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Know Loan, Loan More
Every time we hear the word loan, what is that first thing that comes in to your mind? What is does loan really mean?
Like all the other kinds of debts, a loan involves the redistribution of financial assets over time, among the two parties who are the lender ad the borrower. Usually it is the borrower that accepts or borrows an amount of money which is technically called the principal, from the lender and is the one responsible to pay back the same amount of money lend to the lender at an agreed time. The borrowed money is usually paid in return through regular installments, or partial installments; annually, each is installment has the same amount. The interest which is the cost provided to a loan offers an inducement for the lender to indulge in the loan. Each obligation and limitations in legal terms is compulsory by agreement- either written or verbal form- which can put also the borrower under the additional limitation such as loan treaty.
Below are the types of loans with the corresponding meaning:
Secured loan. A type of loan wherein the borrower promises some asset like a car or a house as a guarantee for the loan
Mortgage loan. This is a type of loan which is very common one that is used by most people in buying housing. The money is use to achieve the property in this kind of contract. However, the institution is rendered a security until the mortgage is paid fully. While if the borrower had fail to paid the loan, the right to possess again the house and sell it is in the hand of a bank just to cover the sums owing it.
Recourse note is another kind of loan that is especially use in limited partnership agreements. It is secured of course by a pledge of collateral, typically real property therefore considered as secured loan but for which the borrower is not personally responsible.
Unsecured loans. Unsecured loans are budgetary loans that are not secured over the asset of the borrower. These are may available loans from financial buildings under various marketing packages like credit card debt, personal loans, bank overdrafts, credit facilities and corporate bonds. In these forms, the applicable interest rate depends on the lender and the borrower. However, these may or may not be arrange by the law.
Therefore make sure you:
1.Always take a walk round the shop and look for the best loan fit in your situation. 2.Ensure that you have read all necessary paperwork and details about your loans. 3.Make sure that you can manage easily the monthly payment or you may find yourself sinking in financial trouble.
Guaranteed merchant cash advance is now a reality.
Merchant cash advance is a form of receivable financing. It is not a loan! In fact due to the cost of the money if it were a loan the only state it would be legal is Nevada. The way it works is that a merchant takes an amount of money and agrees to pay back a set amount, the amount the merchant pays back ranges from 1.33 to 1.49 or for every $1000 you will pay back between $1330 and $1490. Payments are made through “split batching” a process that takes a portion of each days credit card purchases to pay off the set amount owed. The obvious benefit of this type of system is no monthly bills and in fact this is not a credit liability and is not counted in the income to debt ratio.
First Merchant Funding has pioneered a new program to fund those businesses whose owners cant even qualify for the relaxed underwriting requirements of regular merchant cash advances. With this new program only the merchants monthly statements are used to determine eligibility. The amounts available are not aggressive at first but after completing a cash advance successfully that merchant is offered more money on subsequent advances.
Merchant cash advances are not new; this type of funding source has been around for many years. While these funds are expensive they have several advantages over conventional loans. In general lenders want to see the Five “Cs” 1.) Capacity to repay, 2.) Character, 3.) Good Loan Condition, 4.) Capital in his/her business, and 5.) Collateral. It is not unusual for banks to require additional security for new businesses or business owners with less than perfect credit, and not unheard of to put a second mortgage on the family home to offset the risk to the lender. Merchant cash advances are completely unsecured; however, you do sign a personal guarantee. Historically this money has been very attractive to the restaurant industry. The First merchant program is exceptional in that it removes any barrier a business may have to these unsecured funds. Please do not think in terms of the traditional business loan, since the underwriting requirements are almost completely different and not present in the merchant cash advance.
Banks will always look at your past activities and current credit in determining your eligibility for a loan, First merchant funding provider focuses on your past, present, and future credit card transactions. The target market for these loans are usually business owners whose credit score is less than perfect. Thats why Im so excited to be writing this since a bad credit score is not a deciding factor in qualifying you. This is the main difference between this product and a traditional business loan. Furthermore, Merchant cash advance dose not require extensive documentation and oftentimes all you need is 4 months worth of statements, a completed application, and the phone numbers to your landlord.
Thus, you will find it much easier and faster to get a merchant cash advance than a bank loan, usually 24 to 48 hours compared to what could be months with a bank. Pre-approval are obtained within 1 hour. For most business owners, the approval rate of a business loan is very low even with SBA guarantees especially if you don t have excellent credit.