The Commercial Lending Market Environment in 2015: California and Comparison to Key Cities

In March 2015, the National Association of Realtors (NAR) randomly surveyed 49,485 realtors asking them about the housing market conditions in their particular state during that past year. 791 individuals – 1.61 percent – responded. As realtor who works in California, I found it informative to work through the different reports, categorize them according to…

In March 2015, the National Association of Realtors (NAR) randomly surveyed 49,485 realtors asking them about the housing market conditions in their particular state during that past year. 791 individuals – 1.61 percent – responded. As realtor who works in California, I found it informative to work through the different reports, categorize them according to challenging and easy conditions, and wrap up by comparison to real estate conditions in California during 2015.

Commercial lenders, investors, or anyone interested in buying or selling property may find this analysis informative and interesting. Here it is.

Some states found the market environment to be feasible.

Some states such as Illinois found 2015 to be a booming time for real estate. Agents in Chicago reveled in opportunities.

This broker had this to say:

[…] Best market in my 40 year history. These are the “good ole days”! – Tennessee The property taxes are out of control, especially for commercial properties.

But another added

The property taxes are out of control, especially for commercial properties.

Other states suffered from their market environment

There were the common gripes: Recession, economic uncertainty, spiking prices, topping default, languishing homes because of unaffordable prices or troubled or unstable markets.

Said this agent in New York:

Economic uncertainty is a close third choice to item 3 above. The 'local' commercial investor remains hard-hit by the recent recession. Significant vacancy still exists for many 'neighborhood' centers.

And another:

We live in a troubled area it makes it very hard to start or maintain a business in small town America.

Montana in 2015 was another pricey area. Real estate agents there noted:

Declining rates of return. 7% today is reduced by low annual increases to the point of leases being a detriment the longer they are in place and that affects a bank and buyer being attracted to them. Net present value of future dollar return: 10% every 5 years ends up being loser in the long run not being able to stay even with historic 3% or 4% inflation.

Fussy lenders

Other states, this last year, saw fussy lenders who were more relevant to lend. A great deal of this was due to tightened regulations and heightened consumer protection that was especially taut for residential property.

In Missouri, for instance, real estate agents stated that:

Reduced net operating income of the Subject Property and the borrower, values ​​and equity positions (greater equity contribution to the transaction and lower loan-to-value) have a HUGE impact on the decisions lenders are considering and making. Money does NOT seem to be the problem.

Government regulations had tossed in their part and although they are certainly helpful to the borrower provided provoking to private lenders . In North Carolina, this is what representatives in the real estate industry had to say about their situation:

Dodd-Frank has done missives to the sale of Farms, home must be valued at 35% of sales price.

And said another in Indiana:

Government over-regulation stifles growth.

The private lending sector has grown by leaps and bounds this past year, but apparently, the larger the private lending market, the deeper the toe-hold of the federal government. Florida witnessed the worst of it in 2015. (These coming months predict no better). Said a broker working in Miami:

Future Flood Insurance rates are a big issue in Florida Commercial Real Estate

The market environment in California in 2015

California housing prices topped all charts breaking way out of bounds. On the one hand, the ground was bursting with architectural designs and attractive buildings some of which were identified by the most famous names in the architectural field. Wealthy expatriates and foreigners flocked to the land plunking cash straight out of pocket to purchase buildings. Buildings included homes and commercial properties. Prices across the board rose to new heights.

In most cities in California supply increased apace. Apartments were the stock in demand, probably because they were the most affordable. But even here, one had to be reliably wealthy to afford them.

Housing in California has long been more expensive than most of the rest of the country, but between 1970 and 1980, California home prices went from 30 percent above US levels to more than 80 percent higher. Today, an average California home costs $ 440,000, about two-and-a-half times the average national home price ($ 180,000). Also, California's average monthly rent is about $ 1,240, 50 percent higher than the rest of the country ($ 840 per month). And prices are predicted to rise (albeit slightly) the coming year.

Also, not enough housing exists in the state's major coastal communities to accommodate all of the households that want to live there. This competition bids up home prices and rates. Some people who find California's coast unaffordable turn instead to California's inland communities, causing prices there to rise as well. In short, California became notorious for pricey homes leading experts to predict a housing bubble that would supercede that of 2006 in scope and intensity. (But if this is so remains arguable).

High home prices here also push homeownership out of reach for many. Faced with expensive housing options, workers in California's coastal communities commute 10 percent further each day than commuters elsewhere, largely because limited housing options exist near major job centers. Californians are also four times more likely to live in crowded housing leading at least one private commercial lender who works in California to observe that:

Vacant Land is Always a Problem.

How to Navigate Today’s Commercial Real Estate Market in California of 2016

It is a good time to be a commercial real estate borrower in California if you have performing property. Prices are static for the first time in ages, the private commercial lending market has prospered, and loan-to-value (LTV) ratios are up. New consumer protection regulations have come out in your favor, and a new administration…

It is a good time to be a commercial real estate borrower in California if you have performing property. Prices are static for the first time in ages, the private commercial lending market has prospered, and loan-to-value (LTV) ratios are up. New consumer protection regulations have come out in your favor, and a new administration may mean more proactive borrowing rates and relaxed property taxes. The blip is the Fed's slightly increased interest rate which raised mortgage from 3.8 percent last year to 4.5 percent the coming.

The advantage that the alternative money lenders have is that they offer more convenient proceedings than the banks, faster turnovers, more flexible terms, and an underwriting process that is easier than ever. Add to that the slew of recent protection laws passed in your favor by California's federal government and consumer agencies and you may be in luck.

Looking to buy a home, do some flipping, or conduct some renovation? Look no further. If you live in California, hard money loans are a feasible alternative. Best of all, local lenders are competitive for business and offering more aggressive terms and skinnier pricing than ever.

Housing prices are slowing

California Association of Realtors (CAR) showed that prices are finally slowing for the first time in decades. Five years ago prices jacked up from $ 300,000 in 2010 to tipping $ 500,000 this coming year with only a slight drop in the first two years. If you have a home that cost you $ 43,000 ten years ago, you could sell it for double that price this coming year. In fact, 2016 is a good time to not only sell but also to buy since house prices are only slightly lifting their head – by a mere percentage or two. Wait longer and CAR warnings that global economic uncertainty and predictable higher Fed rates may toss prices out of your reach.

The fact that prices are slowing does not mean that prices are affordable. Far from it. The California housing market has a reputation for home prices and rents that are higher than anywhere else. But if you've been turned away from your bank, need the loan to fix or buy, and have a promising property in mind – a hard money lender may be a promising solution. He or she evaluates the worth of your property rather than your credit history and grants you the money accordingly.

California's alternative lending market

For those who are familiar with banks or other alternative lending institutions and naught or little else, the hard money lending niche may come as a pleasant surprise. Originally notorious due to its high prices and low loan-to-value rates, this market has divvied up its competition and caused lenders to outbid one another with more aggressive terms, faster proceedings, higher LTV, and skinnier pricing.

A fleeting look at a hard money lenders ' directory in California (BiggerPockets.com), for instance, shows 578 listings. Approximately 65% ​​of these offer LTVs that reach 80 to 100%. Five years ago, you'd be hard pressed to find any such attractions. Most offered around the 50% -60% range. Looking at that Directory, you'll also find lenders who offer all kinds of loans from residential to commercial to business and in-between. Worried about the amount of money that you can borrow? Many private lenders pair up with organizations or individuals so that they can offer you loans that range from $ 100,000 upwards (mean loans seem to hover at $ 150,000). Most promise a fast handover so that you can complete your fixing or flipping in the shortest time possible or jump to the front of the que in bagging that home. As comparison: Banks take at least 60 days to process your papers. You'll need to provide forms, signals tons of forms, pay to have them scrutinize your FICO and credit history as well as all related matters. And at the end of it all, you may not receive your loan. Hard money lenders do all of this at the fraction of the time – within a week at most – and rarely review your credit history. It is the value of the property that remains important.

The Directory at BiggerPockets.com mentions that hard money lenders typically lend for only very short terms, usually between 6 and 24 months. But actually rates, fees, terms, and schedules vary among individuals since each lends from his or her own pocket.

Shortfalls, of course, are the high price – double that of the regular mortgage – and the fact that the lender may pocket your property if you fail to make repayments. (Fees usually range between 8 and 15% depending on the loan amount and term length. When taking out a hard money loan, you will usually pay a fee ranging between 3 and 10% of the loan amount; this fee is also known as paying “points”.) Those are points that you will want to consider.

Loan-to-value rates are up

Properties have their equivalent in money.So, for instance, if your property is worth $ 80000 you would get $ 1000. Hard money lenders are notorious for paying glaringly low percentages that tend to hover around 50-60% of the collateral value. This also dissuaded borrowers. But in 2015 this changed. Hard money lenders in California expanded their LTVs from the usual 65% to 75% of the appraised value to more attractive rates. A cursory look at the latest reports from online LA lending agencies show that one or two individuals or organizations even offer LTVs at 100% of the appraised value. Given the strength of the housing market, this may encourage more people to buy and sell homes and certainly makes for a more optimistic future for hard money lenders who live and conduct their business in California.

Consumer protection regulations are in

Here are just some of the laws:

  1. Law 6500 of Consumer Protection on balloon loans – FDIC created law 6500 on Consumer Protection which restricts balloon loans so that they can not mature in less than 5 years. In some cases, such loans are even banned. This brings them from becoming too excessive and beyond your means of repayment.
  2. Negative Amortization Bans – Negative amortizations refer to cases where the interest rates are so massive that the individual is unable to keep up with repayments. As a result, the borrower slides further into debt since making repayments. The Government bans negative amortization.
  3. Government checks your ability to repay – Federal laws on consumer protection insist that lenders must conduct some sort of credit check or income verification before issuing a loan. A lender who proceeded without checking the borrower's financial ability, or knowingly lends to a low-income borrower procedures what consumer protection calls, a predatory loan. A judge can render such a loan unlawful and dismiss it if it occurs.
  4. Upfront payments – Federal laws stipulate that the lender can ask for no more than two reasonable sized prepayments although the number and amount depends on the structure of the loan.

2015 also see the TRID which requires that the lender release his calculations and show you all details of the transaction. This gives you time to reflect and to question or restart the process if you want.

Seeking to tighten protection, California's Department of Business Oversight (DBO) recently surveyed the Marketplace Lending (P2P) industry to see how they could intensify protection. This P2P industry includes all private, non-government based lending individuals or organizations. DBO Commissioner Jan Lynn Owen stated that the purpose of her survey was to “protect” consumers from fraud and exploitation. The DBO intends to tighten the scope and conditions of its lending structure so that fewer lenders – and only those more qualified and honest – will be able to practice.

So far, the DBO surveyed fourteen Marketplace Lending platforms in California requesting a five-year trend data about their loan and investor programs. The results of the survey are still to come in.

All of this slows down the lending process, but would not you rather that your money be safe?

Healthy housing market

Prices are high but that's another factor. Demand for housing itself remains strong (although most prefer to rent). Plenty of people in California are looking for affordable homes. California remains as desirable a place to live as ever. If you have the money and want to buy, you can still find affordable homes on market. If you want to sell, experts say that now may be a propitious time. Private lenders (such as hard money lenders) are aware of that fact and are only too keen to help you. Market conditions spur private commercial lenders to find promising clients and if you seem to be one, they may adjust their rates for you accordingly.

Finally, although not definitely, there are rumors that a new administration may relax property tax and curb rising housing prices. We can not rely on these predictions, but would not it be great if so …

How can you improve your rate of success?

Approach the commercial lender as you would the bank. Craft your petition as a business proposal. focus on the value of the property; demonstrate how much it can give him in the long run and how it would profit him to invest. Secondly, affirm your historical success with real estate and your knowledge of the market …

If you succeed in highlighting the value of the property, you may well walk away with money within 24 hours that can help you move forward to achieving your goal.

Real Estate Review and Commercial Lending Trends in California of 2015

We’re looping towards the end of 2015. The year has been an eventful one for California’s real estate industry. These are the highlights as reported by the National Association of Realtors in the beginning of last month (November 2015): Commercial vacancy rates declined for office, industrial and retail properties.

We’re looping towards the end of 2015. The year has been an eventful one for California’s real estate industry. These are the highlights as reported by the National Association of Realtors in the beginning of last month (November 2015): Commercial vacancy rates declined for office, industrial and retail properties.

Flexible Funding: The Competitive Advantage

What do you do to fund that once in a life time order? Where do you access cash to exploit sales opportunities? What can give you an advantage over your competitors? It is not always reputation, expertise or even entrepreneurial drive that determines why one business thrills whilst others struggle. Ultimely it can simply be…

What do you do to fund that once in a life time order? Where do you access cash to exploit sales opportunities? What can give you an advantage over your competitors?

It is not always reputation, expertise or even entrepreneurial drive that determines why one business thrills whilst others struggle. Ultimely it can simply be that one business has access to cash to and one does not.

When a business needs access to cash to fund growth, fulfil orders or even to pay for the increasing costs of day to day business traditional bank lending is the first port of call.

However, the flexibility or speed of decision a modern business requires can not always be offered by a traditional lender. In the dynamic world of modern business there is not time to wait on the cogs of a bank's decision making process to turn. A business with the ability to make decisions without necessary worrying about whether the cash is available to support them has a distinct competitive advantage.

There are many different financing options available to businesses over and above those traditional lending products. Identifying where most of the value of a business is tied up and then knowing how best to unlock it is key to giving this advantage.

Front end working capital solutions include:

1. Purchase Order Finance – Direct payments to suppliers against purchase orders worldwide for goods, covering up to 100% of the purchase price plus duty and logistics.

2. Letters of Credit – Payment guarantees covering up to 100% of the purchase price from suppliers, subject to satisfying delivery and other conditions.

3. Stock Loans – Release valuable working capital locked up in your warehouse up to 100% of the stock value.

4. Supply Chain Finance – Facilities to fund up to 100% of a trading company's purchases from suppliers worldwide, structured as supplier payments or reverse factoring processed through a proprietary online platform.

Back end working capital solutions include:

1. Invoice Finance facilities – These are revolving facilities funding up to 90% of your invoice value Releasing cash tied up in your sales ledger and all ongoing sales. Facilities can be on a disclosed or on a confidential basis.

2. Asset Based Lending facilities – Facilities release up to 70% of the cost value of warehoused stock on an on-going basis. These are designed to complement invoice finance facilities to maximize the amount of working capital that can be provided.

3. Asset Refinance facilities – A stand alone, one off, facility designed to provide additional working capital by releasing cash against plant and machinery. This an option for the quick release of funds which advances up to 80% of the asset's value whether the asset is owned outright or currently under an existing finance agreement.

4. Sale and HP Back – With this product the asset is purchased by the lender at an agreed value and financed back to you over a fixed period with repayments matching the income stream generated by the asset.

Considering the range of financing options available exploring the huge range of lenders outside the traditional banks is key to getting the best value financing in form that suits a business's unique needs.

Trust Deed Investors: One Way to Get Investment Income in a Low Return Environment

It is most generally acknowledged that the person’s early years such as the twenties is the best time to start investing. After all, you have all of life ahead to invest money which is why so many books on investment – most actually – are geared towards the twenties. Fewer are towards the thirties, and…

It is most generally acknowledged that the person’s early years such as the twenties is the best time to start investing. After all, you have all of life ahead to invest money which is why so many books on investment – most actually – are geared towards the twenties. Fewer are towards the thirties, and even fewer towards the forties and retirement.

Business Financing Strategies – Proof of Market

Start Up Business Loans Are Hard to Get It's no secret and should not surprise most, it's reliably difficult to obtain business financing for a start-up business specifically in getting a conventional bank loan. These financing institutions are in the business of making money … not losing it based on a 'hunch' or unproven business.…

Start Up Business Loans Are Hard to Get
It's no secret and should not surprise most, it's reliably difficult to obtain business financing for a start-up business specifically in getting a conventional bank loan. These financing institutions are in the business of making money … not losing it based on a 'hunch' or unproven business. So, if you are a start-up or at least thinking of starting a business, how can you solve this problem of getting a business loan from a conventional bank? Here's the key: do not be a start-up business. Easily said, but not difficult to accomplish if you practice discipline and commitment.

The main reasons businesses fail in obtaining financing are:

  • Lack of Concept
  • Lack of Market Proof
  • Low Profit Margins
  • Lack of Business and / or Personal Assets for Collateral

Today, we'll go over Lack of Market Proof.

How to Gain Proof of Market
It's hard to produce and sell products and services to a market that does not exist or is too small. Start-up businesses fail to consider the size and profitability of the market that they intend to serve. Due to the many options made available to aspiring start-up businesses via social media and other online platforms such as Google or Yahoo, it's simply simple to find out the market potential for a business. The recommendation is to apply the MVP or “minimum viable product” principle which means you take a simple prototype of your main product and / or service offering and get it to the target market quickly. The purpose of doing this is to gain quick feedback for necessary revisions and proof that the market exists. Also, to really get a flavor of the market, hit the streets and ask prospective customers. Identify several suspects for your product and / or service offering, and reach out to them with a phone call, direct mail survey, or in person visit. The primary purpose of these activities is to gain feedback and ultimately a sale if mutually beneficial.

From what I've observed over the last decade in working with and observing start-ups, it takes 12 to 18 months to really gain traction in a market. Please do not confuse this with the testing of the start-up idea in the market. This should be quick to notice taking no more than 30 days. In other words, if you're MVP does not garner enough feedback and absolutely sales, then you either abort mission or revise / re-test.

How do you strengthen your case for business financing with proof of market? Once you have proof of market for your business via sales and proof of cash received via business bank statements, include these documents in the business financing package. Show how the business loan will either enhance the ability to gain more market share or grow profit margins through business growth.

Various Types Of Loans Available For Business Startups

Getting financial help can be difficult for small businesses. So, loans are a great way out. Some of the loans are beneficial for startups where others are better suited for well-established companies. There are various kinds of loans available these days, which we shall discuss below. Bank Loans For owners of small business who require…

Getting financial help can be difficult for small businesses. So, loans are a great way out. Some of the loans are beneficial for startups where others are better suited for well-established companies.

There are various kinds of loans available these days, which we shall discuss below.

Bank Loans

For owners of small business who require a reasonable amount of cash flow, bank loans are an excellent option because they usually have lower rates than any other type of financing. If any business owner is planning to avail loan from banks then they must provide complete financial information, a good business plan, and a guarantee. However, smaller local banks have easier underwriting for loans. When you are planning to take financial help from a bank, then you must take into consideration the processing time taken by banks.

Credit Cards

Many small businesses have been established with funding available from personal credit cards. This is because it is readily accessible cash, and moreover, personal credit cards are easier to get hold of than a business loan from a bank or elsewhere. This does not imply that it is the best choice for your startup or business.

When you are considering the merits of various types of loans you can avail, you need to think about interest rates which would apply. Credit cards typically have a higher rate of interest than loans. What's more, is making use of personal credit to support a business is dangerous. If at all the business you started fails, then you would be damaging all your credit and you will be left nothing much for your future.

Lines of Credit

Most of the banks which offer loans also offer lines of credit. The advantage of this type of financing for small business is its flexibility. It is good for additional cash flow when a particular business opportunity awaits you and you require funding. They can be easily availed in the form of credit card. By using a line of credit for various business expenses, you can keep track of the accounts used for business and for personal purchases.

Alternative Lending

You will find new players in the territory of lending funds for small business. They are called as alternative lenders. Alternative lenders provide loans to the owners in the type of quick and flexible funding.

Unlike banks alternative lenders use borrowed capital and make a broader range of advertisement like comments on social media sites, online reviews, and so on. This enables funding to be easily accessible, and most of the business owners will find out in no time if they are accepted. Borrowers typically pay a higher rate of interest in this type of funding. But, it is more advantageous for a business owner who is in need of quick cash.

So, if you are in need of funds to start your business, various types of loans can be what you can resort to.

Merchant Cash Advance – An Excellent Solution for Businesses With Credit Card Sales

A friend of mine opened up a restaurant in New York near a decent locality. With the real estate prices being on the rise, he used a major portion of his savings to pay for the deposit and the advance rent. The rest was used in buying the necessary appliances and equipment. He still needed…

A friend of mine opened up a restaurant in New York near a decent locality. With the real estate prices being on the rise, he used a major portion of his savings to pay for the deposit and the advance rent. The rest was used in buying the necessary appliances and equipment. He still needed cash for the interiors, salaries and the other operating expenses.

He did not want to close down the place because it had started doing good business. However, he had to do something immediately about the furniture and the operating costs to stop customers from moving away. That's when I told him about Merchant Cash Advances!

I am in a business that has been selling merchant cash advance leads for quite some time now. We save the details of businesses that are in need of cash, find out if they need any cash advances and sell these merchant cash advance live leads to our clients. We are in touch with many advance providers who are very interested in buying such commodity cash advance live transfers from us. I introduced my friend to one of these clients and within no time my friend got his cash that he wanted for his business.

The procedure was very simple and the formalities, very few. All he had to do was to prove that he had credit card transactions and the volume was quite decent. The Merchant cash advance provider was well-aware of the restaurant and was convinced of the fact that he would get his money back. So, three days is all that my friend had to wait to get his cash advance.

Once he had taken care of all his expenses, his customers grew and business became even better. He did not have to worry about depositing cash in the bank or making payment to the merchant cash advance provider. As soon as he swiped a credit card against the bill, a pre-agreed percentage of the amount would automatically get transferred to the advance provider's account. Although he had to pay set up fees and a couple other costs, things were extremely convenient.

There was no pressure from the cash provider to repay the advance. There was no deadline involved. Cash would be credited to his account as and when credit card transactions happened. My friend did not have to face any problems of not being able to meet his operating costs again. He was extremely thankful to me and all that I had done was introduce him to one of my clients who bought merchant cash advance real time leads from our company.

Benefits of Merchant Cash Advances (MCAs):

MCAs can work very well for retail shops, hotels, restaurants and travel agencies that have a lot of credit card sales volume. The main benefits associated with these cash advances include:

No Fixed Monthly Payments

For one thing, a merchant cash advance is not a loan that requires you to make fixed monthly payments, either you can afford them or not. You do not have to worry too much about them.

Payments become very convenient

You pay a percentage of your daily credit card sales depending upon the volume. The payments, as explained above, are very convenient to make as they happen automatically.

Fast Cash

The best thing about MCAs is the time taken to process them. All that the provider is interested in, would be your credit card sales volume and if you can prove you have good volume, you get the cash immediately. There is no need to worry about credit score and other documents.

You do not feel the pinch

Since there is no fixed amount that is to be paid daily, you do not really feel the pinch of paying back the loan here. You need not worry about saving up the amount needed to pay back the provider.

An MCA can certainly be beneficial for many businesses, which are in need of urgent cash to take care of their expenses. However there are certain things these businesses have to consider before applying for such an advance.

First thing is they have to make sure their credit card sales volume is very high and they are left with enough money to take care of their operating costs after paying back the provider. Another thing they have to understand is that there are many kinds of costs involved with MCAs. It may prove costlier than a regular loan. The percentage of the credit card sales that they have to pay is also quite high.

Although there are drawbacks, the benefits of MCAs surely outweigh them. If you have done your homework well and feel that you could benefit from such a cash advance, it would be a really wise decision to go for a merchant cash advance!

A Study on Different Forms of Invoice Finances

The world of invoice factoring may seem confusing for the novices. Although, the basic factors are quite simple. It becomes difficult to choose one of several options that can benefit the business, particularly when the entrepreneur lacks proper knowledge about invoice factoring. Beside, the unfamiliar terminology makes situation even more complicated. There are basically three…

The world of invoice factoring may seem confusing for the novices. Although, the basic factors are quite simple. It becomes difficult to choose one of several options that can benefit the business, particularly when the entrepreneur lacks proper knowledge about invoice factoring. Beside, the unfamiliar terminology makes situation even more complicated. There are basically three types of invoice finance options available, they are –

• Invoice factoring,
• Invoice discounting
• Selective invoice finance or single invoice finance

A Brief Study on Invoice Factoring

The idea is quite simple, in place of waiting weeks and months for raising the invoices you owe from the customers, factoring service advances 75% to 90% against the invoices instantly. It helps you to carry out the day-to-day business operation with less complication, meet the payroll and pay the suppliers. When your client pays back the invoice, the factoring company reimburses the rest of the amount deducting their fees and the amount they advance you. Invoice factoring company also provides 'credit control' service for ensuring your client's timely pay. This service helps you to concentrate on the basic chores of business in place chasing the customers for collecting unpaid invoices. Accounts receivable financing is the viable option for businesses that do not have finance department and hold a client base that does not pay immediately after the delivery of the product or completion of the service. Factoring gives an effective means to use your resource and time.

On the other hand, invoice factoring and invoice discounting both works in the same way but when you chose invoice discounting you can not get the 'credit control' service and it is primarily available for longstanding businesses who hold a record of collecting payments from the clients within predetermined timeframe. The main difference is the factoring company takes over the responsibilities of pursuing the debtor for on-time payment and issuing statements.

Selective invoice finance allows customers to select specific invoices against which the business wishes to raise funds or specific client whose invoice to finance. It's a practice option for business who clearly knows the amount of money they actually need although the process of financing is relatively complicated than the other two options.

Along these, you can choose from full resource and non-source factoring. In invoice factoring, the business remains accountable if the client fails to pay the invoice whether it's for financial problems, quality problems or any other issues. Whereas non-resource factoring does not count the business liable even if the clients can not pay the unpaid invoices. Depending on your preference, you can keep the service confidential as well.

How To Find The Right Import Loan Provider

Today, as global economic boundaries continue to merge and become porous, import businesses gain larger opportunities for growth and expansion. However, while growth is a good thing, it also comes with its own set of risks that business owners must handle well in order to sustain their progress. To manage these risks, one of the…

Today, as global economic boundaries continue to merge and become porous, import businesses gain larger opportunities for growth and expansion. However, while growth is a good thing, it also comes with its own set of risks that business owners must handle well in order to sustain their progress.

To manage these risks, one of the important steps importers need to take is to find the right partner that can deliver the best import loan solutions to suit their business objectives. From import documentary collections to shipping guarantees to important finance and more, import loans allow you to protect your business from risks and fluctuations that are an integral part of international trade.

There are many types of institutions that can provide you with import loan services – you can choose from insurance agencies to venture capitalists to domestic banks and more. Your best bet, however, is to approach a globally recognized commercial bank that can provide the stability, reputation and solid, customized support that you need. When you approach a global bank, do not be intimidated by their big name. You might be surprised to discover that a leading, restructured bank will receive and approve your application through a process that's faster and less fussy than, say, that of a lending company or a local bank.

You may only need to submit minimum requirements as long as you provide basic, reasonable evidence that you'll consistently attend to your obligations on time. Business owners also find it easier to work with big banks because these financial institutions have the capacity, interest, tools and resources to periodically improve their system and make it more streamlined.

A smaller institution, meanwhile, may not have the time, manpower or budget to delay operations to consistently fine-tune their systems and that get stuck in older, more complicated import import procedures. Another important benefit of working with a reputable multinational bank is having the access to a wide array of services not only related to import loan, but to business banking in general.

Do you need to issue a letter of credit to your suppliers? Do you want to improve your negotiating power? Would you like to extend your credit period and protect your cash flow? Talk to your bank about your concerns. If they care enough for you as a customer, they'll be ready to sit down with you to help you plan your next moves. Indeed, a global bank is the best choice for business owners who are looking for reliable import loan providers .