Before discussing the details of commercial mortgage, a few words would explain what the mortgage is for. A mortgage is a loan that is basically taken for the purchase of home and in this context, home is a collateral or insurance for the loan. This loan or debt has to be paid in accordance with the legal bond along with interest, usually over a period of 10 to 30 years. Mortgage is not actually a debt but it acts as a security for the debt taken. There are different types of mortgages, some of which are, basic home mortgage loans, commercial mortgage loans, Government guaranteed mortgages, bimonthly mortgage loans, balloon mortgage loans, biweekly mortgage loans, equity mortgages, etc.Commercial mortgage loans are the ones that are taken for business purposes rather than for individual resolves and this loan makes use of real estate for payment security. These mortgages are needed to be paid off in small installments on monthly basis, days to a decade and require a balloon payment. Thus, commercial mortgage makes use of balloon or bullet payment and amortization. Balloon Payment is the lump sum amount that is payable after the contract-based years of monthly payment. Amortization refers to distribution of the total loan amount plus the interest into smaller monthly payment as determined by legal pact. The interest for these loans typically remains same for the entire term.Commercial mortgages can be taken for many purposes, namely, purchase of buildings or sites for starting a new business or for extension of the current business. Such loans can also be taken for investment purposes. Commercial loans are very helpful for starting business of carwash, shopping centers, resorts, hotels and restaurants, factories, warehouses, garages, schools, etc.The grant of commercial loans is dependent on many factors. Primarily, commercial lenders take successful businesses into consideration. Normally to measure up to the lender’s expectations, the credit history of the business as well of the owner has to be good and clear. For example, if any workplace has good reputation, a positive credit record and worthy occupants and workers, lenders will definitely be more inclined to grant them the loan rather than to those who have negative track history.Also, commercial lenders keep an account of debt coverage ratio (DCR) which tells about the business income that is required for debt-coverage. Generally, DCR is expected to be between 1.1 to 1.4.For instance, if DCR is 1:1.3, it shows that company will have 1.3 percent income greater than due amount.Some of the commercial loans are graded as NONRECOURSE DEBTS. In this case if the borrower defaults then the lender can only snatch the real estate or property but cannot question for the loss. It means that if the seized property is insufficient for covering up the loan, the difference in the property price and granted loan is a loss for lender.Commercial mortgages are quite similar to the residential ones but commercial mortgages have real estate or commercial buildings as security but they do have few striking differences. Commercial loans are a bit riskier than the residential mortgages so lenders would want more down-payment. Residential loans have lower interest rates than commercial ones because they have low secondary market. Commercial loans are of short duration, typically 10 years whereas the residential mortgages usually go up to 20 to 30 years or even 40 years term. Nonrecourse debts make loan recovery difficult.Second layer lenders play importance in residential mortgage as they buy and sell loans to the chief lenders and do not have any direct interaction with the borrowers. Due to non-issue of direct loans the invest of second layer lenders is secured in risks faced by the commercial mortgage.
Many small companies in the US expect some growth opportunities in the next year. That is the great news! The bad news? Financing opportunities are looking bleak, particularly if the business owner has less than great credit, or a new business. Why would you need to know about financing small business loans? The main reasons for small business financing are to receive working capital and funds for capital expenditures.It used to be that applying for business cash for a smaller business was fairly straightforward. You’d pay a visit to your local friendly banker and talk about your business needs. You’d discuss what you needed and they would help with financing a business loan – yours, to be exact. Then, the financial crisis hit, and banks closed ranks and decided that loans for small business were too risky. Business cash almost dried up. The big losers? Small business owners.Now, we see the result of lack of financing: many small companies are either struggling to stay afloat, or are finding it almost impossible to capitalize on upcoming opportunities. In a recent Year-End Economic Report published by the National Small Business Association, nearly 40% of small businesses report they are unable to acquire adequate means for financing small business loans they deem necessary for their business to continue and grow.What are the options for companies to get the business cash they need? The large corporate bankers and small locally owned banks are not the alternative they have traditionally been. You may feel that your business is a captive being held by the current economic situation and credit crisis. What you may not know is that there is a great source of alternative lenders who can provide working capital for small businesses. It is possible for loans to be secured against cash flow or your accounts receivable. In addition things such as inventory and purchase orders can be considered. Do you own property, machinery or equipment? These things as well may be leveraged to secure loans for small business.What happens when your long time banker tells you there is no money for your business? Don’t give up and think that all is lost. There is help just around the corner for you. Business lending has changed. It may seem a little different to do business on the internet, but that is the new way. You just may be able to get the financing you need when the bankers say “No way.” Asset-based lines of credit may be the way to go in this Brave New World.Typical banks are just no longer willing to extend traditional financing to the small company owner. There are many reasons for this, some of which are tightened federal requirements, as well as skittish investors who only look at the bottom line. These factors combine to make it seem that any loans for business may seem quite impossible. But don’t believe that! There is a whole new world of private banks and small business lenders who welcome your business. Once the level of risk of the business being financed is determined, you may be pleasantly surprised by the rates and terms you may be offered. Take advantage of the growth opportunities for your business. Grow your business just as you’ve dreamed.
The services of mergers and acquisitions advisors are often engaged by business owners for a number of reasons. It could be that they need representation on their plans to sell their existing business or to acquire other companies. It could also be that they need assistance because they want to have a thorough evaluation of a company that they are planning to sell or acquire, they need capital for a business acquisition, or they want to perform business exit planning for the future of their company.Every time you engage professionals who render mergers and acquisitions services, you can utilize their services either on a short-term or long term basis. Mergers and Acquisitions Advisors are compensated based on a flat fee or contingent on the results of an assignment, sometimes referred to as a success fee. Sometimes it can be challenging to find M&A advisors with the right expertise, experience and trust who can best serve your person who can serve as your trusted advisor for your mergers and acquisitions needs. For this reason, you need to consider numerous things before hiring the best firm.First, you have to consider the firm’s expertise and experiences in handling similar cases. Prior to engagement, it will be helpful to get certain facts like the number of engagements they are currently handling, the number of projects they have completed in the recent years, and their success rates in relation to the cases they have handled. It will also be most helpful to ask them to provide you with a list references. This way, you can verify specific information and you can check if their previous clients were satisfied with their services.Next, you need to follow up on the expertise of the firm in providing successful merger and acquisition services. It is critical that they are thoroughly knowledgeable about the industry and the appraisal methods being used to evaluate specific businesses. Ask for personal meetings and ask relevant questions so you can gauge if they are really knowledgeable and can be considered as experts in this field. They should not only be able to answer your questions intelligently, they must also be articulate enough to provide explanations and answers that you will fully comprehend. The best service providers are also expected to do their due diligence before accepting a meeting with potential clients; they take the time to learn about your business and your industry so that they can provide the right inputs during your meeting.Mergers and acquisitions professionals can come from different industry backgrounds; they can be accountants, advisors, business consultants, lawyers, bankers, and entrepreneurs. The most important credential, though, is to have specialized knowledge in contract law, sales, business systems and principals, marketing, negotiation, accounting principles, and business valuation. To provide the best mergers and acquisitions services, it is a big plus if the individual M&A advisor and or firm posses professional certification and participates in ongoing education from reputable professional associations and organizations related to the M&A industry. Certified professionals are normally more knowledgeable and experienced. It is more to your advantage to obtain assistance from certified M&A advisors as they are well-versed in negotiating the sale of a business. Moreover, dealing with licensed and certified professionals means you can expect seamless processes and strategies that can bring about the best results. It means you can avoid going to the battlefield without a well-oiled strategy and battle plan; you are not likely to waste time and precious resources in the process.Lastly, you have to consider the character of the professionals that you will be working with. It is not enough that they are highly experienced and educated; you are working with someone whom you will choose to represent you in many important transactions so this means you have to ensure that you will be working with someone that you can trust and be comfortable with. Choose a M&A advisor and or firm who can professionally represent you and place your interests above everything else. Work with a likable person who can get along well with people and mediate effectively and who can also create a good impression with other parties.Consider all these factors before you make your final choice of a mergers and acquisitions service provider. Doing so will increase your chances of getting the best deal in your our mergers and acquisitions endeavors.
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Many of us feel that investing in a life insurance cover is a big burden. This info is especially for them. Statistics suggest that one in four breadwinners in the UK does not have a life insurance. This is an alarming ratio as the families would be left to live a financially unstable life in the event of the breadwinner’s death. That means almost one fourth of British families live under the risk of facing an economic crisis. As a solution, the support from NHS or other government schemes could be taken. However, all government support may not be enough for the education of kids, rentals, medication for critical illness or other basic facilities.Find here some of the myths associated with buying a life insurance policy:Life insurance is for the man!A survey suggests that 45% of British men and 38% women are insured for a life cover. Again, both the percentages are quite low. Moreover, its general psyche that women who do not earn do not feel the pressing need of an insurance. It was observed by Cancer Research that more than 130 women die every day due to breast cancer. With such an increasing number of women health issues, women should not keep themselves without a life insurance cover. Again 1 in 3 people is likely to suffer from critical illness. This way, life insurance cover is vital for both men and women. Ignoring a life insurance cover could prove fatal as your family would be left with many financial burdens.Contents insurance is enough!Contents insurance is enough! This is another misconception. While we get our car, house, laptops and other accessories insured, we tend take for granted the most important part of the family i.e. its members. Losing a family member especially if one was a breadwinner may result in a sudden financial crux. Your loved ones may need to manage for money required for the daily needs. Thus, even if you have contents insurance it is always important and urgent to buy yourself a life insurance cover. You never know the future but can certainly prepare yourself for the worse.Mortgage cover would do!Mortgage is a common thing in the UK. People who have a mortgage should also go for a life cover so that in case of their accidental death, the insurer would pay the remaining mortgage amount. The facts do not point to any such awareness in the Brits. According to statistics, nearly 50% of people have a mortgage with no associated life cover. All these facts and figures bring out the importance of life insurance. Be it an existing mortgage, a critical illness or death, a life cover helps the beneficiaries to manage the economic situation easily and comfortably. The lump sum amount received from insurer helps in paying for the funeral cost, mortgage, debts or other family expenses.Reasons for a life insurance cover:
To support you in case of a critical illness
To support the family in the event of the breadwinner’s death
To manage funeral and other expenses
For financial support to the family in the future
For paying educational expenses of the kids
For mortgage payments
Who needs life insurance cover?
Anybody who has dependents
Newly married couples
Parents with a new born child
Every family that plans for the future
A retiree with a dependent partner
If you have a mortgage
Types of life insurance covers:There are different types of life insurance policies in the UK. Depending on the age, health and occupation, the life covers are categorised into the following types:Term insurance: This cover gives your life assurance for a pre-decided and specified interval of time. If the policyholder dies within this time frame then the beneficiaries would get a lump sum amount. Otherwise, the policy will lapse.Group life cover: It is provided as part of a complete employee benefit package. This cover is for people who die while they are working with the employer. It is not required that the death should have happened during the work hours or in the office premises.Critical illness cover: This life insurance cover is bought if one has a particular medical condition. If you die due to any other disease or ailment then the policy would lapse.Over-50 plans: Specially designed for people who have crossed the 50 year mark, this cover pays money that can be used for various financial needs of the beneficiaries. As the policy is taken after 50, one can expect higher premiums.Whole of life plan: Offers you cover for entire life. It is the best cover to meet your debts or can be left to a loved one when you die.Reasons why people do not buy life insurance cover:Lack of awareness: If you think that a certain illness or cancer cannot happen to you then you are living in an illusion. With an increasing risk of sickness and critical ailments, one cannot afford to think that ‘this won’t happen to me’. This is lack of awareness and such a biased optimism may turn out to be fatal. A life cover works well for everyone and is much needed by healthy individuals with dependents.Too expensive: The premiums would feel nothing when compared with the cost of your life and the amount of damage your death can cause to your family. A small monthly investment as premium would give lump sum amount in case of the policyholder’s death. The return on investment is much higher as far as life cover is concerned. So, there is no point thinking that it is costly.Government support is enough: Many of us think that NHS and other government schemes would be enough to facilitate the dependents. Well, please check with the friends and family of people who have lost a loved one and who are living on the Government’s support. You will quickly realise that this help is not enough for all the financial expenses of the family. If your partner is suffering from critical illness then the NHS service may not be enough and so, a personal insurance is a must.Better save than insure: Few of us have a mind-set of savings. In their opinion a decent amount of saving can replace a life insurance cover. Savings may not be the best idea as it takes a longer time to accumulate a big chunk of money. For life insurance covers, we may need to pay monthly or yearly premiums but the total amount received in return is much higher than the premiums paid. This way, insurance gives much more return of investment than savings.Considering the pros and cons, a life insurance cover seems much more reliable than any other way of ensuring the wellbeing of the dependents and loved ones. If you have not insured yourself yet then it is high time to get yourself insured so that your demise may not prove fatal for the family. Therefore, do not ignore buying a life insurance cover as it would be the best help to the family in the event of your permanent absence. Isn’t it?
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