Mark Nikolos asked:

 

Being a student you always feel the need for a vehicle. It might be to make commuting easier or due to peer pressure. There are plenty of reasons for a student to need a car but then parents have their own reasons to refuse a car. With parents refusal it becomes difficult for you as a student to get a car. You have no earnings and even if you have, you can’t buy a car using that. Just to make your dreams a reality, the auto loans for students are offered. This loan allows students to buy a car of their choice either used or new.

 

The loan provides the total amount to be paid for the car. Auto loans for students may be secured or unsecured loans as per your wish. For auto loans secured, you might have to pledge your car as a security. In case of the unsecured loans you wont need to pledge any security. The interest rate might differ for the secured and unsecured loans. You might have to fulfill certain criteria to get this loan. You might have to have a good credit to lower the interest rate or else the lender might charge a high interest rate.

Make sure you do your homework well regarding the lender. You must have a good comparison chart prepared on the lenders you have searched for auto loans and from this comparison chart should choose the one suited to you. There are many lenders in the market, many banks and financial institutions offering this loan. So it is not a major deal to search for the one with low interest rates. You can even try negotiating with them over your interest rates. Work out well before applying as you will have to repay this money from your own pocket in the near future.

peer to peer lending

Lisa Phillips asked:


The recent credit crunch has caused banks and other traditional lenders to tighten their underwriting standards. Financing for start-up and small businesses has become more difficult to obtain. Now, more than ever, entrepreneurs have to be a little creative in seeking financing. If you are a business seeking financing here are few sources that may aid you in your search.

Angel Investor

Angel investors look to invest in businesses that return a higher profit than a traditional investment. Many angel investors are successful entrepreneurs who want to help other entrepreneurs get their business off the ground. Angel investors look for businesses which can successfully compete in an industry. Angel investors usually come at the stage of a business where some funding has been obtained but the business needs a significant amount more to get to the next level. Financing from an angel investor is usually expensive with costs ranging from 10 to 50 percent of a company’s equity.

SBA

The SBA assists in obtaining a loan by guaranteeing the loan you get from a bank. Many banks have SBA loan centers and the process may even be streamlined where you do not have to wait long for an answer. The SBA is not a direct lender. Banks are willing to fund the business because the SBA backs the loan in case of default. The SBA guarantees up to 85% of a loan, depending on the size, type and maturity of the loan. There are several different types of SBA loan programs available.

Community Express Loans

Community Express is administered through the SBA loan program and is available at various selected lenders. This loan program is for pre-designated geographic areas serving mostly low and moderate income individuals and start-up small businesses. The program also includes technical and management assistance. This assistance is designed to help increase the chances of success for the small business.

Micro Business Loans

This loan program provides small loans to start-up, home-based and micro-businesses. Entrepreneurs with less than perfect credit needing to start or expand a business may benefit from a micro loan program. The loan does not come directly from the SBA. The SBA provides low-cost loans and grants to intermediaries such as community economic development centers which redistribute the funds to qualified small businesses in the form of micro business loans. You can borrow as little as $1,000 up to $35,000 and loans must be repaid within six years.

Patriot Express Business Loan

The SBA has launched a new loan program for military service members, veterans and their spouses called the Patriot Express Loan Initiative. The Patriot Express Loan builds on the more than $1 billion in loans the SBA guarantees annually for veteran-owned businesses. The loan can be used to establish or expand a small business and the maximum loan amount is $500,000.

Social Lending

Peer to peer lending is not only for personal loans but can also be used for business loans. This type of lending matches borrowers directly with lenders, circumventing the banks. It is a great alternative to traditional banks’ stringent business loan requirements. With peer to peer lending, a typical loan could be funded by as many as 100 people, thereby increasing the chances your loan will get funded. www.Prosper.com and www.globefunder.com are peer to peer lending sites which also offer business loans.

Friends and Family

Not surprisingly, more than 50% of all start-up costs for new entrepreneurs come from friends and family. America thrives on entrepreneurship and friends and family are a big source for start-up costs. If your credit is weak you may have little alternative but to seek a loan from a friend or family member. This form of lending has so evolved that there is now a website which will help you facilitate a loan between friends and family. www.virginmoneyus.com will provide formal loan documents between friends and family.

More resources can be found at: Business Loan Sources



peer to peer lending

Joseph Lizio asked:


It time again to revisit alternative financing strategies for business owners needing money.  Whether your business needs capital to grow, meet payroll, or to just simply survive, there are numerous alternatives for your company when banks so ‘NO’.

Personal loans are no longer viable options for business owners.  Banks have tightened their purse strings on personal credit just as they have with business credit.  This tightening typically does not have anything to do with the state of your credit or the value of your collateral.  But more reflects their past indiscretions with their depositors’ money.  Further, most business owners, over the last two or three years, have already encumbered all of their personal assets, leaving nothing of value to collateralize.

The following lists many alternatives that may still be available to your business.  These alternatives allow business owners to capitalize on their previous hard work; be it from building relationships with suppliers and other business partners to closing sales and building a strong customer base:

Using Your Business Relationships!

Trade Credit:  It never hurts to work with your suppliers.  Ask for better terms; either more discounts or longer time for payment.  Here you can reduce your overall costs or allow more time to collect money from your customer before payment is due to these suppliers.  Now, your suppliers may baulk at this discussion as they are probably feeling the same pinch as you are.  However, impress upon them that it does their business no good (short term or long-term) if you go out of business, have to cut back your standard orders, or are forced to find other suppliers who offer better terms.

In conjunction with trade credit, do all that you can to collect your receivables from your customers, as soon as possible.  If your suppliers offer you discounts for early payment, offer the same to your customers (just maybe not at the same magnitude) or offer discounts for cash.  This allows you to collect payments faster as well as reduce you costs by paying less for the goods you need to run your business.  Just remember, in this type of economy, cash is king.

Using The Strength of Your Customers!

Receivables and/or Purchase Orders:  If your business has accounts receivables sitting on its book just waiting to be collected, you maybe able to get cash for those assets NOW.  There are cash advance companies (not banks) that specialize in purchasing your receivables.  Companies like Bridgeport Capital Service, RTS Financial Services, or Paragon Financial Group.  These companies will purchase your invoices for up to 90% of their amount.  They will then work with your customers to collect these receivables (saving you both time and money on collection).  When the invoices are paid, these companies will refund to you the remaining 10% of the invoice amount.  This type of funding is great for struggling companies as these cash advance businesses will focus more on your customers’ credit and business strengths than your.

Many of these same companies will also finance your purchase orders.  If you place an order with your suppliers and agree to pay for their goods over time, these cash advance companies will finance these agreements.  This could allow your business the opportunity to take advantage of trade discounts (percentages off the purchase amount) as your company will have immediate cash to satisfy your supplier.  This is very similar to having a line of credit with your bank but as an individual credit facility for each purchase.

Credit Cards:  I not saying go out and get more credit cards.  If your business accepts credit cards, there are companies (again, not banks) that may advance cash to your company based on your FUTURE credit card receipts.  These facilities are only paid back when your business generates credit card sales.  Thus, if you have a slow month, you are not stuck with a huge monthly loan payment.  As your credit card sales ebb and flow, your repayment of these advances will ebb and flow in tandem.

Using Your Character!

Need just a small amount of cash to get you by?  Try social lending sites like All World Private Funding!, Zopa, Prosper, or Lending Club.  These sites create peer-to-peer lending in which ordinary people, who have additional cash, can review your request and contribute to the funding of your loan.  The benefits of these programs include getting the money you need, possible lower rates and better terms than most banks offer, and you get to tell your story directly to the lenders.

Similarly, there is Micro-Credit companies.  The largest in the US and around the world is ACCION USA.  Micro-finance companies limit their total out lay to a maximum of $25,000 per loan.  However, most micro-credit funders like to build relationships first with their borrowers.  Thus, they may only approve smaller amounts in the beginning and increase your loan amount as you pay back each facility.  These companies will also work with startup firms or those that have been turned down by traditional banks and other financial institutions.

Never forget your friends and family.  These are the people who know you best and may better understand what you are trying to do with your business.  There are many cons with borrowing money from those closest to you but new companies like Virgin Money will help you manage this new relationship.  Companies like Virgin will help you keep everything in a business like manner. 

Now, while there is a lot of focus these days on traditional banks, most communities also have Credit Unions.  Credit Unions are not-for-profit organizations.  Thus, they do not have to worry about Wall Street or shareholders.  While the majority of Credit Unions have yet to fully adopt commercial lending departments, they should have lending programs in place that will meet your business needs.

Some of these alternative options maybe a little more expensive, overall, then having a single credit facility with a bank.  But, they are a sure fire way of leading your company through our current credit drought.  The key to success is to do your homework.  Find the program that best fits your needs and that will provide the greatest benefit at the lowest cost to your business.  Some business owners tend to panic a bit when they begin to feel the credit pinch.  It is only natural as raising money for your business is time consuming, time that can hardly be spared in these trying times.  But, remember to think about the long term.  Don’t just settle on the first source that gets approved, find the best fore you.  Be diligent!



p2p lending

Jim asked:


A little over 5 years ago, I remember making a trip out to Brooklyn Polytech Institute to offer faculty and staff there a free credit and debt counseling seminar.  At that time, I was representing a public non-profit consumer credit counseling agency I co-founded back in 1996, and these free seminars were a significant part of maintaining compliance with the IRS.  They were free to all attendees, and free to the organization, agency or company hosting.   Back in 02 and 03, consumer credit counseling was under increased scrutiny and growing suspicion due in large part to the bankruptcy filing of Ameridebt, the nation’s largest consumer credit counseling agency.  Ameridebt had been caught mismanaging funds and misrepresenting themselves to the public, calling all non profit credit counseling into question.  As time went on, more agencies were coming under investigation for funneling profits to for-profit entities and misrepresenting their services to the public. As a 34yr old, still holding on to his last shreds of idealism, I remember thinking aloud on that September day I took the R train out to Brooklyn that “nothing was sacred anymore,… nothing.”

 

As a small non profit who couldn’t afford mass advertising on TV or radio, we had availed ourselves to speaking engagements and word of mouth referrals as far back as the late 1990’s, as our primary source of advertising.   The seminar route was nothing new to us.  Since the late nineties we had spoken for free to Church groups and urban development leagues throughout the five boroughs.  And by 2002 and 2003, we had extended ourselves to various EAP programs throughout the city of New York in hopes of building a client base and possibly educating a few people as to the inherent dangers of credit card debt, predatory lending and how to properly manage money for unconventional real estate purchases. 

 

As usual, I was armed with an arsenal of educational information from the American Center for Credit Information, HUD, and Fannie Mae.  The load included several little workbooks designed to assist potential first time homebuyers in decision making.  I think one title, “Knowing When the Time is Right for You,” read like a teenage dating guide.  The others, like the “Basics of Budgeting,” and “Money in Motion” also had their distinctly perverse dummied up definitions of fundamental money terminology.  But that’s not to say they were devoid of any worthy educational merit. I knew however, drawing on previous experience that the majority, if not all, of these books would never see the light of day.  What most people turned up to these seminars for was to learn the secrets of credit repair using the form-letter dispute format.  They also came to heat about the legally enforceable statute of limitation on bad debts, or advice on expunging an unpaid judgment.  Based on free follow up telephone counseling I’d extend to seminar attendees, I’m confident in saying that money management technique or the consequences of misunderstanding a balloon payment or adjustable rate sub prime loan were very low on the totem pole when it came to the substance of these seminars. 

 

To me, this seminar would be yet another bad example that preaching the dangers of predatory lending practices and sub-prime loans was a complete and utter waste of time.  All people wanted to hear about was how to navigate the shortcomings in the credit scoring and reporting system so they too could get a mortgage.  After all, everybody was doing it.  Mortgages were the latest fad, or addiction, depending how one looked at them.  Personally though, I was growing increasingly pissed off over the latest hypocrisy surrounding the credit and debt counseling ‘industry’ where as our beneficiaries, commercial banks and credit card companies, stipulated that our funding would be strictly contingent on our educational merit to the communities in which we serve, and not on how much money we were returning to them through our consolidation programs.  This declaration still stands out as one of the most outstanding lies I have ever heard in my life as all credit counseling and credit education was now done over the telephone and the internet.  Seminars had been replaced by chat rooms and streaming video.  And counseling now consisted of one 20 minute conversation with a certified credit counselor over the telephone who was more interested in enrolling you into a debt consolidation plan than providing any worthy information pertaining to budgeting and money management. 

 

My agency’s face to face method of counseling and education were dead and gone.  Banks and credit card companies are just as reliable as any profit driven company when it comes to putting up the facade of social responsibility.  It’s just good business, I suppose.  They really didn’t want us out there standing on ceremony preaching the inherent dangers of their products too vociferously.  And they didn’t want us out in the community blatantly undermining the subprime marketplace because of the money to be made there.  After all, as one beleaguered mortgage broker put it to me after I had warned a contingent of 300 first time homebuyers about obtaining subprime loans – “who are you to trash these people’s dreams.”  Good question I thought – who was I?

 

The best I could hope to gain on this particular day in Brooklyn, was a letter, on BPI letterhead, from the Director of the EAP program verifying my appearance on the spot.  Typically I’d wait months for such a letter, and sometimes they never came at all.  But, we still needed to show up to keep the powers that be off our backs.  It also meant yet another day away from my office not addressing the backlog of debt management proposals I needed to send to numerous credit card companies on behalf of an ever growing number of ordinary people who had fallen victim to the old American virtue of buy now and pay later.  They were ordinary people who were extended far too much credit given their annual incomes.  Ordinary people who never really learned the basics of budgeting.  Ordinary people who always believed that ‘next year will be my break out year.’  They were ordinary people who now had to pay up.   

 

It was also around this time 5 years ago where I first starting hearing the term “sub-prime mortgage” on a fairly regular basis.  I’d heard it in passing years before but the term was reserved for individuals whose credit scores were too far gone for anything conventional in the mortgage market.  Previously, sub-prime was synonymous with hard-money loans.   Suddenly, it had a newer significance as the sub-prime market, now backed by more conventional deposit institutions, was bustling in full swing, driving some mortgage specialists and lenders into a frenzy with the sea of money to be made off of extending these difficult loans to individuals with already compromised credit.  I also remember thinking to myself in no uncertain terms, one day this will cause some real problems. 

 

On numerous occasions, far too many to recall, I’d had the conversation with my dedicated, but tired business partner about the day when everyone would have to abruptly stop and entirely re-evaluate their ideals, attitudes and most importantly behavior when it came to borrowing money.  Our conversations often left us both in complete disbelief at the shortsightedness of not just of the banking community, but also of the human condition itself.  Still wrapped in the hope that one day justice would prevail, we’d remark at great length about the thoughtlessness that overtook people when the chance to make a quick buck came into play.  It appeared so academic to us that sooner or later everyone would feel a swift and severe backlash from the fury of subprime loans, and, yet again, it would be left to the innocent to clean up the mess.  To what extent the average, everyday American would be footing the bill on this, we hadn’t a clue.  We suspected however, it would be far worse than anything we had witnessed in previous years.

 

Something remotely similar did come to mind with the demise of the dot-com industry in the late nineties that culminated with the market crash back in 01.  Business in the credit and debt counseling industry did experience a sharp increase in the fall of 01 and winter of 02 as it seemed thousands of people lost jobs in New York City seemingly overnight.  Suddenly, a whole new type of debtor appeared.  One who had never been in such a position where credit cards were now used as a means of survival, rather than a convenient type of payment alternative.  A number of people we tried to assist back then with debt management plans and monthly budgets defaulted on their repayment plans.  Many declared insolvency with a chapter 7 bankruptcy as entire debts could be expunged at that time.  And par usual, the losses were simply passed on down to the timely cardholder in the form of a fee or a rate increase of some sort.

 

Our premature prediction of the subprime meltdown however, presented an entirely different kind of crisis both in scope and kind.  This would be unprecedented financial devastation and upheaval on a large scale basis.  Markets would be vulnerable to collapse around the globe.  Financial institutions, even some of the most reputable and storied, would disintegrate in an instant.  Jobs would be lost.  Retirement packages would evaporate.  People’s entire life savings would go right down the tubes.  Full on financial Armageddon would be at hand.  Back in 03 and 04, I was accused, more than once, of being overdramatic.

 

I started to become somewhat of a zealot on the subject and often had many of my family members, friends, and peers at odds with me.  Many of them would patiently watch me go off on one of my animated tangents about how one day we would all have to face this beast and it wasn’t going to be pretty, I’d stammer.  In retrospect, I believe that many of these little rants or furies were also rooted in the resentment I harbored towards the credit and debt counseling industry.  It’s true.  I hated my own.  By 2004, many of the nation’s largest consumer credit counseling agencies had their non-profit status revoked for mismanagement of their trust accounts and their ties to for profit businesses.  They had succeeded brilliantly in destroying the distinction and legitimacy I had worked so hard to achieve and refine.  I had in fact, established the only New York State Licensed, COA Accredited public non profit ever.  I worked my ass off for 8 years to achieve this merit, and I never cut corners, took favors or pocketed a single dime that didn’t belong to me.   In short, I guess I was pissed because the same greed had now penetrated my own industry exposing the hypocrisy.  But, that still didn’t mean I was wrong about what was to come.  A little insane and consumed, yes.  But wrong? 

 

   I started to watch the stock markets and lending rate fluctuations in an obsessive manner thinking that the dominos were about to start to falling any day now.  At some point, I began losing weight and sleep as the banks continued with their funding cuts and my job was now in eminent peril.  If we didn’t have a proposed merger in the works with a larger independent agency, I’d have been in receivership myself back in 2004.  Just getting a non profit credit counseling agency up to speck can set one back tens, if not hundreds, of thousands.  No mind, I figured our services would be in such demand once the rash of foreclosures came about, benefactors would be throwing money at us in order to assist in maintaining economic equilibrium.

 

But, the sub-prime lending brigade marched on seeming to only to gain momentum throughout 2005, and part of 06 as well.  Couldn’t anyone else see this for what it was?  I’d hear stories from friends about mortgage brokers who’d advise them to walk on all of their credit card debt and use the money for repayment as a down payment on a piece of property.  “Sod your cards with FUSA and MBNA, I can still get you a loan in spite of your paying history,” one of my friends was told.  And the initial rate could be refinanced in 12-24 months the pitch went on to say.  “At least you’ll own something that you can sell.”  How American I thought.

 

For whatever reason, maybe the impending doom of the inevitable crash or my own personal insolvency, I started feeling a sense of urgency with my work, especially when it came to educating the public.  I took any venue provided to voice my hostility towards what was happening.  Even students at my ‘understanding and managing your credit and debt’ class at the learning annex didn’t escape my rants.   Funding for the agency continued to decline considerably until it was almost abolished entirely save for a few loyal but insignificant patrons   In part this was due to maximizing quarterly returns for the banks that funded us, but mostly, I believe it was about snuffing out any voice that was out there preaching the evils of sub-prime lending.  The banks loved the fact that we used to assist them in collection efforts, acting as a friendly alternative to traditional collection practices offering budgeting and sound financial advice, but they clearly didn’t want us out there warning people about the dangers their products. 

 

Sadly though for me, as 2005 began to wane and merger talks with my agency were disintegrating, I began to feel my own mortality as a credit counselor more than ever.  Funding had been stripped to basic operating expenses, leaving little or no room for salary.  The work I once deemed so esteem able and necessary was worth literally nothing to anyone.  Here I was on the verge of my 37 birthday, looking back on my last 9 years of work with nothing to show personally.  No wife and kids.  I’d sacrificed that life for my cause years before.  No money stashed away as everything I ever made went back into the agency.  I was as broke as many of my clients were.  And, no real transferable job skills.  The last two years searching for work has been an exercise in futility as far as work in commercial banking or finance. 

 

I’ve tried to salvage some good I may have done.  And I suppose on some level, I did.  Every now and then I’d get a card from a former client or seminar attendee or student who had my class telling me that something I said had helped them in getting their personal finances back in order.  But I can’t shake that nagging feeling that I was never really allowed enough time or opportunity to vocalize my opinions, and coordinate real change in the form of appropriate regulation.  For if I had, perhaps none of this imminent peril would be upon us.  But then again, who was I too think I could have made any real difference anyway.  I was just a kid playing businessman in lower Manhattan.  At my agency, we’d never had any real money behind us but we were constantly challenging some of the biggest banks in the world to a public fistfight.  We’d go on record with anyone who’d listen to us about the impending disaster.  In retrospect, I was screaming at the top of my lungs for people to take notice of the sub prime credit catastrophe that would one day render us financially impotent, but no one really wanted to hear that in a time of pseudo-prosperity and growth.  “Get back in your box, creditman.  We’ll call if we need you to clean up the mess.”  Only problem now is the mess is at hand and I’m long gone…….

 

 



p2p lending

Philip Cohen asked:


Acquiring financing for a company is tough when the economy is doing well and close to impossible when the economy is suffering. This is especially true when considering traditional borrowing avenues such as bank financing. Compounded with the fact that the present time is considered the worst economic credit crisis since the Great Depression and the chances of business owner locating money for his/her growing company is slim-to-none. Or is it? Needless to say, entrepreneurs need to take a more creative approach when it comes to securing business financing during these bad economic times. This article will help jump-start the process, sharing information about three alternative cash flow sources worth considering in these cash-strapped times.

Banking with Family and Friends

Although it might have an unconventional connotation, borrowing from friends and family has helped well-known companies fund their growth. Richard Branson borrowed money from his aunt when he founded Virgin Records. Sam Walton, used a $20,000 loan from his father-in-law to start Wal-Mart, and Ahmet Ertgeun borrowed $10,000 from his family dentist to help him launch Atlantic Records. 

Unlike borrowing from a bank, friends and family may offer lower interest rates, more flexible terms and a much simpler approval process. The lending criteria are mostly based on the personal relationship the lender has with the borrower. With that said, experts warn that it’s important to treat the loan arrangement in a professional manner to avoid damaging personal relationships. This means, much like a business owner would explain his/her borrowing intentions to a bank or an investor, it’s very beneficial for the business owner to put together a short presentation for family and friends. Even if friends and family aren’t interested in the same nitty-gritty details as professional investors, giving them the basics (goals, potential risks and a repayment plan) will squash any investing worries they might have.

Once a family member or friend has agreed to front money for a business venture, experts suggest drawing up the loan’s terms and its repayment plan to avoid potential problems on down the road. Of course, once the formal documents have been created and agreed upon, business owners should stick to the terms indicated within the documents. In the event that the business is unable to make a payment, it’s important to communicate this situation with the party who loaned the money. Because it’s a family member or a long-time friend who loaned the money, he/she might be more forgiving than a traditional bank; therefore, they might be able to work around the cash flow difficulties.

Peer-to-Peer Lending

Similar to borrowing from friends and family, peer-to-peer lending is exactly what it sounds like—people lending other people money. Categorized in the same tier as borrowing from friends and family, peer-to-peer lending is a much more structured financing relationship, because it provides a buffer between the borrower and the lender. Formalizing the process helps create distance between emotions and the business in need, easing what can sometimes be a tense situation for both parties involved. The loan process usually starts in an online social networking site. For example, the owner of a medical transcription service would create a borrower profile, upload a photo, list a requested loan amount and add specific details for why he/she needs the loan. Lenders have the ability to peruse the borrower profiles and select someone to assist. It’s important for business owners to note that some peer-lending sites will not accept borrowers with less-than perfect credit, and other sites have a borrower-rating system in place to help prospective lenders assess the risk involved. Once a lender has chosen a borrower, the website handles the formalities of the arrangement.

Borrowers are asked to provide personal information similar to what a bank would need when signing a loan. Contracts are then drawn up, exchanged and signed. If the borrower is unable to pay back the loan according to the agreed upon terms, he/she will be sent to a collections agency and reported to a credit bureau. 

There are a number of websites dedicated to peer-to-peer lending, most notably Prosper, Lending Club and Virgin Money.

Exchanging Invoices for Cash

If an entrepreneur doesn’t want the hassle of paying back a loan and muddying up his/her balance sheet in the process, there is one more alternative financing option to consider — accounts receivable factoring. Selling invoices to a factoring firm is a very common, yet understated way of keeping a company’s cash flow going throughout an economic downturn.

As opposed to accepting a loan from a bank, a family member or a peer, accounts receivable financing is not a loan at all. In this type of funding arrangement, the factoring firm purchases the rights to an invoice, advances cash immediately on that invoice and then collects on it. Credit decisions are based on the creditworthiness of the company’s customers rather than the business itself, allowing the factor to leverage the higher quality of their customers’ credit in securing funds. In addition, many factoring companies are willing to work with start-up companies, as well as those who are in a rapid growth phase. Many factoring firms are also willing to fund receivables without requiring a personal guarantee of the business owner, allowing the owner to protect his/her personal assets. Accounts receivable factoring agreements also generally provide generous lines of credit because factors are able to increase their funding as their clients’ businesses grow.

For example, let’s say that a company provided services to a doctor’s office and then billed the physician for those services. Also affected by the current economic conditions, the physician tells the business owner that he is not able to pay the bill until next month. If the business owner is working with a factoring company, he/she can sell the invoice to the factor and receive the majority of his/her funds right away. The factor charges a fee for the aged invoice once it receives full payment, releasing the difference back to the company’s owner. As a result, factoring allows the entrepreneur to continue its basic business operations as usual while also maintaining a good vendor-relationship with the physician.

Factoring firms come in all different shapes and sizes, and they are spread out all over the world, and each offers their own twist to the invoice funding model. Therefore, it’s important for entrepreneurs to take the time to research factoring companies and select the best one to meet their company’s financing needs. Some more pertinent qualities to consider when choosing a factoring company is to find one who is a member of the International Factoring Association. The IFA, understands the uniqueness of your business and offers flexibility with its funding.

In a time when more and more banks are saying “no,” business owners can and should take advantage of some or all of the alternative financing options shared within this article. When researching any kind of funding source, it’s important for business owners to remain professional and be upfront about his/her company’s financial needs and goals in order to secure the best funding solution for his/her company.



peer to peer lending

Joseph Lizio asked:


See a new opportunity for your business?  Need to make payroll?  Want to pay down your personal debt? Need new equipment?  Need to build your inventory?  Need to complete a new order? Need to hire?

So, you run down to the bank only to hear the same old things:

You’re not profitable enough!

You haven’t been in business long enough!

Your credit is below our minimum!

You don’t have enough collateral!

What ever the reason, you still cannot get the money you need.

Well, there are other ways – regardless of your credit, time in business, profits, or collateral – by leveraging your past sales.

Asset Based Lending:  Business can still get financing their accounts receivables.  This is where non-bank, finance companies will advance funds up to 90% for accounts receivables (the reminder is paid when the A/R is collected) less a small discount fee usually between 1% to 5%. 

Why wait 30 days or more to get paid – your suppliers and employees won’t wait 30 days.  Factor your receivable and get your cash now.

OR, got a big job to complete but no money to do so, factor your purchase orders – get up to 100% for your purchase orders so that you can purchase inventory, hire additional labor, or whatever it takes to complete the job.  Thus, you satisfy your customer (which is always a good thing) and realize your margins (profits).

The best things about Asset Based Financing are that they are not based on your credit but the credit of your customers.  If their credit is subpar, you should not be doing business with them in the first place.  They are based on assets that you already have so you don’t have to worry about earning more business to satisfy a fixed monthly payment, and you only have to repay these facilities when you get paid.

Further, in some instances, you can receive a line of credit facility based on your receivables.  These do require a bit of underwriting, fair to good credit on your part, and a term commitment – usually around 12 months.  But, these lines of credit are still much easier to get than traditional bank credit.  Why listen to ‘no’ when you can hear ‘YES.’

Business Cash Advances:  You have worked hard and built your business.  You have gotten the customers to buy.  But, you still need some cash for growth.  If you take credit cards as a form of payment, think about a business cash advance.  These advances are based on your Future credit card sales.  They do not require regular monthly payments as bank loans do and are paid back from your future credit card sales.  Like asset based funding, advances can be used for any purpose – business or personal, and are available to start-up businesses (in operation under one year) as well.

Don’t take credit cards or don’t have purchase orders or accounts receivables, there are other sources.  These sources typically do require some minimum level of credit – but, usually no where as high as banks and other traditional finance companies.  But, these do not usually require collateral, time in business, or profits.

Get an unsecured loans or line of credit from America One Funding.

Or, Get money from your peers – Peer-To-Peer lending networks are popping up all over the place.  Try companies like - All World Private Funding! OR - Prosper.com

Here you submit your loan proposal to normal, regular people.  These individuals review your proposal and bid on your loan.  When you receive enough bids on your proposal, you get funded.  Get the money you need usually at lower rates than bank debt.

Cost:  The concern always comes up that these types of advances and loans are far too expensive when compared to bank interest rates.  These types of non-bank facilities do not charge up-front fees, maintained fees, reporting fees, or require you to take time away from growing your business to provide financials, satisfy covenants, or explain why you should continue to get their bank debt.  Moreover, want is the cost to your business if you don’t get the funds to complete projects, pay suppliers, meet payroll, buy inventory, or grow your business?

You have built the business, so why are you suffering.  Get the money you need NOW!



p2p banking

Amy Grace Remollata asked:


Borrowing from banks is every small entrepreneur’s nightmare. One gets turned down for bank loans for a variety of reasons, including lack of assets, collateral and business experience. Don’t despair, however. There are several common types of alternative sources of capital for setting up a business available to young companies.

Savings and Investments

The first source you should consider is your own savings and investments. One disadvantage though of self-financing is that if things did not turn out the way you want them to be it will be your money that goes down with the ship.

Angel Investors

Angel investors are affluent individuals who provide capital for a business start-up, usually in exchange for ownership equity. These individuals are looking for a higher rate of return than would be given by more traditional investments (typically 25% or more).

Angel investors are an excellent source of early stage financing and high-growth start-ups. They are often willing to tread where there is too much risk for banks and not enough profit potential for venture capitalists. And since angel investors are often retired business owners and executives, they can also provide valuable management advice and important contacts.

Peer to Peer Lending

Peer-to-peer lending is a means by which borrowers and lenders may transact business without the traditional intermediaries, such as banks. It can also be known as social Lending, ordinary people lending money. The process may include other intermediaries who package and resell the loans–examples are Prosper.com and Zopa-but the loans are ultimately sold to individuals or pools of individuals. Prosper.com, which is available in the US only, offers business loans for small companies.

An enabling technology for peer-to-peer lending has been the internet, which connects borrowers with lenders, for example through an auction-like process in which the lender willing to provide the lowest interest rate “wins” the borrower’s loan. (wikipedia.com)

Money pool

Instead of a bank loan, borrow smaller sums from several family members, friends, or colleagues. The lenders have no legal ownership in the business, but can act as advisors and cheerleaders for your venture. Remember though that nothing causes tension in a family like lending money that is never paid back.

Credit Cards

Many business owners use their credit cards to fund their businesses. Credit cards offer the ability to make purchases or obtain cash advances and pay them at a later time. But as a long-term financing method, they can be expensive. Most credit cards will charge you 2% to 4% of the face value of a cash advance as a “fee” making this method of financing very risky.

Bootstrapping

Another source of capital for setting up a business is bootstrapping. It is a way to finance a business by saving rather than borrowing money. It’s being as frugal as possible so your business can be started on as little cash as possible.

The use of private credit cards is the most known form of bootstrapping, but a wide variety of methods are available for entrepreneurs. Other forms of bootstrapping include owner financing, minimization of accounts receivable, joint utilization, delaying payment, minimizing inventory and subsidy finance.

While bootstrapping involves a risk for the founders, the absence of any other stakeholder gives the founders more freedom to develop the company. Many successful companies including Dell Computers were founded this way.

Venture Capital

Venture capital is not suitable for all entrepreneurs. It is an option for small companies that have a seasoned management team and very aggressive growth plans; however, venture capitalists will rarely invest in small businesses that have no intention of going public. If a company does have the qualities venture capitalists seek such as a solid business plan, a good management team, investment and passion from the founders, a good potential to exit the investment before the end of their funding cycle, and target minimum returns in excess of 40% per year, it will find it easier to raise venture capital.

The venture capitalist objective is to invest in a company for a short period of time – say 5 years – and then cash out of the business while making a significant return on their investment.



p2p banking

Christin Shire asked:


For a couple of reasons, the vast majority of drug and alcohol rehabs offer peer group support therapy. Clinical studies have shown that it works about as well as individual therapy towards relapse avoidance and continuing abstinence, and it’s also popular as since a single professional can lead a group of ten or more participants, group therapy allows for a more intensive therapeutic experience from a limited number of professionals.

You don’t necessarily want a drug rehab that offers group therapy at the expense of individual therapy, but one that offers group in a complimentary fashion. Because of the potential for costs savings, certain lesser quality rehabs may attempt to minimize the intensity of individual therapy with more group sessions, and this is surely not done out of the best interests of the addict in recovery; but there are also rehabs that out of a certain philosophy of treatment minimize the use of group support therapy.

Group therapy works very well, and it helps in recovery in four distinct ways. You should not consider a drug or alcohol rehab that does not include some degree of therapeutic support group programming.

The four primary benefits of group therapy in drug rehab

Inspiration

During the sometimes dark days of initial sobriety, the enormity of the task ahead threatens to overwhelm the otherwise good intentions of an addict new to recovery. Watching, sharing with and learning from other recovering addicts going through similar turmoil can lend strength and even strategies to success. Nothing gives greater inspiration towards success than watching someone else you know to be having a really tough time get past an addiction, and start enjoying a life of sobriety.

If they can do it, so can you.

No Denial

Addicts by necessity become incredibly adept at the strategies of denial; even to themselves. Denials of the extent of the problem or of the implications of actions get dissected in a group meeting, and because the other recovering addicts have the authority of a shared experience, you can’t get much personal dishonesty past them. Peers recovering together can help all to avoid the pitfalls of delusional thinking, and recognize it even when no one else will.

No Loneliness

A lack of sober support and few sober friends can provoke relapse during the initial weeks and months of sobriety. Which can be problematic, as many of us are asked to abandon old friends still using out of a fear of temptation. The first period of relapse can be lonely, and feeling lonely always leads to temptation, to cravings, and too often, to relapse.

At group therapy, all must contribute and share, and through this honest discussion and dialogue, great and authentic sober friendships are born. Group support friendships support even outside of therapy meetings.

Since everyone must share at some level their experiences and emotions, even the shyest of recovering addicts are given an outlet for their frustrations and fears, and this outlet can make all the difference,

Intensive therapy

It would be logistically impossible for a drug or alcohol rehab to offer the same intensity of individual or other therapy to all recovering addicts as they can offer group support therapy. You should get hours of group therapy a day; hours more than you would get were group therapy not offered.

No one form of therapy works well for all addicts in recovery, but group therapy has proven about as effective as any other form, and since there are some serious advantages to its usage, you should not consider a drug or alcohol rehab that does not boast quality group therapy as a part of more comprehensive programming.



peer to peer lending

Eric Binkley asked:

Social Finance Impacts America For The Good Of The Consumer.

Just the other day I was needing some money for an idea that I wanted to pursue. My credit score happens to be over 700 so I could basically go anywhere to get the money. About 2 months ago on one of the national networks there was a story about a new way of investing money and borrowing money. This new way of borrowing money was called “Social Finance.” Wished I would have thought of it, but I didn’t, so now I must take advantage of it. In doing some research I noticed not a whole lot being said about it, but I know there is a great need for it. I’ll be one of the first to jump on the band wagon.

SOCIAL FINANCE - Zopa had this to say, “People have been lending and borrowing money with each other since…well, forever. We tend to call that sharing money.

Every bank is about sharing money–your money goes in, they share it with other people, called borrowers. They pay you 2%, then charge them 18%. But it’s not very satisfying, since you don’t know, and can’t say, who you’re sharing with. And too much of that money goes to polish all those marble floors.

With Zopa, this is all gonna change. Zopa brings people together online so they can share money, easily, safely, and in a way that’s fun and meaningful.

Oh, and since there are no big banks involved, with all their extra costs, everybody will get a better deal. And have a chance at their own marble floors. Visit Zopa Now For A Quick Low Rate Loan.

Zopa is the world’s first social finance company. - Zopa caters to funding personal loans, debt consolidation loans, small business loans, student loans and wedding loans or virtually any type of loan that you need. If you have a credit score of at least 640 you can qualify for between $1000 and $20,000 loans. There are some other requirements also to qualify you for ultra low rates.

You Must Have A Minimum of 3 years of credit history with at least 5 accounts

No recent bankruptcies or serious delinquencies

You Need A Stable gross income of at least $2,000/month

 

A debt service ratio/debt to income of less than 50% of gross monthly income.

HERE IS THE BIG SECRET TO CHEAP LOANS -

Borrowers utilizing less than 60% of the credit available to them are more likely to be approved for a Zopa loan and at a lower interest rate.

GO TO ZOPA AND GET A LOW INTERSET RATE LOAN NOW!

What Makes Zope So Great - At Zopa, They pioneered the idea of online social finance, where people use the tools of financial services (loans and investments and so forth) to help each other at the same time that they help themselves. That’s why it’s so natural for Zopa to have partnered with credit unions, too.

Think About It. At a big bank, your loan application is just a bunch of numbers. But at Zopa, who you are, and the dreams you have, make a big difference in how much your loan costs. Because other people can get excited, too, and chip in to help pay down your loan.

GO TO ZOPA AND Find Out More!

p2p lending

Kyle Gentile asked:


Starting a business is an overwhelming thought. One of the first things to consider is the funding you will need to get off the ground. In the past, you would need to either find investors, an angel investor, or attempt to get a business loan. Today, peer to peer lending is a new option that people are finding it as a viable option for funding a business.

The advantage of using peer to peer lending is the scale of your application. When you apply to a bank or approach an angel investor this is just one potential lender. If you use peer to peer lending, you are submitting a request for funding to thousands of potential investors. Everyone that is on a peer to peer lending site is a potential investor. Large sites like Prosper have a couple hundred thousand members. That is an exposure not easily achieved through the other models.

There are specific peer to peer lending sites that are designed for entrepreneurs. 40 billion is one of these sites. They offer a large range of funding from $1,000 to $99,000. It allows you to then sell your loan and business by giving you the ability to upload power point presentations and video. You can also invite people to invest in your loan to gain exposure and possible funding. To further help entrepreneurs, 40 Billion has business to business classified. This list could include attorneys, web development, and business cards.

The cons of using peer to peer lending for business loans are the limited amount of funds you could receive. If your idea is a large one and you need more than just a $100,000 then peer to peer lending might not be the route you want to take. Secondly, the loan will not be in the business’s name but in a person’s name. This person is then responsible for the loan regardless of how the business does. As a single entrepreneur this might be fine, but getting funding as a group means one person needs to take responsibility.

Peer to peer lending for small business has its place. For a person looking for just some start up money or just to expand, it could be ideal. Also, there is no guarantee that it will be funded so the borrowers need to sell it. If you are thinking about applying for a peer to peer loan be very clear on what it is for and what are your goals. This is a sign of a person who has direct and makes for a more confident business proposal.



peer to peer lending