Loans 101: Application and approval
A loan is a type of debt. Like all debts, a loan involves the re-allocation of money over a period of time between the borrower and the lender. The borrower initially receives an amount of money from the lender. This money is paid back either in full or in regular installments (with interest of course).
Acting as a provider of loans is one of the principal task for financial institutions such as a bank. For banks, loans are generally funded by deposits.
That's how banks usually earn. Their deposits are loaned out and when the borrowers pay with interest, voila! Earnings for the bank.
Other types of debt include mortgages, credit card debt, bonds, and lines of credit. A mortgage is a very common type of debt used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property. The bank, however, is given the title to the house until the mortgage is paid off in full.
If the borrower is unable to pay, the bank can repossess the house and sell it, to get their money back.
The abuse in the granting of loans is known as predatory lending. It usually involves granting a loan in order to put the borrower in a position that one can gain advantage over him or her.
When applying for a loan, you must prepare a written loan proposal. Make your best presentation in the initial loan proposal and application. You may not get a second opportunity.
Always begin your proposal with a cover letter or executive summary.
Clearly and briefly explain who you are. Include all there is to know about you. Your business background, the nature of your business, the amount and purpose of your loan request, your requested terms of repayment, how the funds will benefit your business, and how you will repay the loan. Keep this cover page simple and direct.
Many different loan proposal formats are possible.
You may want to contact your commercial lender to determine which format is best for you. When writing your proposal, don't assume the reader is familiar with your industry or your individual business. Always include industry-specific details so your reader can understand how your particular business is run and what industry trends affect it.
Loan Repayment:
Provide a brief written statement indicating how the loan will be repaid, including repayment sources and time requirements. Cash-flow schedules, budgets, and other appropriate information should support this statement.
Existing Business: Provide financial statements for at least the last three years, plus a current dated statement
including balance sheets, profit & loss statements, and a reconciliation of net worth.
Aging of accounts payable and accounts receivables should be included, as well as a schedule of term debt. Other balance sheet items of significant value contained in the most recent statement should be explained.
Projections: Show how your operations will make money. Include earnings, expenses, and reasoning for these estimates. The projections should be in profit & loss format. Explain assumptions used if different from trend or industry standards and support your projected figures with clear, documentable explanations.
Collateral: List real property and other assets to be held as collateral. Basically, collateral is the bank's way of ensuring that they will get something back from if you're unable to pay back the loan. Few financial institutions will provide non-collateral based loans. All loans should have at least two identifiable sources of repayment. The first source is ordinarily cash flow generated from profitable operations of the business.
The second source is usually collateral pledged to secure the loan.
Your bank is in business to make money. Consequently, when a bank lends money it wants to ensure that it will be paid back. The bank considers the 5 "C's" of Credit each time it makes a loan.
Capacity to repay is the most critical of the five factors.
Capital is the money you personally have invested in the business and is an indication of how much you will lose should the business fail.
Collateral or guarantees are additional forms of security you can provide the lender. If the business cannot repay its loan, the bank wants to know there is a second source of repayment. Conditions focus on the intended purpose of the loan. Character is the personal impression you make on the potential lender or investor.
.
How To Get a Good Value on Personal Loans
Over recent years, personal loans have become a popular solution for many consumers looking to raise finance for a variety of purposes. You can get personal loans for all sorts of things, from debt consolidation to holidays, cars and other purchases. It is far easier these days to get a great deal on finance, with cheap personal loans available from a variety of competitive lenders.When looking into personal loans, you should consider a number of factors. Comparing the interest rates and terms on a selection of deals will ensure that you get access to cheap personal loans so you can enjoy lower monthly repayments. And if you go online to browse deals and apply personal loans lenders can offer instant quotes as well as really competitive rates of interest.
It is always advisable to compare a number of quotes and deals on personal loans, as you can then make an informed decision with regards to which finance package offers the best rates and terms for your needs and your budget...
How To Get a Good Value on Personal Loans
Loans > How To Get a Good Value on Personal Loans
Finding a Memphis Mortgage
Located by the Mississippi River in western Tennessee, Memphis is a city rich in history and diversity. Long associated with giving birth to the civil rights movement - Dr. Martin Luther King was murdered at the Lorraine Motel there - the city has emerged as a place where business is welcome and tourists love to visit. For these reasons, local residents enjoy the city purchasing property and welcoming new neighbors. A Memphis Mortgage awaits you if you want to invest in this charming city.
Purchasing a house in Memphis is a lot like purchasing a home in any city: you make a down payment, contact several lenders for competing bids, and select a lender based on the information given.
Your Memphis Mortgage is ready and your move is assured. Not so fast! Huh? Have you researched your options thoroughly? Are you satisfied with the offers received? How do you know if the rate you received is accurate? Let's look at some online sites that can provide key and up to date...
Finding a Memphis Mortgage
Loans > Finding a Memphis Mortgage
Bad Credit Home Loan ? Tips to Get a Home Loan
Do you have bad credit and are trying to get approved for a home loan? Getting a mortgage loan with poor credit history can be difficult, but it's definitely possible. Getting a home loan with bad credit has actually never been easier than it is today. Here are some tips to help improve your chances of success:Find A Good Real Estate Deal ? If you can find a property that has some equity in it when you purchase it, you may have an easier time getting financing on that property. To the lender it may be almost as good as if you had some kind of down payment on the property. Some lenders will consider the properties loan to value ratio when they consider the loan.
Talk to your mortgage broker and see if this factor could help you get qualified.Try Creative Financing ? See if the seller would be willing to carry back a second mortgage on the home. This is where you set up a contract or agreement with the seller that you will pay them monthly payments, including interest of, let's...
Bad Credit Home Loan ? Tips to Get a Home Loan
Loans > Bad Credit Home Loan ? Tips to Get a Home Loan
JK Harris: Improved IRS Form 941 Welcomed by Many
The redesign of the employment tax return Form 941, Employer's Quarterly Federal Tax Return, is a welcome sight to many businesses, tax practitioners and payroll companies, according to officials at JK Harris & Company. The nation's largest and most successful tax resolution company, JK Harris prepares thousands of tax returns annually for individuals and small businesses. Peter Hukki, an Enrolled Agent for JK Harris, said the form is easier to follow, and the instructions have been greatly improved."The...
debt consolidation Loans
Loans > JK Harris: Improved IRS Form 941 Welcomed by Many
Loans Loans 101: Application and approval televisions
Home Electronics: The Facts About Plasma TV
Not so many years ago, homes across the country watched their favorite TV shows on a bulky floor model that took awhile to warm up before you could see the picture, didn't offer anything in the way of remote control manipulation and offered a washed out image on the TV's cathode ray tubehosted screen...and folks were thrilled to have such marvelous technology in their midst. Today, all of that's been changed, with the introduction of plasma TV.Instead of trekking to the local theater to catch...
Loans Loans 101: Application and approval Home Electronics: The Facts About Plasma TV plasma
Loans > Home Electronics: The Facts About Plasma TV
How to Use the Power of Words to Your Benefit - Part I
Someone I know maintains that "motivational words are great coming from philosophers, but that's because they're not in the real world." The power of words can be an incredible aid to helping us remain motivated and focused.Abraham Lincoln certainly was in the "real world". So was Henry Ford. Napoleon Hill, Anthony Robbins, John Kehoe, and so the list goes on.For most of us, the words we read have little impact on us and our lives, and especially on the setting of our goals. Here I hope to...
Loans Loans 101: Application and approval How to Use the Power of Words to Your Benefit - Part I
Loans > How to Use the Power of Words to Your Benefit - Part I
Diamond Wholesale Corporation Ranked # 27 as One of Canada’s HOT 50 Companies
(ContentDesk) October 10, 2005 -- The Diamond Wholesale Corporation (www.DiamondWholesaleCorporation.com ) ranked # 27 as one of Canadas 50 top Emerging Growth Companies in the sixth annual PROFIT HOT 50 ranking. The PROFIT HOT 50 is the definitive ranking of Canadas emerging growth companies. Published in the September 2005 issue of PROFIT and online at PROFITguide.com, the PROFIT...
Loans diamond
Loans > Diamond Wholesale Corporation Ranked # 27 as One of Canada’s HOT 50 Companies