A financing strategy is integral to an organisation’s strategic plan. It sets out how the organisation plans to finance its overall operations to meet its objectives now and in the future.
A financing strategy summarises targets, and the actions to be taken over a three to five year period to achieve the targets. It also clearly states key policies which will guide those actions.
A suggested structure and contents for a financing strategy are outlined below.
1. Where are we now?
This section summarises where the organisation is at the start of the strategy. This includes an assessment of the key risks facing the NGO and the opportunities and resources it has available.
2. Where would we like to be?
This section summarises key financial targets for three to five years’ time, and is informed by the risks and opportunities identified in the first section. It will include as a minimum:
- The desired funding mix – the balance and sources of restricted and unrestricted funds.
- Donor dependency – linked to the funding mix, this is the realistic and appropriate level of funding to accept from donor agencies (expressed as a percentage of overall income).
- Level of general reserves – usually expressed as the number of days that the organisation could continue without external funding.
3. How do we get there?
This is the ‘meat’ of the financing strategy. It describes what actions you will take each year to finance the strategic plan and achieve the financial targets identified in the second section.
This might include sections on:
- how to increase the mix and level of unrestricted funds
- how to finance core costs
- how to build up reserves
- how to replace and maintain fixed assets
- how to apply funds to achieve maximum benefit
For example, actions to increase the percentage of unrestricted income might include:
- increasing or introducing fees for users of services to recover some or all of the costs of providing the service;
- introducing income-generating activities;
- making use of under-utilised resources (eg renting out office space, vehicles);
- increasing the priority given to fundraising for unrestricted funds.
4. Key policies
This section will include policies that guide the financing strategy. The examples given are for guidance only, and may not be appropriate or detailed enough for your organisation.
- Reserves policy – what level of reserves you aim to build up, and how surpluses will be handled.
Example: It is our policy to maintain general reserves equivalent to 6 months of operating expenditure. This policy is reviewed by the Board every three years. General fund surpluses in a given year will be added to this reserve. If the reserve level exceeds the policy level, we will spend it on behalf of the beneficiaries in line with our strategy.
- Core costs policy – what method will be used to recover programme support costs from projects and funders. It will also clarify the policy on subsidising ‘poorer’ projects and how that will be decided and managed.
Example: It is our policy to appoprtion overhead costs to projects on a monthly basis, in proportion to the direct costs incurred by each project. Each project should generate enough income to cover both its direct and apportioned indirect costs, unless the Board authorises otherwise for particular cases.
- Pricing and cost recovery policy – where charges are to be made to service users, this will explain the basis and formula used for the charging, and the pricing structure.
Example: It is our policy to charge users of the clinic for consultation, drugs and lab tests. The basis for the charge is cost plus 10% to cover overhead. Patients unable to pay may apply to our ‘Special Scheme’ for assistance.
- Ethical policy – this will explain who the NGO will or will not accept funds from and what funds may or may not be used for. This will be particularly relevant to NGOs involved in advocacy work.
Example: It is our policy to consider the ethical nature of all funds offered to us before accepting. For example, we will not accept funds derived from any illegal source, or from corporates engaged in arms dealing or child labour. We will not accept funds that create a conflict of interest. We consider each case in line with our values.
Getting a bank loan approved is not the easiest process. In light of recent economic troubles across the nation, lenders are looking for a lot more in a loan applicant and are more strict. While there are several key areas lenders will be focusing on, it is important that you are ready to present the perfect, complete package for review if you hope to get approved.
Here are 5 important steps you need to follow to ensure you bank loan can be processed without problems:
1. Understand your preferences
Before heading to your bank, check out loan packages online and see what competitors are offering. You need to be aware of what kind of loan you are looking for, the terms you can reasonably afford, and your goal for paying off the loan as fast as possible. If you are looking for a specific type of loan (auto, mortgage, personal) make sure you find the best deal for you. There may be many loan offers arriving in your mailbox, but check out the fine print before going further.
2. Ask questions
When you find the loan package you are most interested in, contact the bank directly to find out upfront what the requirements are for loan eligibility. You may need to make an appointment in person to discuss the necessary materials, documents, and timelines you will need to get started on the approval process. Banks have different requirements and it will be important to know what they are upfront so you can be prepared.
3. Know your limitations
If you are pursuing a loan, you should already be aware of your credit history and current score. The bank should tell you the range of credit scores required for loan approval. Plan ahead and request a copy of your history and score several weeks prior to your application. Review your credit history for accuracy and give yourself time to correct any errors in your history report. Lenders today will rely heavily on your past usage of credit. If there are mistakes on your report, you may end up with a lower score which can hurt your chances of loan approval. Consider your financial limitations when planning for a loan. Apply for the loan based on your financial ability to make repayments you can afford.
4. Create a checklist
Based on the information from the bank, it’s wise to create a checklist of the appropriate documentation needed for the loan application. It can take some time to secure the documents you need from creditors, your employer, and other financial resources. Incomplete applications can be cause for loan denial.
5. Have the right expectations
Again, applying for a loan when you’re in a hurry is never a good idea. Loan officers have a certain protocol for approving a loan and getting you the money. During the process, make sure to discuss the sequence of events so you’ll have an idea of when to expect an answer. While some loans can be pre-approved upfront, the specifics may not be known until a few weeks have passed. Ask the loan officers for advice on following up. Your goal will be to secure a loan you have the means to repay. You may also need to outline the reasoning behind the loan. If it’s a personal loan, the lender might want to know how you plan to use the cash, for example, you may need it for home improvements or debt reduction. The loan process can be a frustrating one and if the loan you applied for is not approved, the lender may provide the specific reasoning behind the denial. It can be dangerous to your credit to continually apply for just any loan you think you may be able to get. Too many loan applications can ruin your credit and obliterate your chances of securing one in the near future.
When it’s time for you to retire, will you be able to afford it? Almost all of the research conducted on the subject, over the last few years, shows that most individuals are unable to demonstrate financial readiness for their retirement years. This only serves to underline the fact that saving for retirement is a challenging process that requires careful planning and follow-through. Here we review some helpful tips that should help you on your way to a comfortable retirement.
- Start as Soon as You Can
It is obvious that it is better to start saving at an early age, but it is never too late to start – even if you are already close to your retirement years – because every penny saved helps to cover your expenses.
If you save $200 every month for 40 years at a 5% interest rate, you will have saved significantly more than an individual who saves at the same rate for 10 years. However, the amount saved over the shorter period can go a long way in helping to cover expenses during retirement. Also, keep in mind that other areas of financial planning, such as asset allocation, will become increasingly important as you get closer to retirement. This is because your risk tolerance generally decreases as the number of years in which you can recuperate any losses goes down.
2. Treat Your Savings as an Expense
Saving on a regular basis can be a challenge, especially when you consider the many regular expenses we all face, not to mention the enticing consumer goods that tempt us to spend our disposable cash. You can guard amounts you want to add to your nest egg from this temptation by treating your retirement savings as a recurring expense, similar to paying rent, mortgage or a car loan. This is even easier if the amount is debited from your paycheck by your employer. (Note: If the amount is deducted from your paycheck on a pre-tax basis, it helps to reduce the amount of income taxes owed on your salary.)
Alternatively (or in addition), you may have your salary direct-deposited to a checking or savings account, and have the designated savings amount scheduled for automatic debit to be credited to a retirement savings account on the same day the salary is credited.
3. Save as Much as You Can in a Tax-Deferred Account
Contributing amounts earmarked for your retirement to a tax-deferred retirement account deters you from spending those amounts on impulse, because you are likely to face tax consequences and penalties. For instance, any amount distributed from a retirement account may be subject to income taxes the year in which the distribution occurs, and if you are under age 59 1/2 when the distribution occurs, the amount could be subject to a 10% early-distribution penalty (excise tax).
4. Diversify Your Portfolio
The old adage that tells us that we shouldn’t put all of our eggs in one basket holds true for retirement assets. Putting all your savings into one form of investment increases the risk of losing all your investments, and it may limit your return on investment (ROI). As such, asset allocation is a key part of managing your retirement assets. Proper asset allocation considers factors such as the following:
- Your age – This is usually reflected in the aggressiveness of your portfolio, which will likely take more risks when you’re younger, and less the closer you get to retirement age.
- Your risk tolerance – This helps to ensure that, should any losses occur, they occur at a time when the losses can still be recuperated.
- Whether you need to have your assets grow or produce income.
5. Consider All of Your Potential Expenses in Your Financial Plan
When planning for retirement, some of us make the mistake of not considering expenses for medical and dental costs, long-term care and income taxes. When deciding how much you need to save for retirement, make a list of all the expenses you may incur during your retirement years. This will help you to make realistic projections and plan accordingly.
Saving a lot of money is great, but the benefits are eroded or even nullified if it means you have to use high-interest loans to pay your living expenses. Therefore, preparing and working within a budget is essential. Your retirement savings should be counted among your budgeted recurring expenses in order to ensure that your disposable income is calculated accurately.
7. Periodically Reassess Your Portfolio
As you get closer to retirement and your financial needs, expenses and risk tolerance change, strategic asset allocation must be performed on your portfolio to allow for any necessary adjustments. This will help you ensure that your retirement planning is on target.
8. Reassess Your Expenses and Make Changes Where Possible
If your lifestyle, income and/or fiscal responsibilities have changed, it may be a good idea to reassess your financial profile and make adjustments where possible, so as to change the amounts you add to your retirement nest egg. For instance, you may have finished paying off your mortgage or the loan for your car, or the number of individuals for which you are financially responsible may have changed. A reassessment of your income, expenses and financial obligations will help to determine if you need to increase or decrease the amount you save on a regular basis.
9. Consider Your Spouse
If you are married, consider whether your spouse is also saving and whether certain expenses can be shared during your retirement years. If your spouse hasn’t been saving, you need to determine whether your retirement savings can cover not only your expenses, but those of your spouse as well.
10. Work with an Experienced Financial Planner
Unless you are experienced in the field of financial planning and portfolio management, engaging the services of an experienced and qualified financial planner will be necessary. Choosing the one who is right for you will be one of the most important decisions you make.
Everyone dreams and desires to own car, but the high cost of living made them hard to purchase a new car. However we are really thankful for the car loan financing and this major key for everyone to buy their own dream car. There is wrong conception many of them thinks getting of car loan with bad credit is impossible but gone are these days. In the present scenario, there are many people in the world are with bad credit records because of the economic crises and steps being taken to help these people while obtaining car loan they get more issues. Now it can be possible for everyone even those are having with bad credit score can easily get car loans from the no bad credit checks car loan providers.
Choosing The Right Lender
With good number of loan lenders, it’s simply getting in to the auto industry by everyone and car loan becomes not a difficult to obtain. These days we have enough number of car loan providers, who are around the city, and they made more ease in the process of getting car loans without any daunting. However you need to do little searching for finding the right lender, perhaps it’s not a hectic process that takes more days or months to do the process. Just do searching online and find the options of financing lenders, this is can be done in matter of hours. Even at times the process can takes less than hour to find the best car loan providers.
The process is very simple in getting car loans, but certain things you need to remember before applying bad credit car loan Toronto. Be sure with the amount exactly you want to borrow from the lender and also be sure that how long will you take time to repay the loan amount wholly, these are very important points to consider before taking or applying for loan. Of course there are little paper works included in the process of getting loan, need to provide some essential documents which assures about you for getting loans. Unlike past, the process of getting loans becomes instant, the complete process takes places very quickly and the application of loan form just take few minutes for confirmation of approval. You can easily fill out the car loan application, usually within few steps.
Car Loans For Even Bad Credit People
Whenever you find financial difficulties then can easily get access of loan, for buying cars. However you may find tough if you have bad credit history, but gone are these days the bad credit car loan providers are best option of bad credit scorers. Many people are with low credit rating in their past, they find daunting in getting car loans. Nowadays many of them are surprises with bad credit auto loan providers, without checking poor credit score. If you are with poor credit scores, then search for bad credit auto loan providers in your search engine and find the best one near one.
When you hear the word ‘loan’ the first things that come to your mind are likely to be mortgages, school loans or auto loans. However, you definitely understand that there are lots of other cases when you might need a loan, and this is when a personal loan can help you deal with the problems. Below there is basic information about this type of loans.
What and Why?
Personal loans are also well known under the name of unsecured loans, which means that a lender does not take anything for repossessing. Personal loans Coquitlam experts explain, that the most frequent purposes why people apply for personal loans are funding a vacation, a wedding or some home improvement projects. As you do not give any of your property for a repossession, in this system the interest rate will likely to be a little higher.
What affects the rate of your personal loan?
Credit score. This is the basic thing that should be in the right order when you are applying for any kind of loan and especially personal loans, because your credit score and history will pay the main role in the amount of money you get and the level of interest rate a lender will assign to you. If you need to take a personal loan and feel that there might be some issues with your credit score, check its status and try to higher it.
The size. As a rule, the smaller amount of money you borrow, the higher interest rate you get.
The time frame. If you are applying for a long term personal loan, the interest rate is likely to be higher.
The loan type. At this point it is your decision whether you want to make a collateral or not. People generally offer their house or a car for a collateral on a personal loan,. It does not mean that you have to do this, but if you decide to, you are very likely to lower your interest rate in half. This happens because you give a bank the permission to take your collateral in case you do not make the following payment. You basically lower the risk for a bank not to get its money back and so lower the standards the demand from you.
The institution. There is no secret that the interest rates in different institutions will vary a lot. Depending on the credibility, trustfulness and reliability of a company you will get different numbers. Moreover, different institutions accept different types of borrowers.
There are things like the amount of money you get and the term you are prescribed but you can definitely take care of the place you are applying for a personal loan. Make the proper research in order to find the best company to suit your needs and possibilities.
Where can you get a personal loan?
According to the professionals from easyFinancial payday loans alternative company today there are four main places where you can get a personal loan and each of them has its own pros and cons: banks, credit unions, payday lenders, alternative / peer-to-peer lenders.
Do you need a good technical advice on the flows of stocks and investment? Well, if you think that you are smart enough to handle the ups as well as the downs of the market, you must be set to go. This indeed is something to ask for as investing in stocks may be quite lucky for you. But it is the place where you can carry your own luck if you are smart enough. For this what you have to do is nothing greater than asking for more reference than a genuine investment. If you are smart enough to cope up with the pace of the flexibility, there is much more scope you can land on. As a matter of this what you will have to do is a lot of paper works to get the investment done properly. Indeed there are a few things to look out for when the stock market updates are to be consigned as a matter of fact, you have to be up to the mark in certain things such as:
The correct step of Investment:
The first important thing that you have to deal with is the right step to the investment. This will be something which is a big grasp on the step of investment as you would be liking to deal with. First of all before you get started with the investment, you should be aware of certain factors.
Above all else, when you are taking a gander at stock market tips, you need to see who is giving them. More often than not, you ought to just consider after the exhortation of probably the most fruitful merchants on the planet. In any case, if you need to be fruitful at day exchanging stocks, then you will need to ensure that you pay consideration on the pioneers in the business.
When you are day exchanging stocks, you will likewise need to ensure that you do a lot of exploration on the stocks that you choose. You ought to not just choose a stock out of a rundown at arbitrary. Rather, you ought to invest an extraordinary measure of energy poring over their monetary proclamations and other imperative data. When you do this, you are going to settle on a good choice rather than just speculating which stocks to pick.
You likewise need to choose an essential exchanging system to work with. There are actually a large number of different frameworks out there for you to choose from. Numerous individuals go from one framework to the next while never allowing the first framework to work. If you do this, you are fundamentally going to be shooting yourself in the foot. When you get included in day exchanging Verizon Stocks, you will need to discover a technique that works and stay with it. You can simply get some extra methodologies as you come, however generally speaking; you are going to need to construct the vast majority of your exchanging light of a solitary technique. You would prefer not to be a handyman and an expert of none.
The world of working in human resources is challenging and always changing. There are new methods to consider and new laws the business may be required to implement. Staying on top of what is going on is very important. No matter what type of business it is, the human resources are part of the foundation. If it can’t operate successfully, there will be unhappy employees.
One way to stay on top of it all is with regular human resources courses. They are designed to provide up-to-date information to put into motion. Anyone working in this realm needs to continue to grow and to develop his or her skill set. Such information can also assist with better job interviews and candidate selection. As a result, the business can operate better and with less employee turnover.
Human resources involves presenting the rights of the employees to them. They need to know their benefits, pay structure, obtain their pay history, and get information when they need to take leave or a paid vacation. They also need to have access to information about job openings within the company. They may enjoy working for the business but would love to try another department.
The responsibilities of HR continue to grow based on the lawtoo. Making sure all of the laws are followed is very important. Otherwise, it can open up the business to potential lawsuits and other concerns. Such problems can be very expensive for the business, not to mention that they bring poor publicity.
Finding the Right Courses
There are so many human resources management courses to choose from. With that in mind, finding the right courses is very important. One way to do so is to read the description of what the class offers. The objectives of the class can help you to see if the information is something you need or not.
Finding courses at your level of learning is very important. There are such courses for beginners, for intermediates, and for advanced learning opportunities. The goal should be to work at your level but also to continue to challenge yourself with the classes. Fitting them into your schedule also needs to be considered. The flexibility of online classes, daytime classes, and evening curriculums means it is easier to get it all to fall into place.
Learning about the qualifications of the instructors for a given human resources class is also very important. Their credentials for teaching as well as their teaching style can influence what you learn and whether you enjoy the learning.
Value of the Classes
It is a good idea to take courses that are accredited. This means they meet specific guidelines and elements. You should get a certificate for completion of a given course as proof. If your employer is paying for the courses, they will want to see you completed them and you are making very good process.
If the classes aren’t accredited, it can mean the learning you have engaged in can’t be used for validation purposes. It doesn’t mean you can’t learn from it but it can be hard to prove you have the credentials you need for being in charge of HR or moving into higher ranking HR jobs in the future.
Programs which are accredited have to continue to meet or exceed specific criteria. This criterion ensures the value of the materials is in place. It verifies there are teaching methods used to properly conduct the class in a manner that is easy to learn from. It also verifies the credentials of the instructor, so there is quite a bit of value in this one piece of verification.
If you aren’t sure if a course is accredited, get in touch with the provider and ask them about it. They can provide you with specific information about the accreditation and when they were last certified if it is indeed in place.
The amount of time it takes for the course to be completed should also be evaluated. Some of the courses last for several months and others last for just a couple of weeks. It may be tempting to take a course that ends quickly. However, this often means the information is presented very quickly. You need to be able to stay on top of the assignments and learning requirements. If you already have a very busy schedule, this format may prove to be overwhelming.
The format of the class can also influence the duration you select. For example, many online classes involve online discussions. You will interact with other students and the instructor to determine various outcomes for scenarios that are given with regards to human resources. You already know there is plenty of grey rather than just black and white in this area.
Sometimes, the debates that occur among students can be eye-opening. They can help you to see a side of a human resource issue you hadn’t thought of before. Such information can help you to do your job better. It can also help you to bring awareness to your employer about potential problems that need to be addressed with how the HR pieces are falling into place.
The price for human resources courses can be based on the provider, the materials, thecost of books, format, and other variables. It is important to find out what the cost will be prior to signing up. If your employer is paying, you may need to provide documentation so they can get it paid for on time. They also need the information to verify it was a legitimate business-related expense.
There may be help paying for classes too, so don’t let the cost prevent you from expanding your knowledge base. Talk to the provider of the courses about any types of financial aid or grants. Talk to your employer too, because if they can see the value the course will bring to their business, they may be willing to help you cover the cost of it.
- Think small. It sounds counter intuitive, but it’s true. The fast money is made by investing in micro and nano cap stocks, start ups and extremely cheap stocks that are on the verge of huge success.
- Invest small. Micro and nano cap stocks are the smallest companies traded on the stock market. They are just entering the market or entering a new phase of their life cycle. Find one who’s revenue is about to skyrocket and you’ll be in the money in a hurry.
- Think new technology. Emerging technologies are great places to hunt for the next Google. This is where you’ll find the majority of start ups. Read up on new technologies in their infancy and take a gamble. For instance; if you think bio-fuels have a real future, get in now.
- Catch a wave. Some stocks are just going through an extreme cycle. If you can catch one at the bottom, the ride up will be fast and furious. For example: The American auto industry crashed in September 2008 and was down for months, but the C.A.R.S. government stimulus program gave the entire industry a huge boost. In a very short time period people made lots of money.
Understanding Land Acquisition in Mozambique
- Recruit the services of an English-speaking Mozambican lawyer from a list recommended by the commercial section of your diplomatic mission. You will need to understand from your selected legal adviser how to become the owner of a company already incorporated and registered in Mozambique; this is by far the easiest and quickest way for a foreigner to acquire and hold a land concession with a valid land usage title document, known officially as a DUAT (Direito de uso e Aproveitamento de Terra), in his own name . You should first look for existing companies that may already hold title to land in your preferred vicinity. As land may not be transacted, only the immovable real estate that it contains can be legally sold. Be very clear as to what you want to use the land for. Land already acquired is generally licensed for a specific purpose, so changing its designated usage, for example, from residential to tourism, may not be straightforward.
- Detailed due diligence is absolutely essential, Any existing company that you may consider buying must be able to provide tax and social security compliance certificates plus licenses for any existing land and any partial construction which should also be underwritten by either an environmental license or an exemption certificate. By contrast, registering and incorporating start-up companies is an extremely long process with no real average time-line. The purchase of a ready-made company dictates that land, existing buildings on that land and any other assets are automatically transferred to you as the new owner and you do not need a local partner. You should also check the cost of maintaining a land lease, which varies. Apart from the application fee and the charges for the legal journey through the process, a DUAT ostensibly costs nothing. However, there is an annual land tax payable to the government and occasionally annual compensation for people displacement.
- Assuming that you have found a suitable existing company and it is willing to sell, you must take into account that any construction projects approved for land with a license already granted, especially a provisional stage license, must be completed within two years. It is therefore vitally important to check that any land applications declared by the company you are buying have actually progressed beyond the provisional title stage. In other words, do they have the right to transfer the approval as an asset? If not, you may as well reapply to license the land and any proposed construction projects yourself, once you have bought the company for a lower price.
Also, before proceeding, a serious examination of the original investment plan that supported the granting of the license should be conducted. Submission of an investment plan is a mandatory part of the land application process. Even if you have bought a company without a current land interest but with the intention of using it as the vehicle for a land application, you must provide an investment plan. A positive result on both of these issues is crucial to the future health of your finances.
- At this stage, finance becomes the key. External finance is almost certainly the only option you can pursue, as Mozambique looks to encourage inward foreign investment. In any case, loans from Mozambican banks are generally over short terms. South African citizens, compared to other nationalities, are probably in the best position to raise finances for purchases in Mozambique. They have access to Barclays. Putting a business plan forward to raise capital for investment in Africa would have to be approached with an international bank, already familiar with and holding interests in Africa. British institutions such as Barclays, Standard Chartered and Lloyds TSB do operate in Africa as does Morgan Stanley, which also has an office in South Africa. From a U.S. banking perspective, the continent is under-served; the nearest Bank of America office, for example, is in Greece. Therefore, unless you can secure finance on home ground against collateral and a powerful business plan, self-funding must be considered, but you should certainly approach Africa-located internationals first. Companies for sale in Mozambique probably vary from $300,000 to $1.5 million (U.S. dollars).
- As someone who has previously invested in a wildcat oil well here are some things to look for and to watch out for when you are considering this investment.
First of all, successful oil companies do not usually send out mail outs or place lots of magazine ads searching for investors. The good ones, successful at finding oil usually have a following of loyal investors with deep pockets and don’t need to advertise.
- The fly by night and not so successful companies will usually be the one seeking investors.
It helps to have a friend in the business and network with oil and gas industry professionals to find out who these companies are and make a contact and convince them to let you in as an investor. Ways to meet such people vary but can include through your church, social clubs or fraternal organizations.
The minimum investment that you will usually find will be around $30,000 or more for a small share of the oil wells lifetime revenue.
This would be for a shallow well, say 5000 feet in an area where the drilling is not difficult.
For deeper exploratory wells it becomes big money investor territory with minimum investments of a hundred thousand or more.
- Investing in a wildcat oil or gas well is just slightly better than taking your money to Las Vegas and playing the slot machines. It is a gamble.
The success comes in finding a company that will allow you to invest in a well that is being drilled near other productive wells and in finding a company that has very good seismic information. To buy seismic information is expensive, especially the newer, more accurate 3D type and companies that have had past success in using this technology are the ones you want to find.
If this type of investment is too risky for you consider buying shares of a successful company that is actively drilling in a newly discovered area. An example would be Chesapeake (CHK) which has large holdings in the newly discovered Barnett Shale and Marcellus Formations. These formations are fairly uniform and in many cases pipelines will be laid to wells as they are being drilled because the success rate of making a good well is so high.
For the smaller investor individual stocks are a good choice. If however you want to be even more conservative but still invest in oil and gas exploration consider an ETF or exchange traded fund made up of several oil and gas exploration companies. There are a variety on the market from companies such as Invesco Powershares.
The Real Estate Investor
- A real estate investor makes money through real estate. An active investor that is good at analyzing real estate market values and trends can become rich. Investors use several different methods to turn a profit in the real estate market. This article discusses the following types of real estate investments: development properties, distress properties, fixer-uppers, long-term investments and rentals.
- Real estate investors that specialize in developing properties are often called developers. Developers purchase bare land and build on it. Alternatively, they may purchase land with an existing structure and tear it down to build a new structure, or add more structures to the property. The developer builds on the property and sells the developed property for a profit. A small development can consist of a small plot of land that one house is built on. A large development can consist of an apartment complex, office complex or a retail complex.
- Some real estate investors look for properties that are in threat of foreclosure, are in foreclosure, or have been foreclosed on and are bank owned. These types of properties are called distress properties because the owner of the property is close to losing his home. Investors can often purchase these properties for less than their market value, because the owners are desperate to get out of a property that they cannot afford.
For instance, if the seller purchased a house for $100,000 and has paid off $50,000 of the home loan, he may sell to the investor for $60,000 and lose the majority of the money he have paid into the property. The seller takes the loss to prevent a foreclosure on his credit file. Investors can usually purchase bank-owned properties for a fraction of the market value, because the bank often is just looking to recoup the remaining balance owed on the loan before foreclosure.
- Real estate investors often purchase fixer-upper properties, fix them and sell them for a profit. Fixer-upper properties are usually a quick turnaround investment. The investor purchases the property, quickly has the repairs done by a company like Roofing USA, and instantly puts the property back up for sale.
- Long-term investments are properties that the investor buys and holds on to for a long time. Investors buy the property when the market is down and sell it when the market is high. Another strategy is to buy a property in an area that has very little development and wait for the area to grow in population. Once the population increases and development starts to increase, the property is worth more money and the investor sells it.
- Investors usually rent out properties that they are keeping for long-term investments. The rental income helps to pay for the property while it sits. One strategy that many investors use is to sell a house with owner financing. This is a popular strategy in a down market. Say the investor wants to sell a property, but the market is down. The investor offers the property for sell with owner financing. People with poor credit who cannot obtain a conventional loan through a bank will often overpay for a house that is offered for sale with owner financing.
- Review your credit report to determine if your credit history is strong. A high credit score is required to secure a small business loan. Annualcreditreport.com allows you to receive a free credit report from the three major reporting agencies, TransUnion, Equifax and Experian, once a year. After pulling your report, purchase your credit score. Consider locating a cosigner if your credit score is not high enough to secure the a small business loan.
- Compose a business plan for the lender. A business plan states your objective, financing goals and long term plan for your business. A strong business plan provides the business concept, financial features, achievements and marketing strategy. Give the lender a road map showing how you plan to grow your business. Most lenders require experience in your business. Financial statements are part of a business plan.
- Contact lenders through the Small Business Administration (SBA) about various loans available. The SBA able to provide you with information regarding securing financing for your type of business and what collateral is necessary to obtain the type of loan. Small business loans are secure loans and require assets to back the loan. The amount and type of loan may vary based on the type of business and location. For instance, the SBA offers information about lenders that offer specific loans for small businesses located in rural areas.
- Provide collateral for your small business loan. Collateral is property or assets used to secure a small business loan by providing the lender with the promise to repay the loan or the collateral is forfeited. Find land, equipment or other assets. Generally, for a small business the property or equipment used within the business is offered as collateral to secure the loan. However, personal property with equity, such as your home, land or vehicle, may secure a loan for your small business.
- Provide substantial equity or investment in your business. In other words, a lender wants to know that the loan is only an ancillary, not a main, source of funding.
- Open a stock trading brokerage account if you do not already have one. You can do this online, over the phone or by mail.
- Know your risk tolerance.
You can make money in the stock market with any level of risk aversion. Knowing your comfort level is going to help you sleep at night when you picks the right stocks for you.
If you don’t like risk, stick to the Blue Chips.
If you’re up for some risk go for the emerging technology penny stocks.
- Set goals.
Having specific goals will help you pick the correct stocks for you. Are you investing for retirement, college, a house, etc?
These goals all have different time lines. You wouldn’t pick the same stocks to achieve these different goals.
For a long term goal like retirement, think large cap dividend stocks like utilities. And then make sure to enroll them in a DRIP.
For shorter term goals like a house, you’ll want to focus on more risky growth stocks like the technology sector.
- Allocate funds.
Whether it a lump sum or a monthly amount, you need money in your brokerage account. This makes the money available to invest the moment you want it.
You can set up an automatic electronic transfer if you’re going to invest the same amount every month.
Protect yourself from losing your entire investment by diversifying. This is like buying insurance within the stock market. To truly diversify you’ll want to invest in at least 5 different industries or sectors.
Auto, retail, food, health care, banks, technology, utilities are all examples of different sectors.
- Have an exit strategy– you don’t actually make money unless you sell above what you paid.
Knowing when to get out is the most important step to making money in the stock market.
Whether your exit strategy is based on time, like for retirement or college, or based on profit– like having enough for a house mortgage down payment — you need a plan.
- Take the money and run.
Once you’ve achieved your goals, take the money and use it for your lifestyle.
- Open an account with either an online brokerage or a penny stock firm. If you are not familiar with trading penny stocks, try starting with a penny stock broker. There are also a great many newsletters and sources of research that provide recommendations on penny stocks.
- Trade penny stocks with paper money until you feel that you’re ready to trade with real money. There are many programs that will allow you to do this; take your time until you get a feel for the penny stock market and how it interacts with the larger markets.
- Invest a small amount to begin with. If you can make this amount grow, then you can add to your principal. But protect yourself by limiting your initial investment so that you don’t lose your shirt. Don’t keep pumping additional principal into your account if you lose at first; this is a recipe for disaster.
- Stick closely to your trading program or analyst recommendations and don’t let emotions start dictating your actions. You will need to keep your fear and greed in check in order to succeed at penny stock trading. Most investors are controlled by greed and fear, but speculators who make money can get past these emotions when they make trading decisions.
- Use the profits you make from trading penny stocks to reinvest into the program. This is perhaps the safest way to grow your profits over time. If you clean up on one stock, use the gain to purchase others. This provides you with additional diversification without requiring additional principal.
- Find a broker-dealer who is authorized to sell penny stocks. The SEC requires increased suitability and disclosure regulations by firms selling penny stocks. Ask a professional tax adviser or financial planner for referrals.
- Open the account by filling out an account application, prior investment history and disclosure of assets. The SEC requires each broker-dealer to maintain this “suitability” information as part of the “know your customer” rules. You will not be able to open the account without at least basic financial disclosures.
- Confirm the commission schedule for each transaction. The SEC allows no more than 2.5 percent on each transaction. Commission is negotiable, particularly for larger transactions.
- Fund the account with the amount of money you will be investing. Minimum values are required at some firms, but not all. Ask your broker or customer service representative for details when opening the account.
- Learn the jargon regarding the “spread” when buying and selling stocks. The spread is the difference between the bid price and the offer price. Bid price refers to the value one broker-dealer is willing to buy the stock for from another. The offer price is the value one broker-dealer is willing to sell it for to another. For example, ABC stock may have a bid of $0.10 and an offer of $0.15 with a spread of $0.05. For you to make money, your bid must rise above the spread plus any commissions on the trade.
- Locate resources you can trust. This is often the greatest challenge for those starting penny stock investments because reliable information is often so scarce. Some broker-dealers offer due diligence reports on stocks they hold inventory on as broker-dealers, but you still want to do independent research. Contact the investor relations department of the company and look for any industry journals pertinent to the company and what it offers. Select stock information is also available through online research resources, such as Yahoo Finance or MSN Money.
- Place an order to buy the stock directly with your broker. Plan on holding the stock for a while if there is not a lot of daily activity on it. Invest funds you don’t anticipate an urgent need for since no one may be interested in purchasing your stock when you want to sell.
The Right Qualifications
In general, in order to have the most options for an unsecured loan, you’ll have to meet high standards. For example, to get the best rates possible, you ideally would have a credit score of at least 700. Many banks still will offer loans to prospective borrowers with a lower credit score, but with higher interest rates attached.
You’ll also be asked about your current employment and household income. This helps the bank know if you’ll be able to repay the amount of loan that you’re taking out. If you’re unemployed, you will have a much tougher — if not impossible — time finding an unsecured loan.
Finding the Right Bank
Remember, you may have to shop around a bit before you decide which bank you’re going to use. Some banks, like Wells Fargo, let you apply for a loan online without ever having to visit a branch. Other banks prefer that you visit in person.
You’ll need at least the following when applying for a loan. Check with the bank you’re visiting to see if you need to bring anything else:
Things You’ll Need
Identification, like a drivers license
Identification and contact information for a co-signer if you’re using one
All sources of current income and employment information. Some banks may require that your provide proof of employment.
How much money you want to take out for a loan and the purpose of the loan.
The Application Process
The application process for banks is fairly simple. You’ll either fill out an application online or in person, supplying information about who you are, how much you want, and your current income level. The bank then runs a credit check on you to verify your credit score and check your debt-to-credit ratio. If you match the qualifications, the bank representative will give you a contract to sign that includes the interest rate, how long the loan is for, and any additional terms or fees. Read over the terms carefully. If you agree to the terms, you’ll sign the contract and the money will be deposited into your bank account. The deposit is typically not available immediately, but within 3 to 5 days.
Be on the Lookout
When you’re reviewing the terms of your loan, you’ll want to check for the following pitfalls that might turn a tempting loan into a bad choice. Remember, if you have bad credit, you may need to settle for a few of these negative terms if you really need a loan.
- Make sure all interest rates are clearly explained and you won’t be hit with surprise increases.
- Check your options for the length of the loan. The longer the term, the smaller your monthly payments. However, longer terms also mean that you end up paying more in interest.
- Check when the funds are available.
- Note if there is a borrowing limit or a borrowing minimum.
- Ask if the loan can be for any purpose, or if you’ll need to use the funds a specific way.
- Look out for hidden fees. Some loans, for example, will actually charge you a fee if you pay off the loan early.
What to Do If You’re Rejected by Banks
Don’t despair if the banks you visit all reject you for an unsecured personal loan. You still have other options. For example, peer-to-peer lending is growing in popularity. These companies, such as Prosper or Lending Club, offer unsecured loans at low interest rates for people with good credit. If you have poor credit, your interest rate may be as high as 35 percent or more. Before working with any of these types of services, check their rating with the Better Business Bureau.
Terms of a Typical Bank Loan
Any loan you get from a bank will require you to sign a contract, called a loan agreement, promising to pay back the money. The contract will spell out the specific conditions, or terms, of the loan. These include:
- The principal, or the amount you’re borrowing.
- The interest rate the bank will charge on the loan.
- Whether you are offering any collateral for the loan. Collateral is property that the bank can seize if you fail to repay the loan. With mortgages and auto loans, the collateral is usually the home or car that you borrowed the money to buy.
- The repayment schedule. Usually, you’ll make a series of payments over time, with each payment made up partially of principal and partially of interest. The repayment schedule could cover just a few months or years, as with a personal loan, or it could last for decades, as with a home mortgage.
The federal Truth in Lending Act requires banks to clearly explain the terms of the loan, including how much it will cost you in total interest. State laws may also set limits on how much a bank can charge in interest or other loan terms.
Interest on a Bank Loan
How Rates Get Set
Interest is the cost you pay for the privilege of using the bank’s funds. Banks make money by charging interest on loans at higher rates than the interest they pay on deposits. The interest rate you pay on a bank loan depends largely on two factors:
- The overall cost of lending in the economy.
- How risky the bank thinks it is to lend money to you, specifically.
The first of these has nothing to do with you; it’s determined by larger forces like the size of the money supply, overall demand for loans and a range of government policies. These affect the rates everyone pays. The second has everything to do with you. Banks look at your credit report and credit score to see how well you’ve managed debt in the past; they examine your current income and financial assets; and they look at whether you’re putting up collateral. What they’re trying to gauge is how likely it is that you won’t pay back the loan. The lower the risk the bank thinks you pose, the lower the rate you’ll pay. If you’re a higher risk, you’ll pay a higher rate — this is, if the bank doesn’t simply reject your loan application.
- The interest on a bank loan can be either fixed or adjustable. With a fixed-rate loan, the rate never changes, which means your payments won’t change, either. With an adjustable-rate loan, the rate can go up or down with shifts in the economy. When your rate rises or falls, so will your payment.
What Happens If You Don’t Pay
So long as you make your loan payments as required in the contract, your debt will shrink, and the loan will eventually be paid off. But if you default on the debt — that is, stop making payments — then you’ve got problems. Usually the bank will contact you to see if everything’s all right and to remind you to pay according to the loan agreement. Miss several payments, and the bank will conclude that you have no intention of paying.
If the loan is secured, meaning you have collateral to pay the debt, the bank will seize the collateral, such as by repossessing a car or foreclosing on a home, and then sell it. If it can’t sell it for enough to cover the amount you owe, the bank might be able to sue you for the difference, or sell the debt to a collection agency. If the loan is unsecured, meaning there’s no collateral, the bank might go straight to suing, or turn it over to collections.
Types of Treasury Checks
- The U.S. Department of Treasury issues checks for many types of payments. These include federal tax refunds, Social Security benefits, child support payments, veteran’s benefits and railroad retirement benefits. Regular, recurring benefit payments are issued electronically. However, you may still receive a paper check for one-time payments like tax refunds, or for lump-sum benefit payments.
- If you have a bank account, you can cash your treasury check by visiting your bank and either depositing all or a portion of the check into your account. If you want to receive the entire amount of your check back in cash, let the teller know you just want to cash the check. If you don’t have a bank account, some banks may cash your treasury check for a fee.
Check Cashing Service
- Check cashing stores, such as Advance America, ACE Cash Express and Check into Cash will cash treasury checks for a fee. Fees vary depending on the amount of the check and the state you live in, so call the store and ask what the fee is before you decide to use a check cashing service. You can also cash treasury checks at retailers such as Walmart, and major grocery store chains. These stores also charge a check-cashing fee and may have a limit on the size of checks they will cash.
- If you have a prepaid debit card, you may have the option of loading funds from your government check directly to the card by taking your check into an authorized location. You also may be able to deposit funds to your card by snapping a picture of your check with your mobile phone and uploading it through an app. Depending on your card issuer’s terms, this option may offer immediate funds availability, or it could take several days to credit your account.
- If you receive a check that is made out to you and a spouse, you both must be present to cash the check. If you go to a bank or check cashing service, you each need to provide the identification required. You also will both need to endorse the check. If you make a mobile deposit to a bank or prepaid card, the account you deposit to must be a joint account.
- Make sure that no one is using the Social Security card to obtain credit. Learn about identify theft and monitor credit reports. File a complaint with the Federal Trade Commission.
- Check in with Social Security to make sure that income is being correctly calculated. Have the social security number and employer information available for verification. (See Resources.)
- Print an application to request a free replacement Social Security card. Print the form on plain, white printer paper that is 8 1/2 by 11 inches. Read the instructions carefully and complete the form completely.
- Secure original documents proving U.S. citizenship (a birth certificate, passport or U.S. consular report of birth). Include additional proof of identity, like a driver’s license, state-issued identification card or U.S. passport.
- Take or mail the completed form with all supporting documents to the nearest Social Security office. Expect to receive mail original document by return mail within seven to 10 days. (See Resources for the Social Security Office Locator.)
- Expect to receive the replacement card in two to four weeks from the time of the application. Keep the card in a safe place with other important papers.
- Go to the Social Security Administration’s website and find the bolded heading “Disability & SSI” in the middle of the page. See Resources below.) Underneath this heading are six links pertaining to disability benefits. Click on “Qualify & apply.”
- Read the “Disability & SSI” page, which gives you an overview of the Social Security disability insurance program. It tells you who qualifies for disability benefits and under what conditions. See the “Applying for benefits” section for information pertaining to both children and adults.
- Click on the link “Apply as soon as you become disabled” and select whether you are a child or an adult applying for disability benefits. In most cases, you will be clicking on the “Adult” section.
- Start the application process by clicking on “Adult Disability Starter Kit.” The starter kit provides answers to frequently asked questions regarding disability benefits. It also includes a worksheet to assist you in obtaining all the required information for filing for disability benefits.
- Continue to the second step by clicking on the “online application for Social Security Benefits” link. Then click “Apply for Disability Benefits” and go to the Benefit Application Home Page.
- Answer the required questions and click “Continue” to get information pertaining to disability benefits and get the online Social Security disability benefit application that you must fill out completely.
- Move to the third step after you complete the online application, and give an online medical history and permission for medical records. This is the Social Security Administration’s “Adult Disability Report.”
- Wait to be contacted by the Social Security Administration after you have complete all three steps of the process for disability benefits. The Social Security Administration must then conduct an interview with you before rendering a decision on your disability application.
- SSI presents a problem for car loan applicants because it’s a relatively low, fixed income. Lenders care about your ability to make your monthly payments. On the positive side, Social Security is a stable, reliable payer, and lenders are unlikely to question your likelihood of receiving your income. Your low income can be offset by several factors, including low household expenses and any income from your spouse or other members of your household. It also helps if you don’t have much outstanding debt. This makes creditors feel that you have few competing commitments and are therefore better able to pay.
- Your assets, including real estate holdings, securities and commodities can also influence a lender’s willingness to finance a car. Naturally, if you have collateral or assets that you can liquidate, a lender takes less risk issuing a car loan.
- If you have successfully paid off a car or home loan before, lenders see you as a better risk on a car loan. Your credit card history and any other financing also affect your credit rating. A high credit score may overcome lenders’ concerns about your income and allow you to proceed with a car loan. Don’t be surprised if creditors demand higher interest rates than you may have previous experienced. Your SSI income makes you a higher risk loan recipient, and financial institutions typically require higher profit margins when they take chances.
- Lenders may be more inclined to support your car loan if you can contribute a significant down payment. This shows your commitment to the purchase because you have more to lose by defaulting on the loan. It also means you don’t need as much loan money as you otherwise might. In a worst case scenario, obtaining a co-signer may get you a loan that a financial institution is hesitant to make. Find a friend or family member with good credit and finances to help assure lenders that someone will repay the loan no matter what.
How Dental Insurance Works with Implant Surgery
Each dental implant involves five surgical procedures, each of which has a separate insurance billing code. While most insurers pay 60 percent to 80 percent for a tooth extraction — the first procedure — it’s the type of plan, not the insurer, that determines whether or how much your dental insurance will pay for the four remaining procedures. These are:
- Bone graft — this procedure prepares the bone for the implant.
- Dental implant — this procedure involves placing the implant in the gum and underlying bone
- Custom or Prefabricated Abutment — this procedure involves securing a connector on top of the dental implant
- Abutment-retained Crown – this procedure involves securing the new tooth into the implant
Your chance of not having to finance the entire cost is often better if you have a Preferred Provider Organization — PPO — dental plan. Although most insurers exclude dental implant procedures as a basic or restorative care service, according to Dr. Steven Polevoy, a New York-based family dentist, some plans may foot up to 50 percent of the bill, up to your yearly maximum, if the plan covers implant procedures under the major medical portion of the plan.
Timing with Insurance Coverage
Dental implants usually take about nine months from start to finish. If you can spread the procedures out over two billing years, coverage up to the yearly maximum will double.
Health Savings Account
Dental implants are an IRS-approved HSA medical expense. The “catch” is that you must have high-deductible medical insurance to qualify to set up a tax-free health savings account. According to BlueCross BlueShield of Illinois, the deductible for these plans is at least $1,250 for individual coverage or $2,500 for family coverage. However, you don’t have to maintain dental insurance to fund dental implants with HSA funds. Additionally, the money you invest doesn’t expire at the end of each calendar year.
Credit Cards and Loans
General and health-care credit cards, and personal or home equity loans are additional financing options.
- With a credit card, a balance transfer with an interest-free promotional period can be useful if you can pay the balance before the promotional period ends. If you can’t, the company may charge interest retroactively starting from the first month. According to the Consumer Financial Protection Bureau, this is a common practice with healthcare credit cards.
- Personal loan options include both personal loans and health-care installment loans. Interest rates for these range from about 3.99 percent to more than 40 percent depending on your credit score and the loan amount. According to Dear Doctor, Inc., one advantage a health-care installment often provides is a longer loan term — usually up to 84 months — than a personal loan.
- You can also use a home equity loan or line of credit to pay for dental implants.
- Funding dental implants with a 401(k) or other retirement plan withdrawal is generally not a good option. Although you can withdraw funds to pay for dental implants, the withdrawal will likely not qualify as a hardship disbursement. This means you’ll be responsible for paying taxes and a 10 percent penalty on the money.
- Go to the official civilian DSST website, Get College Credit, for the DSST exams.
- Download the fact sheet for the Principles of Public Speaking exam.
- Read over the fact sheet. As of 2010, the exam consists of two parts. Part 1 is a timed section of 84 multiple-choice questions, and Part 2 judges your ability to actually give a persuasive speech that is around four minutes long.
- Use the “Content” section of the fact sheet to help guide your studying. This section discusses the types of topics that will be covered in the multiple choice section, as well as how best to approach the speech required in Part 2 of the exam.
- Buy or borrow as many of the books or materials mentioned in the “Studying for the Examination” section of the fact sheet as possible. Current editions of Joseph A. DeVito’s “The Elements of Public Speaking” and Stephen Lucas’s “The Art of Public Speaking” are among several recommended. The listed materials are the ones most likely to give you the knowledge base you need to pass the exam easily.
- Seek out feedback from people who have already taken and passed this exam, in order to know what to watch out for or what else to focus on. Forums for students seeking credit by exam, like the one at the website Degree Info, often have feedback from past test takers on this exam. Paid DSST preparation materials are also available from online retailers like Amazon.com, as well as the official website.
- Practice giving impromptu persuasive speeches on a variety of topics to prepare for the test. Also practice with the multiple choice questions located in the fact sheet. According to the DSST exam website, there is no official practice test for the Principles of Public Speaking exam, so don’t waste time looking for one.
- Take your exam. Go through the questions carefully and record your speech. Then prepare to wait for your results and see if you passed. The speech recording must be scored separately, so it can take several weeks to get your results.
- Financial accounting is the process of measuring a company’s assets, liabilities and equity. Management accounting is an internal function that allocates materials, labor and overhead costs to products.
- While financial accounting must conform to Generally Accepted Accounting Principles (GAAP), management accounting is prepared according to management guidelines, since it only reports information to internal users.
- Financial accounting allows outside users to review a company’s financial health and determine if they want to invest in the company. Management accounting ensures all goods or services produced are accurately priced to recover all production costs.
- Companies that fail to implement a strong mix of financial and management accounting may have an imperfect accounting work flow that cannot report the company’s financial information in a timely and accurate manner.
- The Financial Accounting Standards Board (FASB) offers guidance for financial accounting. The Institute of Management Accountants (IMA) is the leading U.S. authority on management accounting.
- Public finance is the study of how money interacts with and circulates within government. Some common public finance concepts include determining tax rates, studying central bank operations and investments, and investigating monetary reform. A example of a project is a country comparison, in which the student investigates the effectiveness of another country’s monetary policies toward the U.S. Such a project is common in international MBA programs.
- Investment finance is the study of how public markets gain and trade money. Concepts such as stock markets and global currency markets fall under this category. Projects typically involve a study of broad financial measures. For example, a project can be an analysis of the Dow Jones Industrial Average during the past five years, which might include a chart of the quarterly Dow results and a study of how different factors, such as booms and recessions, significantly affected the trend of the index.
- Sometimes considered as the indicator of investment finance, business performance is the study of how a business increases its profitability and value. Fundamental concepts include balance sheet analysis and determining financial profitability ratios. These factors are commonly used by potential investors to determine fluctuations in a company’s stock value. MBA students can do the same in their projects. For example, they can research the trend of a company’s past stock prices and current company performance to predict the company’s growth rate and future stock price.
- Corporate finance involves how businesses make investment decisions. There are multiple topics included in corporate finance, such as working capital management and determining financial risk. MBA students can focus finance projects on the completion of return on investment analyses. Completing ROI forms is a required skill in corporate decision-making settings. An example assignment is to evaluate the effectiveness of a project proposal. Given a real time or simulated project proposal, the student would conduct a thorough analysis of different factors, such as cost and opportunity, and decide whether the proposal is worth the investment.
Financing a Personal Residence
- In most cases, you’ll buy the vacant land first if you intend to build a house. Bank policies regarding vacant land vary, but in general banks don’t love empty lots. You’ll need to put more down in order to get your lot loan approved, but you need to do that first for a couple of reasons. It makes little sense to spend money developing a property you may not be able to acquire. The lender is also unlikely to approve a construction loan until the vacant property is secured. While in theory, you can get a single loan for both the lot and the development — in this case, your personal residence — in practice doing everything at once is unwieldy. Most experienced residential builders secure the land before beginning development. Be sure the land is zoned for your use before buying.
Once You’ve Acquired the Land
- Your loan officer wants to see as much data as possible. Your credit record and credit score are both important — the fewer the blemishes, the better. According to Bankrate, a FICO score of 660 or below is considered subprime. The lower your FICO credit score, the more difficult getting a loan will be and the higher the rate. Assuming you’re creditworthy, the bank wants to know everything possible about your building plans. This means developing good architectural plans, and securing firm bids from a reputable contractor.
- Before putting much money into the project, the bank will want to see that your plans have been approved by the city or county building authority. In larger cities, multiple approvals are necessary: one from the planning commission, another from the building department and perhaps a third from a neighborhood homeowner’s association.
Commercial Construction Projects
- Projects with a commercial purpose will get additional scrutiny from your lender, who will want to see data showing that your project is commercially viable. In additional to planning commission approval, commercial developments will generally need to show the zoning commission before lending. The lender will also want to see a pro forma — a spreadsheet showing projected expenses and income once construction is completed.
- In addition to the down payments on the land and on the construction project, be prepared to front a considerable portion of other fees associated with the project. Before your lender initiates the loan you will generally have paid some portion of an architectural fee and various government and regulatory fees, including planning and building department permits and zoning approval fees for commercial projects. In some circumstances, before you can get building plans approved you will also have to retain a structural engineer and a land surveyor. Most lenders require monthly interest only payments on whatever has been borrowed to that date. Some banks take the total estimated interest out of the loan when it is initiated and put it into an impounded reserve account the bank draws on monthly. Whether or not the bank sets up a separate reserve account, anticipate that during construction you will have to pay the interest charges as they accumulate.
Investing small amounts of money is quite easy and can even be automated to the point where you are required to do nothing. Just a few clicks of a mouse or a 5-minute call to a customer service rep, and you can be on your way to investing a small sum of money on regularly.
- Open an account with an investment management company.
Well-known companies such as Vanguard and Fidelity offer quick and easy investment options for beginning investors because they have a wide range of low-cost index funds or actively managed mutual funds that require little to no work on your part after you fund your account. This also allows you to invest small amounts of money on a regular basis without having to pay investment fees.
- Open a stock trading account with an online discount broker. Online discount brokers such as Zecco Trading, eTrade and Tradeking are among the better online brokers. This type of account will allow you to buy stocks, ETFs, mutual funds and index funds for small transaction fees, and some will allow a set number of free trades each month.
- Create a budget so you can save a small amount of money each month or each quarter.
Once you have opened an account and made a few investments, make it a regular habit.
- Store your savings in an account that you will not be tempted to spend from. A high-yield savings account works very well in these situations.
Alternatively, you can adjust the direct deposit payment plan from your employer so the funds are directly transferred into your investment account. Automating your finances is one of the most effective means of saving money.
- Direct your investment management company to invest your monthly savings in an automatic investment plan. You can do this on their website. If you’re new to investing or just like to talk to a live person, call customer service.
- Citi Bank offers two types of personal loans. Personal line of credit is a Checking Plus account with a variable rate. The personal loan is a fixed rate. You can apply for either loan online. The personal line of credit requires a checking account with Citi Bank. The personal loan requires a checking account, savings account, CD or a money market account.
- Citi Bank has a number of choices for each personal loan. If you apply for personal line of credit online, you can borrow up to $10,000. If you apply on the phone or at a branch office, you can borrow up to $25,000. With the personal loan, you can borrow up to $10,000 online and up to $50,000 by phone or at a branch office. There is no application fee for either loan. Most transactions are completed within 3 to 5 days.
- The benefits of borrowing from Citi Bank are numerous. With personal line checking, you can transfer funds from your credit line to your credit account as needed. Payments are deducted each month from your checking account. With the personal loan, you can choose 2 to 5 years to repay the loan. Fixed rates are competitive, and if you sign up for automatic deductions from your checking account, you receive a lower rate.
- If you want a personal loan for education, Citi Bank offers six options. Three of these loans are part of the federal government programs: Federal Stafford Loan, Federal Graduate Plus loans and Federal Parent Plus loans. The other three are CitiAssist loans: Undergraduate and Graduate loans, Health Professional and Residency loans, and Law and Bar Exam loans. The CitiAssist loans take 20 to 25 years for repayment.
- Citi Bank also offers Home Equity loans and Equity lines of credit, money that can be used for most anything. Banking online is easy to set up on their website. You can pay bills, view your accounts, make transfers and send wires. Customer service is available 24 hours a day, 7 days a week. You can also get online banking statements sent to your email account.
- Key Bank’s history goes back to 1825 with Commercial Bank of Albany, New York and 1849 with Society for Savings of Cleveland, Ohio. It was the first bank to operate as “a single, nationwide retail bank” according to their website. It prides itself as being a community-focused bank that offers a wide variety of services.
- Personal loans are a fixed amount of money that is paid back monthly over a specified period. Key Bank offers three types of personal loans: unsecured personal loans, secured personal loans, and home improvement loans.
Unsecured personal loans do not require you to have collateral for the loan. The minimum amount you can borrow is $5,000, and approval is given the same day you apply for the loan. You can access the money through online banking. Rates are competitive and usually less than credit cards.
Secured personal loans have competitive fixed or variable rates. The minimum amount you can borrow is $5,000, and like the unsecured loan, approval is the same day. You can access the money through online banking.
- Some customers prefer home improvement loans to access money for their home projects. Key Bank offers a home improvement fixed rate loan. They also offer three other finance options: home equity lines of credit, home equity loan, and personal line of credit. The minimum amount you can borrow is $5,000. There is same day approval and you can access the money through online banking.
- Key Bank customers, who have online banking, may apply for personal loans online. You must submit an application; include your social security number, email address, date of birth, address, employment information, and a form of identification such as a driver’s license. You must be at least 18 years old and live in one of the thirteen states where branch offices are located.
- Once you have secured your personal loan from Key Bank, you have a number of ways to make payments. Key Bank has automatic deductions from checking or savings accounts, so you don’t have to write a check each month. You can also access your account online to view the balance and transfer funds.
- Contact the bank and find out what their standard LTV percentage is. The LTV percentage of a particular bank will determine how much they will loan on a car. Some banks lend 100 percent, others lend slightly more, and others lend slightly less.
- Find out which assessed value the bank uses. Most banks use NADA values; however, some use Black Book or Kelley Blue Book. Ask whether their LTV percentage is calculated upon the vehicle’s “loan” value, “trade” value or “retail” value.
- Ask whether the LTV percentage includes TT&L (tax, title and license). If it does not, the bank may finance the TT&L on top of the LTV percentage; it it does, the percentage must include TT&L or you may have to pay for it out-of-pocket.
- Look up the value of the vehicle using the same source the bank uses (NADA, Black Book, Kelley Blue Book, etc.), and then determine the appropriate value (loan, trade or retail).
- Multiply the assessed value by the LTV percentage to determine how much the bank will loan on the vehicle. If the bank’s LTV percentage is 85 percent of trade value, and the vehicle has a trade value of $11,500, the bank will loan $9,775 on it.
- Find out if the state in which your business is located considers a liquor license to be intangible property and whether lenders are willing to extend credit based on the value of the liquor license. In some states, a retailer may use a liquor license to secure a loan under certain conditions, provided that the loan has been approved. Other states consider a liquor license to be a privilege and not a property right and therefore do not allow liquor licenses to be used as collateral.
- Inquire about obtaining a loan to purchase a liquor license if you don’t already have one. Depending on the state and municipality as well as the type of establishment, the fees for a liquor license can vary. Licenses must also be renewed annually. You may be able to put up the liquor license itself as collateral for a loan to purchase the license. Naturally, the lender will want to know how much the liquor license is worth.
- Contact a lender to discuss your needs and find out what the specific requirements are in your state. If state law defines a liquor license as an intangible asset, you may be able to use it as security to finance a loan.
- Collect all the required documentation before applying for financing. Be sure to provide a copy of a current state or county liquor license. The lender will assess the value of the liquor license as an asset and advise you if the license can be pledged as collateral to obtain a loan. Be prepared to present bank statements, sales tax returns, income tax returns, general ledger reports and other financial statements. The lender may be more interested in the cash flow generated than in the collateral. If you can prove that business is strong and that there is the potential for increased profitability, you may qualify for financing regardless of the value of the liquor license.
- Be sure your lender includes the liquor license in the description of collateral being used to secure financing. Generally, the lender will request a copy of the license as verification that the borrower is actually the owner of the license. Even though some lenders will use a liquor license as collateral for financing, a primary issue of concern may be whether the liquor license will be renewed. The owner of the liquor license is expected to honor all obligations as required by law. Renewal applications must be filed with the local licensing authority when renewal comes due.
Internal and External Auditing
- The financial accountability of schools is carried out using both external and internal auditing systems. Internal auditing is carried out by the board of education in partnership with the audit committee and the internal auditor. Internal auditing is an on going process that seeks to ensure financial accountability in a school’s daily operations. After under taking an internal audit, sometimes an external audit may be necessary. This process involves an external auditor who assesses financial statements and reports whether they meet the generally accepted accounting principles.
Auditing Committee Members
- The board of education in every school district is required to establish an auditing committee that advises the board about a school district’s internal and external audits. Although no licensing is required, members are required to have a basic understanding of financial reporting and school district finances. To avoid conflict of interest, it is important that the members of the auditing committee are not school employees or directly connected to the board of education in any way.
Budgeting and Financing
- The source of financing for school varies across states and school districts. As a result, different schools have different budgetary plans depending on the resources they have available. The amount of resources made available depends on the value of properties that a state and a school district has in a given year. Schools receive funds on a per-pupil basis so that each student has enough for their education and also to cater to any special education program. Auditing is carried out on the basis of the resources availed and how equitably these have been used.
Governmental Accounting Standard Board
- The Governmental Accounting Standard Board is the principle institution that was created to set reporting standards for state and federal institutions. Public schools undertaking a financial audit are required to comply with generally accepted accounting principles (GAAP) laid out by GASB. These standards enable auditors to understand and use the financial records generated by a school.
Distribution of Service
- Health service distribution in states is associated with the financial understanding of administrators. Understanding how finances and budgets affect the distribution of services is important to develop the highest quality services at affordable prices. Financial training in the health services is lacking, which is causing a lack of functionality at human service organizations.
- Understanding the costs and returns on finance can improve upon the longevity and impact of human services. In human services, financial benchmarks act as a more concrete method of determining which services work and which ones do not. For example, if an organization wants to determine which services are having the greatest impact, they may use financial data to determine the cost and impact of money spent.
- Human services is often based on donations, government budgets and trusts. Human service officials should understand that money spent this year may affect budgets next year. Budget cuts, tax cuts, public support for human services and rising costs can have an impact on future financing. Investors and stakeholders often look over current financial records to set new budgets for next year.
Pay and Financing
- The budget, and how much resources are available, often has a significant impact on pay within organizations. Executives, public officials and administrators are in charge of the budgets, and they must determine the pay of employees as well as services. Therefore, human service managers and employees should recognize how they obtain compensation and how to minimize costs to create additional benefit cushions.
Purpose of Audits
- Audits of a company’s financial statements provide an outside look into the heart of a company’s operations. Audits ensure that financial transactions are recorded properly on company books. While smaller companies may just have one yearly audit, larger companies and public corporations may be subject to numerous audits throughout the calendar or fiscal year.
Types of Audits
- Large companies and public corporations have two types of financial audits for their operations: internal and external. For large companies, internal audits are conducted by accounting staff after the accounting period has ended. Financial statement audits conducted by internal accounting staff do not certify the statements for outside users; the financial statements are considered nonaudited and are usually intended for internal purposes only.
Public corporations face more requirements and regulations for auditing financial statements. Most companies have an annual audit conducted by a public CPA firm registered in accordance with the Securities and Exchange Commission guidelines. Corporations may contract with a smaller CPA firm for internal audits, ensuring that the official public audit will go smoothly.
- After the CPA firm has finished conducting an audit, it will issue an audit opinion with the audited financial statements. An unqualified opinion on an audit states that the auditors believe the company has followed all accounting rules according to the generally accepted accounting principles and the financial information as presented is accurate. Once an unqualified audit opinion is issued, the company’s financial statements are presented as officially audited financial statements.
- When auditors find significant or material errors in a company’s financial statements or accounting information, they will release a qualified opinion regarding the financial statements. This qualified opinion will state the reasons the auditors believe a company has violated GAAP and what internal controls should be improved to correct the information. Auditors will not sign off on the financial statements until a remedial audit is conducted on the company accounting operations.
Importance of Audits
- Audited financial statements are important because they provide an outside look at accounting operations and the overall fiscal health of a publicly held company. Investors rely on these audited statements to determine whether the company is a worthwhile investment and how the company affects the overall business industry. The audited financials also show that no fraud or corruption has been detected in the company and that existing shareholder investment is protected.
- Find the stock symbol for the public company. A stock symbol is a three- to five- letter identifier that is used to place stock buy and sell orders. The symbol can be found on the investor relations page of the company’s website. Other sources of stock symbols are the symbol lookup function on the stock pages of Yahoo Finance and Google Finance.
- Look up the current share price of the company to get an idea of the share value. Enter the stock symbol in the quote box on the Yahoo Finance or Google Finance homepage.
- Open an account with an online discount stock broker. You can complete the account application and arrange to deposit money through the broker’s website. Smart Money magazine provides an annual comparison of the top online discount brokers (See Resources).
- Buy the shares of the public company using the stock trade screen of your online brokerage account. To place a trade you need to enter the stock symbol and number of shares in the indicated areas. Select market order and make sure the order is to buy shares.
- Talk to a real estate agent with sales experience for Wisconsin hunting land. Research available property in the area of interest and locate a property to purchase.
- Contact the seller of the Wisconsin hunting land property and discuss the possibility of owner finance. With owner financing, the seller collects the down payment and the monthly payments. The seller makes money from the interest paid on the loan.
- Talk with family and friends to arrange a personal loan. People with extra money to invest may provide a personal loan to purchase hunting property. The buyer makes a down payment and monthly payments with interest.
- Contact a hard money lender in Wisconsin to arrange a hunting land loan. Real estate serves as the collateral for hard money loans. Interest rates may be higher for hard money loans than loans from banks or mortgage companies.
- Investigate the Farm Credit System in the desired area of Wisconsin. The Farm Credit System is a network of lending cooperatives. These cooperatives provide loans for farms, ranches, country homes and recreational properties.
- Contact a bank or mortgage institution in the Wisconsin area of interest. It is often difficult to find a bank or mortgage lender willing to loan money for bare, recreational land. Consider purchasing land that will be used as a farming operation in addition to hunting; it may be easier to finance farmland.
Understand the Industry
- Getting funding for a construction company starts with understanding the ins and outs of the industry. A construction company must pay for materials, labor and other incidentals before a project starts, yet it doesn’t receive full payment until the project is complete. This cash flow shortfall is one major reason construction companies need funding. The construction industry depends heavily on the current economy; if the economy is down, people are not building and construction companies are not getting any business. And a construction company works project to project, with no guaranteed or stable revenues. To many lenders, this instability is a strike against the construction company.
Find the Right Lender
- Finding a lender or company that specializes in loans for construction companies and that understands the construction business can expedite the loan process. Globelend Capital, for example, specializes in construction funding and allows companies to borrow cash using future revenues as collateral. 1st Commercial Credit and eSmallBusinessLoan work frequently with construction companies, “purchasing” a specific amount of a company’s future sales and requiring the company to pay the money back each month from those sales. These cash advance and accounts receivable loans are ideal for construction companies, because they provide quick, upfront cash and do business with companies that have bad credit, tax liens or judgments. These companies often approve loan applications quickly, without much of the paperwork banks and other lenders require.
Go Through Application Process
- When applying for the loan, the construction company owner should specify what the money will be used for, whether that’s buying equipment, increasing surety bonds or paying salaries. Being as specific as possible helps the loan officer understand why the money is needed and could make him more likely to approve the loan. Lenders typically ask for basic information about the company, such as who owns it and where it’s based, and want to review several months’ worth of bank and credit card statements.
- Construction equipment is one of the biggest expenses for a business that builds things. Equipment leasing companies offer an option for a construction company that might not have the funds for such large capital expenses — especially as the business is starting out. Rather than having to pay large amounts of money in advance to purchase equipment, a leasing company allows the construction company to pay small amounts over time to secure the equipment it needs.
- Debt drawdown can be used in large infrastructure projects, and the amount is based on the estimated cost of building the project. Debt drawdown loans are used in public, private and public-private partnership projects.
- Debt drawdown can be restricted to a specific schedule. The schedule can be measured by project completion milestones or percentage of work completed, or it might be set to calendar dates.
- Money from a debt drawdown may be used only on material, labor and supporting costs of the project for which the loan is intended. Debt drawdown may also be limited to a specific debt-to-equity ratio. Or the money might be allowed to be used only to improve the value of the project or infrastructure being built.
- Identify the costs associated with the project. These are the costs associated with the project from labor, to inventory, to equipment and utilities. Try to obtain estimates where historical data is not available. Determine all monthly costs and then sum for the year.
- Estimate the cash flows received from the project. Projects may not have cash flow in the beginning. In this case cash flows are zero. Estimate cash flows on a monthly basis and then total for the year.
- Calculate how long the project will be able to generate cash flows without another investment or injection of capital.
- Walk through an example to calculate the payback period. Assume the estimated monthly costs for the investment are $500 and the cash flow for the project are $1,000. This means that you are making $500 every month. Assume the initial investment is $5,000. Divide the total initial investment by the monthly profits for the number of months it will take to make back the investment. The answer for this example is $5,000 divided by $500 or 10.
- Analyze your data. You now know the costs, revenues and monthly profit associated with the project. You also know how many months it will take to pay back the investment. Compare the results with other projects in order to help determine the best project.
How to Finance a Home Renovation
- Plan your remodeling project. Before you smash down any walls, plan every single element of your remodeling project and give each element an assessment in importance based on increasing home value or increasing quality of life. Sid Davis, writer for This Old House Magazine, says “Whether you hire a contractor or take on the work yourself, begin with an accurate estimate of what the project will cost. Lenders will insist on a specific figure before they work with you.” When all the costs are determined, you can leave off the least important renovations for later dates if the project could extend beyond your budget.
- Get estimates. Contact construction companies and designers and explain the parameters of your project. Give them the dimensions of the spaces they will be working with and find out estimated project costs. Compare rates from several different companies to arrive at an approximate cost for your project.
- Use the cash that you have in your savings account to get the project off the ground. There isn’t any interest that you’ll have to pay for borrowing this money from yourself, but it could deplete your reserves. Try to avoid taking too much of your reserves. Leave enough savings to cover a few months’ worth of bills and seek financing from lenders for the rest that you will need for your project.
- Investigate Zero-Interest Credit Card offers as an option to pay for your remodeling project. Credit cards offer a quicker financing option than loans. You apply either online or by phone, and you learn whether you are approved within minutes. Credit cards often also offer reward point programs that you can take advantage of. Beware of the danger of high interest and fees that could come back to haunt you long after your renovation project has been completed.
- Apply for a home equity loan. Use the equity built up in the home to finance your remodeling project at generally a lower interest rate than most other financing options. Depleting the equity in the home however, reduces your return on your investment if you have to sell the home before you’ve paid down the loan and the original mortgage.
- Call your lender to inquire about home equity line of credit options. Consumers Union of US Inc., who produces independent Consumer Reports says “This type of financing is best if you plan to do several projects over a number of years.” Home Equity Lines of Credit are similar to credit cards. You can keep borrowing money and paying it back as long as the line of credit is activate. Your credit limit on a HELOC will be based on the equity you have built in your home.
- Consider doing it yourself and getting friends and family to invest their sweat for free. If you have the skills to perform the job, you can save thousands of dollars on labor. Keep in mind that a shoddy job can actually double the cost of your remodeling project; especially if you have to hire someone to fix what you’ve broken.
- Apply for a personal loan. Lending Tree advises that “A personal loan or line of credit may be all you need for a smaller project. The fees to set these up can be lower than those for refinancing your mortgage or tapping your home’s equity.” With a personal loan, you don’t have to worry about having a lien on your house if something were to go wrong and you got behind on the payments.
Cost Benefit Analysis
- Project managers perform a cost benefit analysis when they need to make a project decision. Typically using a spreadsheet tool such as Microsoft Excel, Google Spreadsheets or Quickbooks, they analyze the costs associated with a given investment calculated over a three-year period to generate a net present value, payback and other metrics needed to make a good financial decision. For example, a cost benefit analysis for a training development project usually involves measuring the cost of creating the training materials and subtracting savings generated by personnel operating more efficiently. More complex cost benefit analyses involve multiple costs and numerous benefits.
- Cash flow forecasts help project managers predict whether income will cover the cost of operations. Project managers can download a template from a website, such as the Microsoft Office Templates website, or develop their own format. Then by entering income expected and expenses for each month and comparing the values using formulas, the project manager can prepare a statement to show optimistic or pessimistic cash flow outlook scenarios. Typically a forecast covers one to two years. Cash flow forecasts provide a way for project managers to determine if an activity is a viable option.
- Project managers complete a break-even analysis to determine the level of output at which the money generated by the product or service produced by the project equals the cost of developing it. For example, project managers use free online tools, such as the Project.net software, to maintain a project dashboard and ensure that projects tasks produce output that helps manage projects.
- Project managers use budget tracking software, such as Clarizen software, to determine if project investments make sense over time, after comparing the monetary value both today and in the future. Software tools allow project managers to define hourly rates for resources, customize billing rates and analyze resource usage. These tools and techniques help keep the project on track by ensuring expenditures, such as specialized consulting, software licenses and hardware costs, are allowed within the allotted funding.
What Is Investing?
- Investing is a way to increase the amount of money you have by putting it into financial products. These include bank accounts, money market accounts, stocks, bonds, mutual funds, precious metals and property. Anything that potentially increases in value can be an investment.
- Investing helps you accumulate enough money to pay for something expensive. This can be a house, a car, a college education or retirement. Investing makes your money work for you by growing instead of just sitting there. It is important to invest to keep ahead of inflation. Everything gets more expensive over time. If your money doesn’t grow, your spending power decreases.
Finding Money To Invest
- People often complain that they can’t find the money to invest. However, this is usually a matter of priorities. Investing is essential for financial security. Investments provide money in an emergency, allow you to buy expensive things and let you retire. Many employers offer 401(k) plans that deduct money for retirement directly from your paycheck. This is an excellent way to invest. It is a good idea to reserve a portion of each paycheck for investing. Think of it as another bill and pay yourself first.
Where to Invest
- The simplest way to invest is at your local bank. A checking account allows you to pay your bills while a savings account earns you a little interest. When you accumulate a few thousand dollars to invest you can earn more interest with a Certificate of Deposit or money market account. More aggressive investing involves bonds and stocks. These are often bundled together as mutual funds and can be purchased through mutual fund companies. These types of investments involve more risk but have the potential of much greater rewards over time. Precious metals, like gold, and real estate are investments that compliment an already diversified investment portfolio.
How Long to Invest
- Time horizon is an important consideration when investing. Put money you’ll need right away to pay bills in short-term investments like checking, savings and money market accounts. If you have a few thousand dollars that you won’t need for several months or years, invest in Certificates of Deposit or conservative mutual funds. If you want your money to provide you income, invest in bonds or stocks paying high dividends. If you have long-term goals like a child’s college education or retirement savings, invest in more aggressive mutual funds heavy on growth stocks. A tax sheltered investment like a 401(k), IRA or 529 plan has added tax benefits that increase growth even more.
Risks of Investing
- The more aggressive an investment is, the more likely the value will fluctuate. That means the value can fall below what you initially invested. It is possible to lose much or all of your money in a risky investment. The stock market historically evens out over time. If you have time to wait many investments come back. But some don’t. Consider this and your time horizon before making any investment.
Do your research before applying for a loan. Look into the types of loans available, their rates, benefits and repayment terms. Most likely you’ll want fixed repayment terms, which means your payments will be the same every month for the duration of the loan. Shop around because different banks have different deals for consumers. You want to find the deal that best fits your personal situation.
Prepare a list of questions for the banker that are personalized to you. This will help the bank directly cater to your financial needs and goals.
- The Investopedia website notes that “while there are several key areas lenders will be focusing on, it is important that you are ready to present the perfect, complete package for review if you hope to get approved.”
A good credit history is a huge benefit if you plan to apply for a personal loan. Each bank has a standard range of credit ratings that are used to determine loan eligibility. Find out what your credit rating is through the three major credit bureaus: Experian, Equifax and TransUnion. You are entitled to one free credit report from each of these bureaus every year. A good credit score is around 700. Any lower, and you’re treading in fair credit score range.
Bad credit will make it difficult to get a personal loan. Bad credit scores are generally below 650, but if your income is low and your credit rating is between 650 and 700, you’ll likely have difficulties getting a loan on your own.
Capacity takes into account your income history, current expenses and disposable income. You’ll want to show that you have ample money to pay the monthly payment on your loan and still be able to afford your existing expenses.
There are two types of loans you can apply for: secured and unsecured. A secured loan means you have a property of value like a home or vehicle that can be put up for collateral against your loan. This means if you default, the bank would take possession of your property. This type of loan is primarily used for someone who is eligible for a loan, but who the bank determines is a high risk for default. With an unsecured loan, you don’t need to put up collateral.
- According to Bankrate, “Offering collateral could help you get a lower interest rate on your personal bank loan and in turn save you a great deal of money.”
Capital refers to the amount of liquid assets you own. This includes checking and savings balances as well as investments like 401ks, CDs, stocks and bonds. These assets provide security for the bank because the bank knows that even if you lose your job, you will have access to finances that can cover your loan payments.
Bankers want to know how you plan to use the money. If you plan to go to Cancun for a two-month vacation, you might have difficulty convincing a bank to provide you with a loan. However, if you wish to remodel your home or purchase a vehicle, the bank will be more amenable. Be sure to have a convincing reason for requesting a loan. Know what specific item you plan to buy or remodel, and bring information about its cost and uses to your loan officer.
Step 1: Choose a Lender
Now that you’ve completed your research, choose your lender and set up a time to meet with a banker to discuss your loan. Remember to prepare a list of questions that will help you understand the bank’s application and loan process from beginning to end.
Step 2: Create a Checklist
During your meeting with the bank, create a checklist of required items and actions needed for successful completion of your loan application.
Step 3: Obtain Documentation
Gather all documentation, records and financial information required by the bank for your application process. This process might take some time.
Step 4: Complete the Application
Complete and submit the application with all required backup documentation and information. Once you have double-checked everything, submit the application to your bank.
Step 5: Be Responsive
If your bank requires any additional documentation, be prompt. Although applications can be frustrating, especially if the bank loses some of your paperwork, you will get better customer service if you remain positive throughout the process.
Role of Credit Scores
BoA, like many lenders, considers a loan applicant’s credit score when deciding whether to grant a loan. The bank uses FICO scores, issued by Fair Isaac Corp., to summarize the applicant’s credit history. FICO scores range from 300 to 850, and applicants with the highest scores can receive easier loan approval, lower mortgage interest rates and a smaller down payment requirement from BoA. The bank considers 700 or higher to be a good score, but scores below 620 make it harder to get a loan from BoA.
BoA offers fixed-rate and adjustable-rate mortgages. The bank also offers preapproved mortgages, which are conditional agreements to issue a mortgage for a set amount and with specific terms. To receive a BoA mortgage, you (and any co-borrower, such as your spouse) must fill out an application and provide documentation regarding your job history, credit risk and financial circumstance. Required information includes:
- IRS Form W-2, which reports wages, for the past
- Two recent pay stubs
- Last two months of statements for all financial
- Signed tax returns
- Documentation of self-employed income
- A signed Purchase and Sales Agreement on the
home you wish to buy
BoA may issue a rate lock guaranteeing the interest rate and points it will charge as of the closing date. This protects your from higher interest rates between the time the mortgage is approved and issued. BoA also offers jumbo loans — in which the mortgage amount is $417,000 or higher — as well as mortgages tied to affordable housing assistance programs, and mortgages insured by the Federal Housing Administration and the Department of Veterans Affairs.
Other Home Loans
You can apply to BoA to refinance an existing mortgage. This allows you to lower your interest rate and /or your monthly mortgage payments, or to extract some equity from your home and use the money for other purposes. You do this by borrowing more than your current mortgage balance. You can also convert an adjustable-rate mortgage to a fixed rate one so that your monthly payments are predictable. Additionally, BoA offers fixed-rate interest-only jumbo mortgages, in which you can choose to shell out just interest for a set number of years before you begin repaying principal.
Another alternative is a BoA home equity line of credit, which lends cash secured by your home equity — the value of your home in excess of your mortgage balance. This is a revolving account, meaning you can reborrow money you’ve paid back, up to the credit limit.
You can apply for a BoA auto loan to pay for a new or used car, or to refinance an existing auto loan. The bank makes these loans available in as little as 24 hours and offers a rate discount to borrowers with a BoA checking account, as well as through the Preferred Rewards program. The bank works with dealer networks and can recommend a dealer that will use BoA to finance the auto loan.
- Check your Social Security yearly statement to see what your present monthly SSDI payment would be. The statement will list the present SSDI amount, if disabled. It will also list what amount your dependents will receive.
- Check an actuary table to determine your average life expectancy. Multiply your monthly proposed SSDI amount by 12, then multiply by the number of years stated on the actuary table. This would be your lump-sum settlement amount, minus attorney fees.
- Determine the total amount you would receive in a buyout. Some consider a buyout a gamble. Whether a buyout would be beneficial depends on how many years you will actually live after receiving SSDI. It is a calculated risk between expected payout and expected life span.
- Contact an SSDI attorney. According to Structured Settlement Payouts.com, hiring a lawyer offers the best chance of getting a buyout. The attorney will be able to negotiate the buyout if it is decided it is in the client’s best financial interest.
- Look up the ticker symbol for the company. Go to you favorite investment research site or ask your broker for the ticker symbol associated with the company. A ticker symbol is usually 1 to 5 letters long. Use this symbol to research your company on investment research sites. If the company does not have a ticker symbol, it is most likely privately owned.
- Go to the company’s website. Most companies, private or public, maintain a website that includes financial information. The best document to obtain on the website is the Annual Report. It contains detailed financial documents and a discussion of the company’s financial decisions.
- Use the Securities and Exchange Commission (SEC). They maintain a database called EDGAR (Electronic Data Gathering, Analysis and Retrieval). The database has a listing of all documents submitted to the SEC for public disclosure.
- Contact Dun & Bradstreet for privately held companies. They have a website as well as numerous publications that may be available at your local library. Some of their reports may require a fee to access.
- Contact your broker and have him connect you to the investment research department. Most brokerage houses will provide you with access to their research team and portfolio.
- Enroll in a four-year college or university of your choosing. Focus on courses in financial planning, accounting, business administration and estate planning. If you want to become a finance lawyer working in the corporate environment, take additional courses that deal with mergers and acquisitions.
- Register for one of the approximately 195 law schools accredited by the American Bar Association (ABA). The course of study generally takes three years. Check into attending law school part-time or during the night if you work during the daytime. Sign up for and pass the Law School Admission Test (LSAT). Depending on the entrance requirements at the law school you decide to attend, you may also be required to have experience working as a lawyer as well as complete an in-person interview.
- Practice as a finance lawyer under the guidance of practicing lawyers and law school attorneys. Intern with government financial agencies, corporate law departments and law schools that offer internships. Following internships, register for additional training to remain current and to increase your knowledge as a finance lawyer.
- Check with the state where you will practice as a finance lawyer, as to its licensing requirements. Keep in mind that most states require lawyers to pass a written bar examination as well as a written ethics examination before a license is granted. Confirm whether you will need to complete the six-hour Multi-State Bar Exam (MBE) or the three-hour Multi-State Essay (MEE) Exam for the state you are seeking a license in to consider you as having passed the bar.
- Create a strong and effective resume. Highlight your licenses, internships and other legal working experience. Search job boards, network with alumni at colleges, universities and law schools to locate jobs for finance lawyers that you are interested in. If you want to work at a law office, corporate firm or government agency, contact the head recruiter at the human resources department and set up an interview.
- Search company filings through the Securities and Exchange Commission’s Company Filings Database (see “Resources”). You can search by company name. If your non-profit is traded or has to report information to the SEC, it will be listed here.
- Register for an account on Guidestar or Foundation Center (see “Resources”). You can search non-profits and see submitted financial information, usually collected from public 990 tax forms. It costs money to join the sites, but you can search for the company you’re interested in before registering and make sure that it is listed.
- Look up the non-profit you’re interested in online. Its website may contain a set of financial statements to offer information to people considering donations. Look under headings such as Investors, Financials or Company Profile.
- Search for public financial statements from your non-profit on MSN Money (see “Resources”). You can search by company name on this database as well.
- Contact the non-profit company you’re interested in. Explain that you’d like to see a financial statement and offer the company a compelling reason. With good enough reasoning, you may be able to receive a copy of financial statements for the past few years. If you go into the office during business hours, it has to let you examine its financial statements.
- Write to the IRS. Include the name of the non-profit, the years of information you want and the type of tax return you’re requesting to view. Form 990, filed by non-profits, should give you all the information you need. Send your request to:
Commissioner of Internal Revenue
Attn: Freedom of Information Reading Room
1111 Constitution Avenue, NW
Washington, DC 20224
- Identify any risks that may occur due to the choice of project manager. These risks could range from salary requirements to losing the project manager from other tasks that were taking place. The project manager should be confident in heading the entire project and should be notified about the risks surrounding her.
- Examine the plan or the scope for the project. Identify short term tasks that may cause risks, as well as long term tasks. Each type of task may present its own specific sets of risks. Put a business plan in place to properly assess all project risks involved. Identify how many people it will take and the financial strain it might cause, as well as any changes that will need to take place to complete the project, such as longer hours.
- Identify the impact the project will have on the general business of the company. Is there a risk of losing too many resources to the project? Will it change office policy? Also, will extra training need to be instituted that will cost the company more money?
- Take a look at the financial impact of completing the project. You’ll need to have a budget in place or complete a budget before being able to assess the financial impact of the project. This budget can be a road map identifying financial risks for the project. Take into account the hours necessary and the company resources that you’ll need to employ and get a rough number to use to decide if the project is worth doing. If the monetary risk is too high, the project may be scrapped.
- Identify the structural aspects of the project and what risks they might pose. You may want to take a look at vendors and suppliers, and why working with them may pose a risk. You’ll also need to delegate tasks among your employees, and examine how that might impact business in general.