Pros of Taking Out a Home Equity Loan to Pay For a Car The Interest Rates are Fairly Comparable One of the benefits to taking out a home equity loan is that the interest rates for a car loan and home equity loan are fairly comparable. And if you have bad credit but a lot of equity in your home, you may find that you can get a higher loan or better payment terms by taking out a home equity loan versus an auto loan. As such, you may want to compare the price of an auto loan and home equity loan if you need a vehicle and are positive you can pay the loan back. You Have Longer to Pay Off the Loan The other major advantage to taking out a home equity loan to pay for a car is that you typically have a longer period to pay off the loan. Home equity loans can have a life of 15 years. Car loans are often much shorter. Yes, you will pay more in interest if you spread the loan out over a long period of time. If money is tight in your household, yet you need another vehicle, taking out a loan for a longer period of time may help you afford that vehicle as your monthly payments will be smaller. A home equity loan allows you to use the equity in your home to fund other items. Learning the pros and cons of paying for a car with a home equity loan will help you decide if it is the best way for you to...

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FAQs About Escrow Costs And Prepaid Items

Posted by on Aug 15, 2016 in Uncategorized | Comments Off on FAQs About Escrow Costs And Prepaid Items

The home loan process can sometimes be confusion. One of the main points of confusion is the difference between escrow and prepaid items. When it is time to close on your home, it is important that you understand what they are and the fees you are facing. What Are Escrow Costs? During closing, you will have to pay certain expenses related to the actual real estate transaction. In essence, you have to pay the people and businesses that were involved in working on your loan. Escrow costs can vary, but they usually cover the loan origination fees, attorney fees, title search and insurance fees, and credit report charges. You even have to pay for the home inspection and appraisal required by your lender. You are solely responsible for the escrow costs, but some sellers are willing to negotiate to pay part or all of the costs. The seller might agree to split the costs with you in an effort to keep the purchase of the home on track. Your real estate agent or attorney can help with the negotiations. What Are Prepaid Items? Prepaid items are payments that are also required by the lender. However, they are different from escrow costs. Prepaid items are not necessarily related to the purchase of the home but to the home itself. The prepaid items that your lender could require you to pay include real estate taxes, homeowners association fees, and mortgage insurance premiums. The lender will determine how much of each you will need to pay at the closing. For instance, the lender might require you to pay several months of the insurance premiums at close to ensure that the policy is paid through a pre-determined time period. Can You Reduce Closing Costs? Since closing costs are unavoidable, you can explore ways to lower the amount that you have to pay. For instance, if you are financing your home through your bank, find out if it offers a loyalty program. If so, the bank might be willing to cut some of the fees you face, such as the origination fees for the loan. Since you are tasked with paying your mortgage insurance at the closing, shop around for coverage. If you currently have coverage on a car, find out if you can save by bundling your home’s coverage with it. Work with your lender and real estate agent to find out more about closing costs and what you can do to save on them. You might also want to consider home loans with Best Rates Mortgage,...

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What Is Peer-To-Peer Lending?

Posted by on Jul 13, 2016 in Uncategorized | Comments Off on What Is Peer-To-Peer Lending?

If you are in need of money, there are several options that are available to you. Each of them has their pros and cons. One option that you have is to use something called a peer-to-peer lender. That may end up being the best option for you.  Peer-to-Peer Lending Most people aren’t sure what peer to peer lending is. P2P lending happens when the people who have money connect directly to the people who need the money. In other words, you are talking directly to the person who is going to lend you the money. You aren’t dealing with a loan officer like you would be if you went to a bank or credit union. How P2P Lending Works The way that it works is that you contact a peer-to-peer lending website. You submit an application that says how much you need, your income, and all other pertinent information. Then your information is put on a database so that the lenders can access it. You may have one lender, or you may have several investors that lend the full amount that you need. Then you make payments back into the system, and that money goes back to the investor or investors. There is a fee associated with the loans and that goes to the company that runs the P2P website.  Benefits of Peer-to-Peer Lending One benefit of using a P2P lending site is that there is less overhead. That lower overhead translates into lower rates for you when you are borrowing money from them. If you ever decide to lend money through one of these sites, that lower overhead also means that you are going to get good returns on your money. Another benefit to a lower rate for you is that it’s going to be easier for you to build up your credit if you are just starting out. It can also be a way that you can build your credit back up if you have bad credit.  Drawbacks of Peer-to-Peer Lending There are some drawbacks to P2P lending. One is that the lower your credit rating is, the higher your interest rate is going to be. There is no federal oversight on peer-to-peer loans, so the site and the lender are able to set their own rates.  If you are in need of cash, you may want to check into peer-to-peer lending. It may fit your needs and situation very...

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Understanding SBA Loans

Posted by on Jun 24, 2016 in Uncategorized | Comments Off on Understanding SBA Loans

If you want to start a new business but are worried that you may not qualify for a traditional bank approved loan, then you may be putting off your business aspirations. Many banks will look at your business experience, the business plan, collateral, your credit score, and your overall financial knowledge when deciding whether or not to extend a loan offer to you. If you are lacking in one or more of these criteria categories, then it may be wise to apply for an SBA loan instead.  What Is An SBA Loan?  SBA stands for the U.S. Small Business Association. This association is a part of the government that specifically helps small businesses succeed. The SBA offers programs that help businesses acquire new technology and apply for permits and licenses in a quick manner. The organization also offers assistance to veterans who want to start businesses, and it helps to encourage flexible workplace initiatives. While all or some of these programs may be helpful to you, the most important offering is likely to be an SBA backed loan. The SBA does not give it out financial assistance for loans. However, it does offer federal backing for loans that are given to high-risk small business candidates. This means that banks will be more willing to offer a loan if you are approved for SBA loan backing. The loan is called an SBA loan, but money is borrowed from a bank that may otherwise turn you down for a traditional small business loan. If you fail to pay back the loan, the federal government will pay the money back to the bank. This offers the bank financial security when giving out small business loans.  How Do You Apply For An SBA Loan? You should start the SBA loan process by first contacting either the regional or district SBA office in your area. This will allow you to learn about programs in your state or county that may be right for you. Once you learn about special or general loan programs, you will be provided with a list of financial institutions in your area that offer SBA backed loans. You can call the banks in your area directly as well to see if they offer these loans. Once you find a bank that offers SBA loans, you will need to fill out application paperwork through the bank. Approval for the loan will be based on some of the same factors as a traditional loan. However, the approval criteria will be less stringent. Keep in mind that a strong business plan is essential when it comes to SBA loan approval. You should formulate a three year strategic business plan to show that you have a clear idea of how to build your business and ensure its financial...

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Hedging Against Risk: Portfolio Insurance And Examples Of Passive Income

Posted by on May 16, 2016 in Uncategorized | Comments Off on Hedging Against Risk: Portfolio Insurance And Examples Of Passive Income

Portfolio insurance is a technique that is used by investors when the market has the possibility of becoming volatile. It includes mixing different financial instruments, including debt and equities, in such a way that they balance as much as possible, which helps protect assets and mitigate risk. Passive income in a portfolio is a great method to hedge against risk during a downturn in the market. What is Portfolio Insurance? Portfolio insurance is what investors use to hedge a portfolio of stocks against the risk in a market by short-selling stock index futures. This is a hedging technique that is utilized by institutional investors when the market is uncertain. Portfolio insurance is often considered an aspect of a healthy investment strategy. Using portfolio insurance allows investors to bet on the market increasing while hedging against risk that investments will decrease. Essentially, balancing stocks and options on stocks achieves a portfolio that is free of risk. How Does Portfolio Insurance Help Investments? Portfolio insurance prevents the potential risk of losing out on investment money due to a volatile economy or down market trends. Put options is one way to achieve this. If an investor holds stock and he or she believes it will increase in value, market trends may indicate otherwise. To protect the investment, investors pay another investor for put options, which provide the right to sell some shares should a particular stock reach a pre-determined level. This option provides a way out of an investment to minimize losses while selling stock for a profit. Safeguarding Your Portfolio with Passive Income For a portfolio to be strong and less likely to be harmed by economic crisis, it should include some form of passive income. Examples of passive income include angel investing and commodities investing. There are several steps you can take to strengthen your passive income portfolio. First, diversify your portfolio with a healthy risk of investments. This does not necessarily mean that you must have a wide variety of investment types. While that is ideal, you can protect your wealth by investing in different markets within one market. You should also take steps to mitigate your own risk. While some risk is fine, and even encouraged, you want to be sure that you are not taking on too much. Too much risk could cost you significantly, especially if you aren’t properly diversified. Finally, make sure you are insured. This is separate from portfolio insurance. Instead, you want to have liability insurance in place in the event something happens that can cause you to lose all or part of your wealth. It is important to not forfeit too much money to overpayment, so be sure to work closely with an investment advisor or insurance broker to ensure you have the right amount of coverage for your assets. When it comes to building wealth, portfolio insurance is vital to your investment performance. Hedge against the possibility of economic volatility by balancing your investments against one another. Including passive income in a portfolio is also a great way to keep your portfolio strong. Contact a company like Weyco Community Credit Union for more...

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3 Reasons To Utilize A Mortgage Broker When Looking For A Home Loan

Posted by on Apr 7, 2016 in Uncategorized | Comments Off on 3 Reasons To Utilize A Mortgage Broker When Looking For A Home Loan

One of the more useful services at your disposal when shopping around for a new home loan is a mortgage broker, mostly because he or she will be able to make the hunt for a desirable mortgage much easier for you. Listed below are just a few of the reasons to consider utilizing a mortgage broker. Provide Access To A Large Number Of Lenders One of the biggest reasons to use a mortgage broker is that he or she will be able to shop nationwide for a home loan for you. This is very useful for you because the mortgage broker will be able to send your information to a lot of different lenders that you may not have known about otherwise because they may not advertise as much or have a presence in your area. The fact that the mortgage broker is looking at so many different lenders means that the odds of finding one with the lowest possible rate or that are willing to approve you based on your particular financial situation will improve quite a bit. Sort Through Loan Offers Another reason to use a mortgage broker is that he or she will be able to sift through the many different loan offers that you will receive based on the criteria that you will provide when you first meet with the mortgage broker. This means that you will not have to spend a lot of time reviewing loan offers that have interest rates or monthly payments that are way too high for your comfort level. Instead, the mortgage broker will dispose of those loan offers and only pass on those ones that you would find acceptable or desirable. Set Expectations Finally, you will want to utilize a mortgage broker because he or she will be able to assist you with setting reasonable expectations when it comes to shopping for a loan. For example, a mortgage broker will be able to look at your financial information and the current housing market in order to let you know a realistic range when it comes to interest rates and how much you can expect to be loaned. This is useful because having realistic expectations set means that you can set limits on your loan criteria that are more likely to be met when your broker begins looking for potential lenders for you. Contact a mortgage broker or find a loan officer today in order to discuss the many ways in which he or she can help you find the right loan for you and your family. A mortgage broker can help you by setting realistic loan expectations, sorting through the loan offers to find the most acceptable ones, and providing you with access to a large number of lenders across the...

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How To Sell Your Gold

Posted by on Feb 19, 2016 in Uncategorized | Comments Off on How To Sell Your Gold

If you have gold jewelry or scrap jewelry in your home, you may want to sell it for a profit. It is important that you know who to sell it to and how much it is worth so you don’t get less than what you deserve. Here are some helpful tips for selling your gold. Know What the Gold is Worth Any time you are planning on selling gold, you should start by finding out its value. Don’t just go based on what that gold would be worth if it were new, but actually get an appraisal on the gold. This is important when you have a rare jewelry item, or gold that also has diamonds or gemstones included in it. Otherwise, just regular gold is going to go based on the type of gold and weight. You can determine the value by first finding out the type of gold, such as 14k or 22k. Next, you will need to weigh it with a digital scale. Compare the weight of it to current gold values to figure out what it should be worth. Decide On the Method of Selling the Gold Once you know what type of gold you have and what it is worth, you need to decide how to sell it and who you want to sell it to. You have many different options available, from local buyers to online ones. The benefit of online gold buyers is that they are plentiful and you can find a gold buyer that purchases any type of gold. However, local buyers are good to deal with since they will look at your gold upfront and provide you with a realistic quote based on their initial assessment. Either way you go, make sure you research the gold buyers thoroughly before choosing one. Also know the difference between a gold dealer and a pawn shop, as the amount you get for your gold will be much different. Avoid Taking the First Offer Unless you are sure your first offer is fair compared to the value of your gold, it is a good idea to get multiple offers and compare them. There may be a dealer who is looking for the exact type of cable necklace you have and is more than willing to pay a little more than the other dealers. Even online dealers will offer fair offers and are willing to send payment, along with easy instructions for sending the gold to them, after agreeing to the transaction. To get cash for gold, contact a company such as Executive Loan...

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What Should Mortgage Seekers Do If The Federal Reserve Raises Lending Rates?

Posted by on Jan 12, 2016 in Uncategorized | Comments Off on What Should Mortgage Seekers Do If The Federal Reserve Raises Lending Rates?

So you are in the process of buying a house, but suddenly you hear that the Federal Reserve is going to raise interest rates? What should you do? What Causes Mortgage Rates to Increase? Before panicking, look at what actually drives mortgage rate increases. The majority of mortgages are fixed-rate mortgages, for fifteen or thirty years. Adjustable rate mortgages are a different animal and fluctuate based upon the market rates, so those don’t apply as much to this discussion. The Federal Reserve adjusts the federal funds rate, which is the rate that banks charge each other when they loan money between banks. Changes to this rate have a far greater effect on short-term loans, such as auto loans, than on long-term loans. 15-year, fixed rate mortgages are actually based upon the yield of 10-year Treasury notes, not the federal funds rate. Other factors have more influence on changing mortgage rates than the federal funds rate such as: Steady job growth: this creates stability in the lending market, as lenders with good job history are expected to be able to pay their mortgages U.S. economic growth: if the economy is growing, then lenders expect more people to have jobs and be seeking to purchase houses, leading to competitive mortgage rates Economic inflation: the Federal Reserve adjusts rates to respond to an expected rise or fall in inflation. As inflation rises, mortgage rates rise. Treasury bonds: 10-year Treasury bonds are closely linked to 15-year mortgages. As Treasury bond yields increase, so do 15-year mortgage rates What Should You Do? The easiest answer is that you shouldn’t do anything you aren’t already doing while you look for a house. Mortgage interest rates are much more closely tied to larger, macro-economic forces, not the movement of the Federal Reserve. An expected rate hike should not make you hastily seek a house to buy or stop looking for a house. If you like the rates that you are seeing now, you can lock your interest rate early once you are qualified for a loan. This only works if you have decided upon a house already, since you can’t lock a rate without knowing the purchase price. The interest rate you can lock is dependent upon how many days you need to hold that interest rate. You need to determine how long it will take you to close on a house and then request a loan lock that is a bit longer than that period. There are costs associated with locking a loan rate early. To hedge risk, lenders may charge fees or offer slightly higher rates to lock the loan early. These fees and rates are higher the longer the lock period. The most important thing to do is to remain calm. Small moves in the federal funds rate have small impact on fixed year mortgage rates. Even if they do go up, you may not be looking at much more per month with the higher...

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