The most challenging aspect in commercial borrowers reacquainting themselves with the “basics” for commercial mortgage loans is likely to be the need to not only focus on the “old basics” but also on numerous “new basics” created by a massive shift in commercial loan services. There have been surprising difficulties and changes for small business financing, and this is particularly illustrated by the current commercial banking climate for commercial mortgages. Because the issues currently impacting commercial real estate loans are so widespread and effecting business borrowers everywhere, it is appropriate for business owners to “get back to basics” before they finalize any new business loans.The outcome that effective commercial real estate financing is becoming harder to find is the biggest net result of the changes and challenges involving commercial mortgages. This observation applies equally to new commercial loans for buying a business and commercial refinancing efforts. Very few commercial lenders are providing a candid assessment of their inability to provide commercial mortgage financing for a wide variety of small businesses, and this makes the challenge almost insurmountable.The need for small business owners to be prepared for an extremely difficult commercial lending environment is an intentional emphasis in this discussion. Obtaining commercial mortgages can no longer be taken for granted by small businesses because of the recent ineffectiveness that prevails with commercial banking. Large corporations continue to have more leverage and resources for dealing with their banks. In a mirror image of that situation, small business borrowers are increasingly likely to have less resources and leverage when negotiating with any bank.Fewer banks providing this kind of financing to small businesses is one inescapable “new basic” for commercial real estate loans. It will frequently be even more difficult to secure a commercial mortgage from a new and unfamiliar lender if the current bank for a business is not willing to help. Nevertheless that is a likely funding scenario that currently confronts business borrowers everywhere. A particularly growing (and annoying) trend as noted above is that when banks have reduced their commercial loan activities, they are not generally being straightforward in telling prospective commercial borrowers. Banks are more intertwined than ever with political influences after a large number of them received government bailouts that helped to keep them operating. Very few banks have actually followed through on the promise to return to a “normal” level of lending once they received bailout funding.A reduced amount of leverage for most small business loans is another “new basic” that seems likely to prevail. Needing larger down payments to buy a business will be one result for borrowers. Especially when combined with decreasing commercial real estate values currently being experienced on a widespread basis, commercial debt refinancing will be more difficult because of the reduced leverage.We previously published a companion piece describing the need to get back to basics with working capital financing. In terms of the growing challenges with commercial refinancing, the points made in that article are directly relevant to this discussion. Our primary point is that any current effort to refinance a business loan is likely to be much more difficult than expected, and a small business owner might experience obstacles in getting needed cash by refinancing an existing commercial mortgage loan even when they have substantial equity. When commercial real estate refinancing cannot be obtained, commercial borrowers should consider a working capital loan as a “Plan B” solution.
Commercial Real Estate Loan Basics For Small Business Owners
How to Get Government Grants and Loans
Every person needs money for livelihood. Without money no one can live happily. But there are many people whose source of income as monthly paycheck is not sufficient to make all the ends meet. Every now and then some demand crops up and lack of funds don’t support the demand. So people are forced to look for other source of money supply.Bank loans are definitely a great source of money but it has various charges included which many people cannot afford. So they can think of a different source and we can assure that Government grants and loans are a great substitute.Every year a considerable sum of money is kept aside by the United States Government as the accumulation of Government grants and loans which can be provided to those who have high need of money. Such Government grants and loans are generally used as support to various people generally for the purposes like those of social expansion, business growth, and educational purposes for many brilliant students who cannot afford higher studies, and even accommodation for many homeless or aged or backward classes of people.But the problem with Government grants and loans is that not many people are aware of the information solely because no advertisements regarding the subject are made. Also there are many controversies are present where some say that not many categories of Government grants and loans are available and some say the reverse.Such dual view points confuse the common public. In such cases it is advisable for the people who will require money to make their own research rather than listening to other people.The best source is the web and here you can research site of grants.gov and also refer to the CFDA or Catalog of Federal Domestic Assistance that is published by the US General Services Administration. These are the best sources for acquiring all the information of the Government grants and loans.You have to be little patient so that you don’t miss put on any point and loose. Since there are large variety of Government grants and loans you must choose the fitting one for your need. But there are many cheat who are waiting to take advantage. So you must be careful and don’t get into any entrapment.Some other important factors are that Government grants and loans are not available so easily. You have to prove your point of view with proper evidence and testimony and guarantee perfect end results. You must also know how to apply in correct order.All these factors are determinant factors for availing Government grants and loans. You must follow the strict set of laws and regulations and must not use wrongly the money in any way.
Twelve Secrets and Tricks to Buying Life Insurance
Secret #1: Don’t spend too much time on a life insurance quote.Do not be fooled by the low price quotes you get online – they don’t apply to you unless you are extremely healthy. Statistically only 10% of people who apply actually get the lowest priced policy. The premium you end up paying has nothing to do with the initial quote you get online or from an agent. It is amazing to me how often I see people getting duped by an agent who quotes company X at a lower price than another agent.Life insurance policies are the same price no matter who you buy from! One agent or website quoting a lower premium means nothing. Prices for any given policy is based on your age and health. There are a few exceptions to this but that is beyond the breadth of this article.Most life insurance companies have 10-20 different health/price ratings and no agent or website can assure you the quote they give you is accurate. You have to apply, do a health check, and then go through underwriting (meaning you complete a mini-exam with a nurse in your home and then the company checks you doctor records and reviews and ‘rates’ your health) to get the real price of the policy. Remember that a health rating also factors in your family history, driving record, and the type of occupation you have. Only use quotes to help narrow down your choices to the top companies. You may want to consider a no load or low policy. The more that you save on commissions the more money builds up in your policy. You can even buy term insurance no load, and save a lot on premiums. You will not get the help of an agent, which may be worth something if they are very good.The most important factor determining price is matching your particular health history with the company best suited for that niche. For instance company X might be best for smokers, company Y for cancer survivors, Company Z for people with high blood pressure, etc.Secret #2: Ignore the hype on term versus cash value permanent insurance.You can go crazy reading what everyone has to say on buying term insurance versus a whole or universal life policy. Big name websites give advice that I think borders on fraudulent. Simply put there is NO simple answer on whether you should buy permanent cash value policies or term insurance.But I do think there is a simple rule of thumb – buy term for your temporary insurance needs and cash value insurance for your permanent needs. I have read in various journals and run mathematical equations myself which basically show that if you have a need for insurance beyond 20 years that you should consider some amount of permanent insurance. This is due to the tax advantage of the growth of the cash value within in a permanent policy. I am divorced and have taken care of my children should I die. I probably no longer need as much insurance as I now have. I have earned a great return on my policies and have paid no taxes. I no longer pay the premiums, because there is so much cash in the policies. I let the policies pay themselves. I would not call most life insurance a good investment. Because I bought my policies correctly, and paid almost no sales commissions my policies are probably my best investments. I no longer own them, so when I die my beneficiaries will get the money both tax free, and estate tax free.Since most people have short term needs like a mortgage or kids at home they should get some term. Additionally most people want some life insurance in place for their whole life to pay for burial, help with unpaid medical bills and estate taxes and so a permanent policy should be purchased along with the term policy.Secret #3: Consider applying with two companies at once.Life insurance companies really don’t like this “trick” because it gives them competition and increases their underwriting costs.Secret #4: Avoid captive life insurance agents.Look for a life insurance agent who represents at least fifty life insurance companies and ask them for a multi company quote showing the best prices side by side. Some people try to cut the agent out and just apply online. Just remember that you don’t save any money that way because the commissions normally earned by the agent are just kept by the insurance company or the website insurance company without having your premium lowered.Plus a good agent can help you maneuver through some of the complexities of filling out the application, setting up your beneficiaries, avoiding mistakes on selecting who should be the owner, the best way to pay your premium, and also will be there to deliver the check and assist your loved ones if the life insurance is ever used.Secret #5: Consider refinancing old life policies.Most companies won’t tell you but the price you pay on your old policies has probably come down dramatically if you are in good health. In the last few years life insurance companies have updated their predictions on how long people will live. Since we are living longer they are reducing their rates rather dramatically. Beware the agent may be doing this to obtain a new commission, so make sure it really makes sense.I really am amazed at how often we find that our client’s old policies are twice as expensive as a new one. If you need new life insurance consider “refinancing” your old policies and using the savings on the old policies to pay for the new policy – that way there is no extra out-of-pocket costs. We like to think of this process as “refinancing your life insurance” – just like you refinance your mortgage.Secret #6: Realize life insurance companies have target niches that constantly change.One day company ‘X’ is giving good rates to people who are a little overweight and the next month they are super strict. Company ‘Y’ might be lenient on people with diabetes because they don’t have many diabetics on the books – meaning they will give good rates to diabetics. At the same time company ‘W’ might be very strict on diabetics because they are insuring lots of diabetics and are afraid they have too big of a risk in that area – meaning they will give a bad rate to new diabetics who apply.Unfortunately when you are applying a life insurance company will not tell you, “Hey, we just raised our rates in diabetics.” They will just happily take your money if you were not smart enough to shop around. This is the number one area a smart agent can come in handy. Since a good multi-company agent is constantly applying with multiple companies he or she will have a good handle on who is currently the most lenient on underwriting for you particular situation. The problem is that this is hard work and many agents are either too busy or not set up to efficiently shop around directly to different underwriters and see who would make you the best offer. This is a lot harder than just running you a quote online.Secret #7: Don’t forget customer service.Most people shopping for insurance focus on companies with the lowest price and the best financial rating. Unfortunately I know of some A+ rated companies with low rates who I would not touch with a ten foot pole simply because it’s easier to give birth to a porcupine backwards then it is to get customer service from them.Before I understood this I used a life insurance company that gave a client a great rate but 2 years later the client called me and said, “I have mailed in all my payments on time but just got a notice saying my policy lapsed.” It turned out the company had been making lots of back office mistakes and had lost the premium payment!We were able to fix it because we caught the problem so early. But if the client happened to have died during the short period the policy had lapsed, his family might have had a hard time proving that the premium had been paid on time and they might not have received the life insurance money – a loss of hundreds of thousands of dollars in that case.Secret #8: Apply 3-6 months ahead of the time you need the insurance if possible.Don’t be in a hurry to get a policy if you already have some coverage in force. But go ahead and apply right away knowing that you might need months to shop around if the first company does not give you a good rate. Even though the life insurance industry is getting more automated your application will still often be held up for weeks or months while the insurance company waits on your doctor’s office to mail them a copy of you medical records.If you are in a hurry and buy a quickie ‘no-underwriting’ policy without going through the full health checks and underwriting that a mainstream life insurance company requires, you will end up paying 20%-50% more because the insurance company will automatically charge you higher rates because they don’t know whether you are healthy or about to die the next day.Secret #9: Avoid buying extra life insurance through work if you are healthy.I am sure there are exceptions to this “trick” but I have rarely found one. By all means keep the free life insurance your employer provides. But if you are healthy and you are paying for supplemental life insurance through payroll deduction you are almost certainly paying too much. What is happening is that your ‘overpayments’ ends up subsidizing the unhealthy people in your company who are buying life insurance through payroll deduction.Usually the life insurance company has cut a deal with your employer and will waive the required health exam for all employees – instead they just average the price for all the employees and offer one or two rates for males or females at any given age. Life insurance companies know they will pick up lots of unhealthy clients this way so they jack up the price on everyone so that the healthy people end up overpaying so that the unhealthy employees get a cheaper policy. Also, unlike the guaranteed term policies which we recommend, most life insurance you buy through work will get more expensive as you get older.Also group life insurance is generally not portable when you retire or change jobs meaning that when you retire or change jobs you might have to apply all over again even though you will be older and probably not as healthy and risk being turned down for a policy. If the group plan does allow portability they generally limit your conversion choices and force you to go into expensive cash value plans.I remember helping someone evaluate his supplemental life insurance. He was sure it was a better deal than any policy I could find him. Little did he know that the price of his group plan would go up every year? By the time he retired his premium would have risen to over $10,000/year. I found him a policy for around $1000/year that would never go up. Also, unlike his old group life policy, he could take the individual policy with him when he changed jobs or retired.Secret #10: Do a trial application on a COD payment basis.Only send money with the application if you need the life insurance coverage right away. Sending a check with the application is a traditional practice agents used to do – I think mostly because it got them their commissions faster. If you send money with an application you usually get temporary coverage immediately but if you already have plenty of coverage and are just trying to get better rates ask your agent to do a trial application on a COD basis so you only pay once the policy is approved. If you do not send money, and you die before paying for the policy there is no coverage.Secret #11: Wear your shoes when the nurse measures your height.When the insurance company sends out the nurse to do your health check try to be as tall as possible if you are overweight? In most states you are allowed to wear shoes and if you are a little overweight your taller height/weight ratio will look a little better to the underwriter who is determining your health rating and policy price. Also do your exam early in the morning with no food in you – this will make your cholesterol count and various health ratios look the best.Secret #12: Be careful with extra perks and riders.Most policies come with options like accidental death benefit, child riders, disability riders, return of premium etc. If you do the math on most of these “extras” they usually don’t make smart financial sense. Life insurance companies are out to make money and these riders are usually profitable because they either cover something that rarely happens or they are so stringent that the benefit never gets paid out. Keep things simple and focus mainly on getting a life policy to cover your life without many strings attached. Again a good agent can help you weigh the benefits of the extra riders. But be wary of an agent who tries to tack on every possible extra rider.