Business Protection

what we should know about business loan??

From the Inside Out: What They Don’t Tell You About Commercial Loans

Chances are the corner bakery or the service station on the main boulevard of your town opened its doors on the heels of a commercial loan. If so, the funds would have helped pay for equipment, tenant improvements, beginning inventory, signage, and other typical inputs to a thriving business venture. Most of the entrepreneurs would have submitted a detailed loan package, complete with a business plan and historical financial information.

These are the basic hallmarks of a commercial application. And last year, according to the SBA, more than 103,000 enterprises cleared the approval process, receiving $19.8 billion in commercial credit. But behind the approval is a hidden phase that few entrepreneurs know about. There resides the horror stories endured silently by the “fortunate” few who capitalized their dreams with a business loan, but in the aftermath, faced unexpected challenges surrounding the structure of the loan. This article is written to help navigate around a few of the nasty pitfalls and maximize the funds once approved. Half the battle is knowing key bits of information in time, and the other half is taking defensive steps to protect against them. Due diligence should be a dance between two partners, but too often it is skewed towards the lender. The lender thoroughly checks out the borrower, but the borrower, generally uninitiated in the commercial lending process, does not appropriately check out the lender.

Due diligence from the borrower’s perspective must be an ongoing dialogue of defining and redefining how the credit will result in a successful launch or expansion of the business. When this does not happen, the borrower is left searching for ways to recover from severe miscommunication. Here are a few rules of thumb for conducting borrower’s due diligence Assume nothing. Don’t assume the initial conversations about the possibility of receiving a loan are written in stone. Lenders may present the marketing version of their programs during initial conversations and act on the customary practices at the time the package is presented to the loan committee. Your interest rate, collateral requirements, and loan amount may be very different from what you expected.

If we concern about our long future, Investing in real estate is smart, as a rule, for retirement especially. Long term investments for retirement take time to build equity, if IRA’s Keoghs, or 401K’s. Real estate is not different, but often more accelerated, depending on real estate valuations and location. What we need is a learn about their rule and how to play with real estate which we could learn it from Nouveau Riche. Nouveau Riche (“New Rich”) is institution which there are a lot of Nouveau Riche because of real estate investment. There are several ways to invest in real estate for retirement income.

Investing in rental property can build your retirement portfolio, and the nice thing is, the tenants make the payments on the loan, allowing you to buy much more investment than your allowed income and savings would be allowed in an investment portfolio or retirement account. The down side is, tenants don’t always make their payments, but the mortgage holders always want their payments, so don’t over leverage your future. Start with one rental house or condo, and see how much you like being a landlord. It’s not for everyone. Build your holdings gradually, leveraging the equity in one to purchase the next if necessary.

If you have investment capital, financing home mortgages is a way of increasing your return with little risk. You can hand pick the purchasers, which is difficult for lending institutions. If the purchasing borrower has good credit and is buying solid investment property, you will be getting about twice what a savings account would pay.

Maximizing the financial security and comfort is a matter of long-term investment and planning. Real estate is an excellent way to increase your returns on a portion of your total investment portfolio.

Understand the relationship between you and the loan officer. Your biggest advocate will be the loan officer who pitches your credit to the loan committee. Two things are important here: 1. Pick his/her brains constantly. They know exactly what the loan committee is likely to approve, but they may not volunteer the information. You also want to make sure they are on your side. 2. Give him/her the tools to make a compelling case for your business and for the terms you request. Use awards and visuals to help make the case for why you need a certain interest rate, or payback period, or loan amount.

Leave no room for surprises. Find our early in the process what the terms of the loan will be. Left alone, the interest rate may not be revealed to you until the day you arrive for the signing ceremony. At that point your negotiating leverage is gone. All of the documents have been drawn up to reflect that rate. Be sure to discuss terms with your loan officer before the committee meets so that you understand what is being presented and what will likely be approved. Use this information to adjust your projections before you are thrust in the middle of opening your business. Some potential surprises:

o Payback may begin before you open your business. Some loan programs require that loan payments begin 30 days after closing, regardless of whether or not your business is open and generating revenue. If possible, negotiate these terms ahead of time. If the lender is inflexible about the start date, at least know this before the signing ceremony. You will need to adjust your projections and make provisions to make the payments on time.

o The lender may dole out the loan proceeds in order to assure that expenditures are consistent with approved uses. If construction is involved, they will also want to limit other expenditures in order to complete the project.
Protect you working capital line item. Working capital is not a luxury. It is essential to your success. If you find that your other costs are going up, do not sacrifice working capital. Adjust your loan request to make sure you have sufficient reserves to meet your obligations before you open and after you open when sales are building up to their expected level. Keep discussing these matters with your loan officer as part of your due diligence.

#1: Your initial goal should be to attract as many qualified applicants as possible. A large the pool of potential managers give you the best chance at finding the individual best suited to your needs.
a. Include in your ad a fairly comprehensive list of
requirements. This helps people pre-screen
themselves.
b. Consider placing ads into trade magazines or web sites
that deal with your specific business. It is from
this population that the most knowledgeable
applicants are most likely to be found.
c. If you want to attract a top-notch manager your wages
should be at least competitive, if not higher than the
current salary of others in similar positions.
d. Include as many benefits as your budget will allow.

#2: When looking through the applications be sure that you don’t
miss a great manager only because their resume lacks the
polish that others might have. Some resumes are created by
professionals and may look better than one that was self-
produced by a viable candidate.

#3: When conducting the interview, try to make the individual as
comfortable as possible. Be friendly and welcoming. Most
people are nervous and helping the applicant feel at ease
will go a long way in understanding who the person actually
is.

#4: Be on the lookout for fraudulent information. The statistics
say that a large percentage of applications contain
exaggerated facts and out right lies. Check all references
closely. Check out educational claims.

#5: Look for gaps in employment history. While not always, they
suggest that the applicant has deliberately left out a
previous employer.

#6: Be careful that you are not swept away by an individual with a
great deal of charisma. Obviously the prospective employees
ability to interact with others is of great importance,
however, there are many individuals that are skilled at only
one thing – making a good first impression.

#7: If you are a small business, an absent owner you must protect
your financial interests. Remember if your manager is
handling the accounting, money handling, etc, they
have enough control to embezzle from you. It may spell
financial ruin by the time they are caught. Horror stories
abound, so no matter how well you know the individual, keep
track of your books, do audits and make sure that the
finances are squeaky clean.

#8. Do a complete background check on the person. Have them sign
waivers so that any criminal record can be ferreted out. If
you have the money to invest, a back-grounding service can be
used to talk, in person, to neighbors, previous employers,
references and others. They will also take care of the
criminal history.

#9: One last point: Review your manager after three to six months.
If they are not meeting your expectations, cut your losses
and let the person go. This is too important of a position
for you to settle for second-best.

Do you know what is the heaviest problem in people life? Most of people would answer it with tax, debt and death. Tax and debt is something which we couldn’t avoid it. That is our life’s way, If we don’t want to pay tax it’s mean death is the only solution. And death is part of our life. How about debt?

This article we focus on discussing about debt. Most of every person in this world always have debt’s problem. When get credit card is become easier, and also easier to get many kind of loan because there are big credit company’s competition such as Payday loan, bad credit loan, mortgage, and etc. That’s fact make we easier to making a decision to taking a debt.

Because of too  many company, they release their credit easier to get new customer. With such kind of fact, would we imagine about long future’s effect? their effect is a condition which we called it financial crisis. Many of us has a debt problem and have bad debt.

How to solve this problem? there are a new concept called bill consolidation which mean we could do some consolidation to our debt. Some government release their non profit debt consolidation program to solve their citizen’s debt problem to save their national finance condition. Through some non profit organization, debt consolidation program search and help a person with heavy debt problem. They help them with some solution and finance management to manange their personal finance. Debtco debt solutions is one of government policies to save their citizens from bad debt problem.

What people need is not totally fresh money, personal financial advisor is more important for solve financial problem. It’s useless when someone has a lot of money but they don’t know how to manage it and using in the wrong way.

What os the real requirement for real entrepreneur? Money? no… What they need is a opportunity and experience. Like what old man said to us, experience is the best teacher for us. With a lot of experience we could see problem and trouble as an opportunity. So where is the best place to get experience? if we want to find our experience by ourself, of course working place is the place. But if we don’t want to take a risk with bad experience, we could learn it from others people’s experience. Where is it?

Now there are a lot of education institution which could help us to get a lot of another people experience. One of them is Nouveau Riche, an institution which targeting person who want to be entrepreneur as their students.

Nouveau Riche University offers a wide variety of over 30 real estate investing and business related classes including short sales, wholesaling, fix & flip, business financial management, foreclosures, retirement plan investing, buying out of state deals and more. Of course they also have a lot of professional as their lecturers. Is Nouveau Riche scam? that’s our next problem. Because there are a lot of similar instutition but it’s totally fake. If Nouveau Riche scam, it’s too good to be true. Well after researching the company in depth, I found the exact opposite to be true. Nouveau Riche is a great opportunity for someone looking to get educated in real estate investing. So hard to said that Nouveau Riche Scam

what we need When we want to do something to expand our investment? First answer of course is money… because without money we never could making some investment. What is the second answer? In my opinion what we need is experience and direction how to do some investment.

Sometime we know that doing real estate investment is a investment with very good prospect and very good future, but we afraid to do that because there aren’t someone who could give us some direction and give us their success stories how to do real estate investment.

I have found some organization which could help us and gave us informal knowledge which could help us to solve our problem. Their not just teach you by theory, they also has alumni organization which could share their success stories and their problem when they do investment. People who already success with their investment making an organization called Nouveau Riche, which mean new richman. They share their experience, teach us their success stories.

I think Nouveau Riche is a good example for us to learn about investment world. It is a new concept which in the future has a good impact to build our global economic. Was Nouveau Riche Scam? i don’t think so. If Nouveau Riche Scam, they also couldn’t get any benefit from us. To called Nouveau Riche Scam. i think it’s too good to be true. They could show to us their alumni who still make a contact with them.

Now what we need for get our success story is an experience which we could get it by ourself which mean it also has a big risk to have lost, or get for another people’s experiences. And i think the second one is better solution

Now we talk about Nouveau Riche or we could called it new rich.  Nouveau Riche is a person who starts their career by themself, and because of their hardwork they could reached their success and be a new nouveau riche. As a example today we talked about Indonesian businessman who has built and started his plastic factory and now become Indonesian biggest plastic factory. starting with small industry, “Maspion” now become household’s industry market leader in Indonesia.

We could see his product which most of them were plastic household. Most of Indonesian’s family using his product for their daily activity. We couldn’t find a family which didn’y use any kind of his product. He also feel proud with their company motto. Maspion has a company motto “Pakailah produk dalam negeri” which mean use our country’s product. The main point of his product are because they make good and cheap household equipment. Actually he also has some lux brand which most of them has export target or for international market, not for national market. Why not his national market? Because Indonesian GDP (gross domestic product) is not enough to buy high class product.

With Reasonable price and reasonable quality, Maspion still a plastic market leader in indonesia. So what we need to learn is how to adapt with our market.

Working in an accounts receivable department taught me a valuable lesson: “A sale isn’t a sale until it’s paid for.” Having also worked in costing and drawn plans for business expansion, I would add “A sale that isn’t profitable may be worse than no sale at all. The exception to the latter is when the sale “buys” you a new customer, and then you must calculate the lifetime value of that customer, and all referrals from that customer, to determine if a short term loss equals worthwhile long term gain.

Too many business operators focus on volume, instead of profit. Often higher profit is achievable at lower volume, by raising prices to increase profit margins, improving quality and service, and targeting customers who don’t mind paying a little extra, but look at value over price.

The secret to success is to decide what market you are in, then tailor your policies to that market. If you are in the discount market, selling on price, you must achieve volume and cut back on service, packaging, and other costly extras that eat away at your already small margin. At mid-range prices, you can afford to offer a higher standard of service, packaging, and after-sale support. At the high end, it’s all about offering top quality right across the spectrum. Expect your customers to pay top dollar, but make sure they get what they pay for.

With your product package and pricing formula established, the next step is to build processes that guarantee you deliver what you offer, at the lowest possible delivery cost. Systems often seem unnecessarily cumbersome, but a well-designed set of processes, clearly and accurately documented, is invaluable in a growing business. Your systems should ensure consistency and efficiency, and eliminate the problems that inevitably arise when employees are given too much discretion.

Are you an businessman who always need shipping your transportation tools? and you have a problem to investing your money because there are price different in our home? now, there are some people try to make some cost efficiency with cut their maintenance and operational cost to buying transportation tools. we could do it with using another outsourcing to send or optimizing our cost.

How to do it? it’s sound simple but actually in the fact it’s much complicated than what we heard. Some people using another people or we called it outsourcing to cut our operational cost when we want to buy something in outer far away from our location.

Hat Creek Carriers is one of carrier’s business company which if we want someone help to send our heavy tools like :

• Cars
• Trucks
• Vans
• SUV’s
• ATV’s
• Motorcycles
• Commercial Vehicles
• Classic Automobiles
• Armored Vehicles
• Boats & Campers
• Equipment & Trailers

What they could send is something which too difficult to us to send it by ourself. They could help us to teach how send the auto transport process works and less our risk when something happen to our things because they already give us guarantee for our things, and how they can help to make their experience a good one.

So why we should take a risk when we want to buy something which difficult to send with our resource? we could minimizing our business with moving our risk to another people.