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Archive for November, 2008

SBA 7a loans are the most popular SBA loan program and most basic type of loan structure that is offered to small businesses. As far as who issues SBA 7(a) loans, most banks do participate though some banks do not. There are some non bank entities that do participate with the SBA as well which expands the sources and often loan program options for borrowers.A key distinction is that the SBA only guarantees the bank/lender in case of borrower default. With the 7a program it is 75% of the loan amount. So the issuing bank makes the primary underwriting decision and administers the loan. It is only if and borrower goes into payment default that the SBA steps in and fulfills their obligation to back the lender providing the 75% of the loan amount guarantee. The SBA will not cover banks "imprudent decisions" and or misrepresentation by the borrower or .. more»

Many requirements are usually not met by main applicants but can easily be fulfilled by a co-signer. What one alone can't get, can be achieved by the power of two combined. When you apply with a co-signer, his credit score, income, credit history, assets, etc. are also taken into account at the time of loan qualification and if either you or the co-signer fulfills a requirement, it is considered to be covered by the two of you.Co-Signer: ConceptWhen you apply for a loan with a co-signer, he is responsible for the repayment of the loan as much as you. He is obliged by the same loan terms and is legally responsible just like you. If you fail to meet the monthly payments, the co-signer has to pay the installment since otherwise, the lack of payment will also be recorded into his credit history.Being a co-signer implies risks. If you are .. more»

It is important to understand the process behind commercial loan processing to gain an insight into how a financing institution assesses and decides on whether or not a loan is granted. While commercial loans provide an attractive source of income in terms of interest, lenders exercise a lot of care in evaluating borrowers to ensure that funds lent out are recovered along with the earnings.Applying for a LoanLenders basically pre-qualify potential borrowers by assessing their background and capacity to pay. The process starts by initial gathering of background and personal information such as purpose for the loan, your income and existing debts. To formalize and commence the loan process, you must then fill-up and complete a loan application form.Requirements to ExpectTake note of the documentary requirements that will go with your loan application. This may require some consideration and time to gather. A business loan for example, may require a .. more»

BasicsThe more you pay a lender up front in the loan discount fee the lower your interest rate will be.This may make sense for borrowers who want a very low interest rate over a long period of time.If you plan on keeping your property and mortgage for a very long time this may make sense. You are paying up front for the right to pay less over time.RefinancingOften times this kind of a charge is made in a refinance. The borrower charges this loan disount fee as part of their closing costs. This is using some of the equity in the property as payment to lower the interest rate. In this way the borrower's ongoing monthly payments will be lower. This is a cash flow management tool.Time FrameKeep in mind that many borrowers do not keep their mortgage for very long even though they plan on keeping the property in .. more»