Corporate Business Loans

Corporate business loans are special loans designed for corporations to aid them in expanding, development, or starting up. Corporate business loans are considered one of the most difficult forms of loans to get. Frequently businesses will utilize a business loan broker to help with the process of obtaining these loans. A business loan broker is often able to reduce the amount of time required to get corporate business loans and increase the chances of success for a business. Some factors which are considered by commercial finance lenders include the following:

1. A businesses current credit history. Businesses like individuals have a unique credit history and credit score. This score is based on their history of paying off loans. Factors such as late payments and non payments affect a business’s credit history.
2. The businesses revenue and profit margins over a several year span affect their ability to get corporate business loans. These allow the commercial finance lenders to determine how healthy the company is and how consistently it has made a profit. Businesses which have shown a consistent profit or a steadily increasing profit margin are often able to get corporate business loans at lower interest rates and with more favorable terms and conditions.

If you need to venture out onto the market to fulfill your overall corporate finance needs, you need to focus your attention on those institutions that are offering commercial financing options and opportunities to business enterprises similar to your own. Many lenders involved in commercial finance are not only limiting the dollar amount that they loan but also the type of ventures with which they will do business. By understanding which sources of corporate finance are dealing in your industry, you will be in the best possible position to expand and enhance your commercial finance options.

Getting a Student Consolidation Loan When the Rates Are Low

Amidst the economic recession and the global financial crisis being experienced on a global scale, there is still hope for those who want to get a student consolidation loan. To add to the good news, interest rates on federally subsidized student loans are dropping, so it’s best to catch the momentum to get yourself consolidated for even lower rates.

Understanding Student Consolidation Loan

Consolidation works in this manner: you get a larger loan to cover a set of other student loans so you get a longer repayment period. When that happens, you can either pay the lower monthly bills or try your best to pay the whole debt in a shorter period of time.

The shorter the period of time, the lower the sum would be. The longer it takes to pay it off, the bigger the sum will be. A student consolidation loan works like other loans, but the beauty of the approach is that you can indeed get a lower interest rate.

For example, if you have a Stafford loan at 8.25%, the interest rate will be reduced to 7% upon consolidation. Instead of paying more than $500 a month, you can choose to pay about $350 or less. If the consolidation gives you an ever-lower rate, because rates from Sallie Mae are dropping, you get an even lower fixed rate.

According to Steve Cocks, a spokesperson for the Parent Plus program at Sallie Mae, explains the beauty of getting a loan for financial black holes:

“This will help families when looking at how to finance the next academic year, as tuition bills start coming due, families are wondering how to put the final pieces together, and when they learn of the new interest rates they will realize [loans are] a very attractive financing vehicle for education.”

Why Loans Work?

Loans allow a person to continue with his education even if the financial clout is not present, at least not yet. Financial aids (such as scholarship and other grants) do not cover everything. Say a grant covers the tuition fees, it will not grant lodging, food and transportation. Higher education is not hinged on just formal matriculation but on dozens of other expenses that come about during a four or five year period.

This is why people often end up with debts of upwards $50,000. Some even have the misfortune of having spent more than $100,000 during their college days. The immediate problem after graduation is how to pay off the whole thing without going hungry. Bankruptcy is not the answer – options like student loan consolidation are.

The Benefits of Student Consolidation Loan

The benefits of a student consolidation loan, according to Greg Stringer, the senior vice president of education finance at National City Bank:

“Any loan that is a variable-rate loan will benefit from the fact that we’re at record low interest rates right now. But the real bargain happens to be for students who are extending their repayments by taking advantage of the consolidation program.”

Low rates coupled with beneficial consolidation can extend the life of loans and can prevent a person from defaulting or filing for bankruptcy.

Stated Income Commercial Loans Have Changed

For commercial borrowers seeking stated income commercial loans and commercial mortgages, there have been dramatic changes over the past year. These changes have resulted in more restrictive availability and terms of loans for small businesses based on stated income commitments. Very few traditional lenders are using a stated income process (no income verification, no tax, no IRS Form 4506) for their commercial real estate loans and commercial financing.

This evolution is strongly based on problems that occurred with residential mortgage financing through income statements for the borrower. Whenever there is a financial crisis, lenders may legitimately seek to apply lessons learned to other business areas. In this case, the number of loan defaults which occurred with the stated income residential financing provide a practical reason for lenders to reduce or eliminate stated income commercial mortgages.

One of the major lenders who had declared the income that provides business finance, as well as full documentation commercial loans suddenly stopped doing the small mortgage companies of all sizes and types. While it is clear that this particular lender had a variety of financial problems, his decision to leave the entire commercial mortgage business came as a surprise to most and has already led to direct and indirect impacts on other commercial lenders.

One of these other commercial lenders has reduced commercial real estate loans and the types of property for its stated income commercial mortgage program. For several years this has been a leading provider of national lender financing companies reported earnings. Now have eliminated many restaurants and other businesses from their stated income loan programs. Besides reducing the size of their stated income commercial loans, have also significantly increased credit needs.

Whether through a stated income commercial real estate loan or a business approach based on full documentation mortgage tax returns and financial statements, there is an issue of income that are often overlooked by commercial borrowers. This factor involves the absolute necessity of documenting business income for the necessary assessment. Even with stated income commercial loan underwriting, a business that the document still needed several years of income to support an acceptable level of assessment. For a business loan requiring full documentation of several years of personal and business taxes, the emphasis is usually placed on business income (based on corporate tax returns and business financial statements), which cover loan payments, rather than personal income levels (based on personal tax returns).

Perhaps the only approach to trade finance, where we have not seen changes in the financing of the companies stated income business involves commitments for cash advances based on future programs for processing credit card transactions. For most working capital advances using credit card receivables, tax returns and financial statements are not required. For larger companies cash advances, however, the documentation might be necessary. This represents no change or a more restrictive lending practices such as financial statements and tax returns are also required prior to large transactions.

Whenever there are changes like those noted above which appear to limit the funding options for commercial business owners, it is especially important to discuss trade opportunities with an expert in finance. As we have noted in several reports AEX Working Capital, at present there is a changing series of events (in addition to revisions in stated income commercial financing) to effect the majority of funding for U.S. companies. Many of these problems mean that the strategies of commercial loan is likely to be unknown to most small business borrowers.