Locating Money, Personal and Business Levels
In this present economy, finding and securing money at the personal and business level is necessary in order to achieve financial stability...Many lenders are at the present time are securing additional funding for themselves from the federal government in order to survive a financial disaster. Others lenders that have secured lending still haven't released sufficient funding to consumers and businesses, therefore the financial illiquidity has continued. In these hard economic times, locating money, whether consumer or business, can be a major challenge.
One of the first considerations the consumer and/or business should address is how strong or weak is their personal credit. It is important to periodically obtain your personal credit data and review its content. In addition, it is necessary to protect yourself from personal credit errors or theft. Many credit bureaus offer package deals to the consumers and businesses for credit reporting purposes. Identity theft companies are also available to provide alerts to changes in credit activity..
Even if your personal credit score is strong, lets say 680 or higher, your debt to income ratios will be also analyzed to determine your financial liquidity. If your liquidity factors are poor, there is a good chance you will be declined or a reduced approved loan amount could be available. You have to remember that these banks have billions and billions of bad debts on their books and they are asking for government assistance at the present time. In addition, other factors on your credit reports may trigger other problems as well. The bottom line here is to know what is on your credit report before you start applying for a loan.
If you are looking for an unsecured or secured loan, this may be difficult at this stage depending upon your relationship with your l bank. Lenders are looking for as much security that they can obtain, therefore additional collateral will probably be required in the form of hard assets, receivables, inventories, real estate or collateral of stock. If you have many years in business, a strong D&B, and possible other mitigating factors with a high personal credit score might qualify you and/or your businesses for a working capital loan.
Most small business owners aren't going to be eligible to qualify for the above facts. Sufficient collateral and security for the lenders becomes a paramount issue before the lenders will consider the funding request..... Many businesses, either startup or seasoned, may be frozen out of today's funding and therefore threatens their existence to survive or get started...
In the market today, secondary funding has become available to the businesses and/or consumers.. Many businesses without good business and/or personal credit still can be eligible for factoring, cash merchant advances and/or loans, or securing money on free and clear hard assets. These lending programs are available but their costs aren't cheap in nature.... Factoring can cost you between 2-5% per invoice but could be a welcome outcome to a cash strapped business with no liquidity.. Obviously, understanding your business model, its gross profit and relates costs should be considered before looking at a factor.
Merchants can overcome bad credit by receiving substantial master/visa credit cards for payment of business services. This can include restaurants, bars, retail shops, gas stations, grocery stores, nightclubs, etc. Eligible cash merchant advances can be 1.25 to 1.5 x the previous six months average monthly visa/master card sales...Usually one can be qualified within 1-2 days and funded within 7 business days....
Many businesses have free and clear assets but no working capital or cash. Types of assets include dump trucks, commercial trailers, bulldozers, excavators, semi trucks, construction trucks and equipment etc...These free and clear assets can free up working capital for the business in need of money.. Lending terms could be between 36-60 months...
One of hidden forms of cash can be available to businesses and individuals in their tax returns.. Many businesses have lost money in 2008 due to the bad economic times. If you had business losses at the corporate and/or proprietorship levels for 2008 and had income for either/ both 2006 and 2007, you could be eligible for a net operating loss carryback which could generate a substantial tax refund...This could generate a substantial amount of available cash that you may not have anticipated.. You should consult your tax professional to ascertain where you stand.
Additionally, individuals should be talking to their tax advisor to see if there is tax refunds due to them for either overpayment and/or new tax benefits offered by the government....This could generate needed cash either to invest and/or survive debt demands.....
One of the most recent cash money programs available to individuals is payday advances. These programs are able to offer the person with bad credit money up to $1500. These programs are important because you never know when a potential problem in your life may be in front of you and cash is needed ASAP.. These monies can be used for anything and are paid over a short period of time. The percentage cost factor is high but this program may save you if needed for an emergency. Once you establish yourself and pay it off, you can reapply if needed. This program isn't credit driven but work and bank accounts are critical in order to pay back... Call and check out the details of these programs....
One of the hidden areas in this recession is the repossession market, there is billions of dollars of repos out there that create an opportunity for the individual and/or business. Repos exist in the housing, construction, trucking, retail markets etc. Banks have
taken repos back by the droves and need to put them into their revenue stream. Many repos you can get for no down, little or low down, and this offers the startup and/or seasoned businesses an unique opportunity...The combination of the pricing and financing has given the laid off employee an opportunity to get into business for a small amount.. Employees who want to be owner operators have an opportunity to get financing and generate substantial more revenue for themselves... These opportunities exist in many industries so it is worth the time and effort to do some research to achieve financial independence or expansion for the seasoned business.
In conclusion, this recession has created a paramount cash illiquidity. Strong banks that were considered the pillars of society have in many cases been brought down to their knees. The car industry has been leveled to the ground and government assistance was required to give these car makers a final opportunity. The housing and financial markets have brought chaos to the whole world and the ending to this crisis is still not known. It is important that the business and individuals consider the above facts but look at the unique niche opportunities out there. The repo markets are at their heights and basically gives every person an unique opportunity to start and/or expand a business....
Rick has over thiry years in the financial field including accounting and taxes, leasing, working capital and hard asset money loans, and commercial lending
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