Basic Steps Needed For Obtaining a Cosmetic Loan For Surgery

Posted by Credit Financing Guru on 1st March 2010

At one time, cash was the only way to pay for cosmetic surgery, but along the way many other methods of payment have come about. One of those methods is financing. However, cosmetic surgeons perform more procedures than just nose jobs and chin lifts. Sometimes there is a medically viable reason as to why someone needs cosmetic surgery. This can be dental work, procedures to remove scarring, or the need to remove an abnormality from the face. Whatever the reason, there are companies offering loans for those wishing to have some sort of cosmetic surgery.

What is needed?

First of all, it is good to make sure there is some kind of collateral just in case. When financing a car or a home, those items can be repossessed if not paid for. As for a cosmetic surgery loan, the lender cannot repossess your face. The lender may ask you to put something you own up as collateral, which means a lien is placed upon that item. It can be a car or some other belonging that is comparable to the amount of the money being loaned for the surgery.

Second, be sure to have such information as what your total income is, what your expenses are, if you own or rent your home, and what your credit rating is. Unfortunately, if you have no credit or bad credit, qualifying for a cosmetic surgery loan might not happen. Most people need to have a credit score that is better than 700 in order to qualify and then there are other factors that can hurt your chances of acquiring the loan.

You also need to figure out how much you can afford each month in payments. Just keep in mind that lenders have a tendency to try and persuade you to take out a loan with a higher monthly payment to save on interest. Consider this carefully because a high monthly payment increases your monthly expenses exponentially and can hinder you from being able to take out other loans in the future until the current loan is paid off.

Where to apply

There are many financial institutions that offer financing for cosmetic surgery. Simply go online and see how many there are. With cosmetic surgery being so popular, many of the lenders have cashed in on the advantages by offering financing, which means that cosmetic surgery is no longer for the rich and the famous. Your friend down the street who makes $45,000 a year and has an excellent credit rating can have that bump on her nose fixed or get the breast implants she always wanted. If you’ve ever looked at someone and asked, “How did they afford that?” Chances are it was because they financed their surgery. However, they hopefully did the adequate research to find the right lender for them.

Every lender is different in interest rates and such, so it is important to find the right one for you. Once you find them and are ready to fill out the application, you will notice that the application process is more or less like any loan application. All you have to do is fill out that application with the information you gathered about your income and expenses as well as basic information about yourself, and then submit it to the lender.

You will receive a decision back just like you do with any loan. You will either be approved or denied. If denied, some surgeons may offer installment options. Then again, it is important to go through the research phase again and see if you can find some medical financing. Just because one says no doesn’t mean the next one will.

Credit Medical offers medical financing for elective procedures such as breast augmentation financing, cosmetic surgery loan and more.

Cosmetic Surgery Loan FAQ:

Question: Is it possible to get a loan for cosmetic surgeries? Breast augmentation and tummy tuck?
If so, how much would the monthly payments potentially be for $15,000 or so?

Answer: Almost all plastic surgery centers will set up a payment plan that suits you, the same way as if you were buying a car. The monthly payments will all depend on what kind of loan you decide to take out and thus depending on the time (ie 5 years) and the APR (Annual Percentage Rate). It will also depend on how much you have to put down as a downpayment and some offices may require that you have at least 10%, so in your case that would $1500. I can’t really answer this for you since I do not know how the plastic surgery’s office handles these things. Make an appointment for a consultation and they can give you all that information free of charge.

Question: How do I tell my mom I want cosmetic surgery?
I also need to ask her to help pay for it. I’m applying for a loan and I’m hoping that she will take over 50% of the loan. That will about $200 a month for her. She offered to pay for braces for me, but I’d rather the cosmetic surgery instead. I don’t know how to tell her I want it, I guess because I’m sort of embarrassed. I’m old enough to get it (18) so I don’t technically need her permission or her “blessing” but I”m still living under her roof, and what she thinks means a lot obviously, because she’s my mom.

Answer: Just tell her honestly and explain to her why you want it done, that’s all you can do really. However it is not her responsibility to pay for your surgery. You’re not really ready for cosmetic surgery, until you are in a position where you can pay for it yourself. Seek advice from others as well as your mother, not money, and do a lot of serious thinking before you go too far. Even tattoos are often things of regret.

Question: Is it possible to get a cosmetic surgery loan with bad credit?
I’m trying to get cosmetic surgery but it costs about $4000. With my credit I probably have to pay in full. But it seems like alot of people I know get cosmetic surgery all the time and I don’t think their credit is all that great. What are my options?

Answer: Most banks will not lend to you cause they don’t offer a product for that. They will recommend a Credit card or a personal loan if they offer it. Due to the hard times most banks have gotten rid of personal loans. I would recommend talking to your current bank if they have it. I know Chase doesn’t have them. But some doctor offices have a particular lender to help you with a loan.

Question: Can a Canadian go to New York to get cosmetic surgery?
Can you still get a loan for surgery if your not in your country?

Answer: You would have to borrow money while in Canada with a loan or line of credit. Perhaps the doctor you are seeing can help with financing. I would ask them.

Question: Would you take out a home equity loan for cosmetic surgery?
I want implants and I don’t want to wait for them any longer. I don’t want to get a credit card or anything because I have two I am trying to pay off. Would it be foolish to take a home equity line of credit?

Answer: Sorry, but putting that sort of debt against your house is not a good idea.
It sounds to me like you can’t afford that new set of boobs. Once you pay off your debts, start saving up your money and when you have enough cash, then get the boob job.

The whole attitude of “I want them and I don’t want to wait for them any longer” is the mentality that has caused so many people in this country to be in such a financial mess. Being financially responsible and living within your means without a mess of debt will make you feel better about yourself than any set of bigger boobs will.

Question: How to get a loan for cosmetic surgery with poor credit?

Answer: Cosmetic surgery is a want, not a need. You should never borrow money for a want. Open a bank account and save up for it. It will cost you less in the long run.

Question: Can you get a loan for cosmetic surgery and about how much would monthly payments be?
I want to get vaginal tightening surgery done, it IS a cosmetic procedure and my insurance obviously does not cover it. The procedure will be about 14000 in total. Could I get a credit card and put the 14000 on there, and about how much would those monthly payments be? Or could I get a loan instead, and also ABOUT how much would the monthly payments of that be?

Answer: You know you could always go to the banks in town; both local and corporate based (Wellsfargo, Bank of America, etc). They can tell you how much they can loan you and what their rates would be. They could also give you information about opening a credit card; and they can tell you how much monthly payments would be with interest. Without knowing the specifics of your income and credit history, I couldn’t say, plus your area of residence can go into consideration. Be careful with out of state credit cards and “local” banks. Some “local” banks are actually being run through out of state banks and they have some pretty messed up fine print. Also, some plastic surgery places have their own financing. You may want to check into it.

Question: Can you finance your cosmetic surgery thru the office or do you have to pay up front and / or get a bank loan?
I plan on losing about 100lbs over the next few years (fingers crossed). I’m sure I’ll want to get excess skin removed and probably a tummy tuck since I’ve already had 2 kids. I was wondering how they work out payment. Do you have to pay up front? Do they finance?

Answer: I know there’s also a LOT of plastic surgeons who finance-in fact, most do. They know a lot of their patients come from middle class citizens that don’t have money falling out of our pockets! I think some may require a down payment, depending on your credit situation.

Categories: Surgery Financing
3Mar

What’s the Catch on Plastic Surgery Loans?

Posted by Credit Financing Guru on 1st March 2010

Plastic surgery is a fast growing industry and many more people today are opting for surgery to enhance the body and turn back the signs of aging. Television shows and advertising, easier accessibility to surgery and increased social acceptance are just a few of the many reasons why the industry continues to grow so rapidly. Another reason for an increase in plastic surgery is the many financial options now available to potential patients, which includes plastic surgery loans. This makes surgery a possibility for many who previously could not have afforded such a luxury.

As medical insurance does not cover cosmetic surgery, those desiring these types of procedures must find ways to pay for the high costs involved in medically unnecessary surgery. Plastic surgery, such as breast augmentation, rhinoplasty or abdominoplasty, can cost upwards of $7,000 to $10,000 to cover surgeon fees, hospital or facility fees and anesthesia, if not more. Many financial companies now cater to the industry by offering specialty loans, often directly through plastic surgery offices and clinics, which are designed specifically with potential cosmetic patients in mind.

Plastic surgery loans do make it possible for many people to have cosmetic surgery that may otherwise be unaffordable to them. However, cosmetic loan companies will often offer a high line of credit to those who would not otherwise quality for a financial loan, which encourages debt that cannot truly be afforded for unneeded services. They also tend to have extremely high interest rates that typically range from 14% to 20% with some loans with rates as high as 30%. The patient will also be responsible for loan processing fees in addition to the original loan amount that generally range from 5% to 10% of the borrowed amount. Your surgeon’s fee may also be higher than it otherwise would have been to make up for his or her costs incurred to the loan company for their services.

There are other downsides to the ease of plastic surgery loans as well. Often plastic surgery offices will work directly with lenders offering cosmetic surgery loans and encourage their patients to apply and use their services. Many times patients are approved for these credit lines in the office before even leaving from their initial consultation visit. This may cause some to choose to go ahead with surgery right away that may not have otherwise before taking the time to think over the seriousness of major surgery. This is especially true in the plastic surgery industry as many seeking cosmetic surgery consultations are already highly self-conscious about their appearance, which makes them more vulnerable to the option of a quick and easy loan.

If you are considering plastic surgery, be sure you choose a surgeon with at least five years of additional surgical training as well as several years of certified experience. You’ll also want to make sure your surgeon is a member of the ASPS. You need to be well informed about the procedure you are considering and the surgeon you are choosing as well as informed about the financing options that will most likely be presented to you.

Be sure you are aware of all conditions and terms of any plastic surgery loan you are considering before agreeing. You’ll need to be sure ahead of time that you can afford these types of high cost loans and must be prepared for the additional financial burden it may bring.

Credit Medical offers affordable plastic surgery loans. It provides patient credit for for elective medical procedures such as cosmetic dentistry financing.

Plastic Surgery Loans FAQ:

Question: Plastic surgery loans?
I am 17 and I really want plastic surgery. I don’t however have the financial support to fill this desire. I wish to get a lip lift and rhinoplasty, could I get a loan once I turn 18?

Answer: No banker with any sense is going to give you an unsecured loan for that much money. Unsecured means you have nothing of value the bank could take IF you don’t repay your loan. When you don’t pay your car loan they take the car. They can’t take your face.

Question: Is it possible to get plastic surgery at 18?
Is there a cosmetic plastic surgery loan that they would let an 18 year old take out?

Answer: Have you fully thought through the potential dangers of the process? This is something you can’t undo, so you want to give it proper thought in the first place. Not only would you be going into debt, but you are putting your body on the line. You do not need consent to have the surgery done, but for loans, it will depend on your credit and job.

Question: What if you don’t pay a PLASTIC SURGERY loan?
I’m planning to get a nose job using a finance company that finances anyone regardless of their credit score. My score is bad and they are the only guys that have accepted me. I’m just wondering, what if the nose job comes out bad or botched? If I didn’t pay the loan would I be sent to jail or what?

Answer: Getting a botched-up surgery is the risk you run when you decide to have unnecessary operations. Personally I would strongly advise you to rethink – especially as your financial situation is less than peachy. If you don’t pay the loan, they can sue you and garnish your wages.

Question: Loans for plastic surgery for bad or no credit with out a co signer?

Answer: Just an observation, (unless the surgery is medically necessary), if you already have bad credit, why make it worse by getting a loan and being more in debt? If you have bad credit, you probably could not get a loan without a cosigner.

Question: Can you get a plastic surgery loan with a credit score of 674?

Answer: Probably not, but you might be able to get a personal loan in the range of maybe $5,000 to $10,000 especially if you have collateral such as a house.

Question: Where is a good place to get a plastic surgery loan?
I am trying to get a boob job but I need a loan to help me out.

Answer: Don’t get a loan. If you can’t afford to pay for it you shouldn’t get it. Get a loan for something that will increase in value, like a house.

Question: Plastic surgery?
Can you take a loan out for plastic surgery? And can you make payments on plastic surgery? Also how long does plastic surgery take to completely heal?

Answer: There are some companies out there that will foot your bill. Be wary though. My girlfriend used Doctorssayyes.net and there is breast aug usa. Depends on what surgery you get is how long it will take to heal. Lipo takes up to 6mos-1year before you see results. It’s painful and you have to wear a really tight spandage. Breast augmentation- you can do it on thursday and go back to work on monday provided that you don’t do any heavy lifting. It takes a while to see what size you end up because you have to heal. You want to do research and the doctor you choose should be board certified and have pictures of his/her work. You should find one who is about you and not about the dollar and will do your procedure and not overdo your procedure.

Question: Plastic Surgery loan? (college student, female)
I am thinking about having a cosmetic procedure done. Rhinoplasty (nose job) to be exact. I have found out that there are loans available. My only problem is will I qualify for one if I am a college student (20 yrs old) with no job (but my parents help me out financially, so I would have the means to pay the loan back with). Does anyone know if it would be possible for me to apply and get a loan like that? (My parents will certainly refuse to get one for me, so I don’t even need to go there, they’ve told me so)

Answer: Probably not unless your parents cosigned the loan, which you said they wouldn’t do. Be careful when choosing a lender for your loan because I have heard that the interest rate on those loans are outrageous. I would recommend you save your money to pay for your surgery. I know that isn’t what you want but it may be best for now. And by the time you have saved up the money required for the surgery you may find that you have better things to spend that money on or may not even be interested in plastic surgery anymore.

Categories: Surgery Financing
3Mar

Mortgage Lenders Are Easier Than Ever to Find

Posted by Credit Financing Guru on 25th February 2010

If you are in the market for a new home, or perhaps looking to refinance, you will need to know a thing or two about what to look for in a mortgage. You have a lot of options when you select a mortgage, and there are many mortgage lenders to choose from.

Deciding what type of loan you would like is the first step for you. There are many types of loans to choose from, and it is a critical step. Selecting the wrong mortgage might put you in an awkward financial situation down the road, so it is best to find out what you need from the beginning.

The oldest type of mortgage on the market is the fixed rate mortgage. Fixed rate mortgages are for a particular period of time, say 10 years, or 30 years. The length of the loan varies, and you have many to choose from. With a fixed rate mortgage, the interest rate will not change for the entire length of the loan. That can be great if you get the loan when rates are very low, but if rates drop after you take out the loan, you might want to refinance to get a better interest rate.

Another type of mortgage is the adjustable rate mortgage, also called an ARM. Adjustable rate mortgages do just what the name implies, they fluctuate with the market. With an ARM, the rate will change from time to time as the interest rates change. It could go up, or it could go down, depending on what the prime interest rate happens to be.

Other types of mortgages are designed for specific home buyers. FHA loans are great if you are buying your first home. FHA loans are backed by the government, so lenders are more likely to give you the funding you need. If you are a veteran, you can also apply for a VA loan. It is a great deal for veterans, because a VA loan does not require the borrower to have a down payment like other loans do. There are other types of loans on the market too, so do your research to determine what is best for you.

If you find the loan you want, but the interest rate is not quite as good as you want it to be, you can change it. Lenders will allow you to pay what they call points. You can pay some extra money on the front end to actually reduce the amount of the interest rate. Points are a percentage of the loan amount, so the larger the loan, the more it will cost to buy down the interest rate.

Mortgage lenders come in a variety of forms these days. You can get a loan at your local bank or credit union, if you choose to go a traditional route. You can also apply for a mortgage online. Online mortgage brokers often have the best rates because they are selling loans at a high volume. Most only mortgage brokers sell for several different lenders, so you will have many loans to compare.

Mortgage lenders are easier to find than ever before. With technology today, you can apply for a loan in the comfort of your home.

When you’re deciding to buy a house, some of the factors that you have to take into account are mortgage rates. As mortgage rates are important for home-buyers, GIC rates are important for investors. If you’re interested in a customized financial plan, remember to visit us.

Mortgage Lenders FAQ:

Question: Will mortgage lenders perform a credit check to add me to an already existing mortage?
My brother and girlfriend have just split up and they can’t sell the house due to the fee and the value of the house is much less than they originally paid for it. He wants to add me to the mortgage and take his girlfriend off (she consents) but will they perform a credit check? My credit is not brilliant, but will be able to afford my half of the mortgage as I earn more than my brother’s girlfriend.

Answer: The mortgage company is never going to take his girlfriend off the note. She can sign a quick claim deed, transferring ownership to you, or anyone she wants, but she will never get permission to be taken off. It’s just not done. Not even in divorces. For you to get involved, financially is a moot point. If you want to help out, just have the girl friend add you to the deed, and start making payments, or helping. The only way to change anything is to refinance the mortgage.

Question: Do all mortgage lenders look at the middle of your 3 credit scores?
I’ve heard there are some “niche programs” that will look at either your highest score or the average of the 3. My middle score is 5 below what it needs to be and all that’s standing between us and this beautiful home my husband and I found is that score!

Answer: Most use FICO and not the agencies’ scores. There is no averaging there.

Question: What is the best way to find a mortgage company without letting them pull my credit history?
I don’t have anything to hide, I just don’t want a bunch of lenders pulling it and hurting my score. Also, is the Better Business Bureau a good way to evaluate smaller, local mortgage lenders?

Answer: Get recommendations from people you trust. If you are honest with a loan officer from a local Mortgage Broker, he or she will be able to predict pretty accurately from experience what your credit score is going to be. Just remember, a good loan officer is worth their weight in gold.

BBB is a non-profit organization that you pay to become a member of. They do not make laws, nor do they investigate anything.

Question: I’m 33 and my Husband is 41, is it to late to get a mortgage?
We have lived in our housing association house for 4 years however we are now debt free which means we feel we could afford to buy a house. Our ideal option is part buy/part rent scheme. We seem to fit most of the criteria for this type of housing but my main concern is our age. Would mortgage lenders even consider us?

Answer: On shared ownership you still need a deposit of at least 10% of the part of the house you will own. If you can get a property where you own the minimum share of 25% of a property then this will mean a smaller deposit but you would still need to raise this nevertheless. All mortgages whether shared ownership or for buying a property outright will require you to have 10% deposit at the very minimum.

Your age would not be an issue, most lenders will allow you to go to retirement age, some a little longer. Given your husbands age you would be looking at a maximum mortgage term of about 24 years.

Question: Can I refinance with a reputable lender following a loan modification?
I am anxious to leave the current lender that my mortgage is with and am working on bringing my credit up.

Answer: Yes, unless the modification had a provision saying that you had to make up any shortfall. Most lenders would not require that. They just want their money.

Question: Can someone obtain a mortgage through a bank or a lender for investment properties using an LLC?

Answer: If purchasing investment real estate, ALWAYS purchase it under an LLC and yes obtain a commercial loan for the property.

Question: Looking for bad credit lenders?
Does anyone know of any good lenders for people with poor credit? I’d like to be able to get a mortgage of up to $50,000.

Answer: If you live in the United States, look into an FHA loan. If you have been in the service, a VA loan is another possibility. Minimum down payment will be 3.5%, higher if your credit is poor but should not be over 10%. It is difficult for people with poor credit to get conventional bank financing and even if you did manage to find a lender such as a finance company who would be willing to take a chance, your interest rate would be astronomical.

Question: I’m on the deed but not on the mortgage and my ex wife left the country.
She is the borrower. What can I do to keep the house? Now that I’m in the last stages of modifications can the lender let me change the mortgage to my name and keep the house? What are my options?

Answer: Is she gone for good; in which case you better get a lawyer because you can’t modify her mortgage. Temporary; A POA should allow you to continue to work on her modification.

Otherwise, you’re talking about paying off the mortgage and re-fi in your name. Some companies may require you to get your wife’s name off the deed first.

Categories: Mortgage Financing
2Feb

Buyout Financing – Everything You Need to Know

Posted by Credit Financing Guru on 23rd February 2010

When companies driven by strategic factors set out to acquire certain businesses/firms, they usually rely on the expert advice of a throng of financial and legal advisers. Financial partners also come in the form of business brokers which handle small- to mid-range transactions. Regional banks are the front runners in identifying possible businesses for acquisition.

Most firms/individuals deal with investment banks to facilitate the buyout financing and handle the nitty-gritty of obtaining controlling shares from the targeted firm. They generally help investors know what to anticipate and craft a profit strategy at the best workable terms.

When the stakes are high, some large companies or individuals hire an investment bank — usually with a breadth of global expertise — to provide a package of services — from conducting valuation (after making due diligence) from a buyout perspective, to compiling information detailing the target company’s worth (including assets and future worth), to providing legal advice on requirements depending on the corporation code (which every country has), to reviewing corporate By-Laws and Articles of Incorporation of the company to be acquired; to acting as broker to raise capital to buy the company (with a bigger acquisition target, the more fund managers there may be to provide capital).

The investment manager may also handle the public relations and investor relations requirements that are usually part and parcel of the buyout financing transaction. In return for its services, the investment bank gets a percentage of the total buyout financing cost apart from regular professional fees plus commissions.

In certain cases, a comprehensive management buyout feasibility study is also presented. This includes market analysis (along with competitive pricing information); current and future competition, facilities & equipment; and historical financial performance report (with future projections and valuation).

To raise management buyout financing on the best possible terms, check out online sites for a reputable firms specializing in structuring buyouts of firms, subsidiaries, divisions and product brands. It can be a long and tedious process, but hiring a competent firm can take care of just about everything, from orchestrating the efforts of, and dealing with, the financial institutions, partners or investors, as well valuation firms, accountants, and legal counsels, to the other professional management buyout advisers who may be part of the transaction.

Buyout financing may utilize the assets of the buyer. Through an investment banking firm, the buyer may trade in his shares of stock to buy out shares from a firm. Or the money may be borrowed based on the business value and assets of the company being acquired. Sometimes, a venture capitalist (a speculator who handles innovative projects, with an eye towards higher rate of return than that given by more traditional investments) is hired to build distribution channels, set up branches and factories, and handle the operating capital.

There is also what is known as leveraged buyout financing (LBO), whereby the interested buyer/investor goes to the open market to accumulate shares to obtain a seat in the targeted firm’s Board. LBO entails finding the right strategic partners to effect the desired transaction.

Buyout financing can be a highly suitable option that can work for you, especially with a good financial partner/advisor which can devise a program that makes the most sense for you and assist you every step of the way.

Buyout Financing FAQ:

Question: Can bank financing be secured to buyout a partner in investment real estate property?
My mother and uncle (her brother) inherited an investment property. This is not a rental property, but the property will have considerable worth upon its sale. If my mother wanted to buyout my uncle’s share today with the intent to sell within 3-6 months, could she secure financing from a bank for this purpose? I assume we’d have to prove to the bank that the property would be profitable (in this case, upon its sale).

Answer: If you are talking about land she will have a tough time. If she can not repay the loan without selling the land she will not get a loan.

Question: Would you be happy or unhappy if a company whose stock you owned was bought by a leveraged buyout specialist?
Here’s the catch, would you be happy if they financed the purchase with junk bonds? I was guessing no, because of course junk bonds carry a high risk of default which could throw the company into lots of debt, right? And if that happened your stock price that you owned would go down if not disappear because of bankruptcy right?

Answer: Usually the bonds are sold to other investors, and the shareholders are bought out with the proceeds. And what happens to the stock is the buyers problem.

Question: What is reverse buyout?

Answer: A reverse buyout is a technique used by a private company to go public without the regulatory requirements of an initial public offering (IPO).

Question: What is the difference between buying and leasing with equipment?
I am buying a dump truck and the finance company wants to lease it to me with a $1 buyout at the end. Why is it a lease instead of a purchase? How will it affect my taxes for my business at the end of the year?

Answer: With leasing you can expense the entire monthly payment. If you buy it, you have to capitalize it and depreciate it. The monthly depreciation may be less than the monthly expense deduction but you may be able to take sec 179 depreciation on it which means you could deduct the entire purchase in the year of purchase, BUT only to the amount of profit. Say your business made $15000 profit after all expenses except the truck. Truck costs 20000. You could take section 179 deprec for $15,000 and depreciate the 5000 balance over the remaining life (3-5 yrs). Talk to a CPA to get exact details.

Question: What is a leveraged buyout?

Answer: A LBO, or leveraged buyout, is a way to take a company private.

Say you have a publicly-traded company. But management believes that the market is seriously under-valuing the company and that the company could be worth more if it were private.

Management, or a consortium of other individuals, then borrow large sums of money from investment banks (this is the “leveraged” part – anything with leveraging involves debt/borrowing) and use it to buy out all current shareholders and retire the shares, thus becoming the sole owners of the company.

Categories: Business Financing
2Feb

Financing a New Business – What You Must Know

Posted by Credit Financing Guru on 22nd February 2010

For anyone planning to put up a business, it is important to keep in mind that as much as possible, you should start it buy using cash or funds of your own in financing a new business. You can do this by starting small or slowly and even while you are still presently employed.

You can start a business by working hard. You can work during evenings and during weekends while keeping up with your current job. This will ensure you that you will still have a job even when the business will not come out as good. Other than that, you also haven’t acquired debt while you are financing a new business.

Sometimes however, other sources of funding might be required depending on what type of business you have. When you try to find out your financial needs, keep in mind that you have to do your planning in an organized way. Do not forget about other factors that might affect your business like disease, calamities or machine breakdown.

In preparation of financing a new business, remember these things: equipment, business license or permit, legal fees, salaries, advertising, office supplies, etc.

What any starting businessman should avoid is to obtain additional financing while on the starting phase. There are two types of financing: debt and equity financing. The first one means that you make a loan from anybody and you are compelled to repay the sum you borrowed. The latter one has something to do with advertising or selling a part of your company to another investor. In other words, you are not forced to repay the funds. Generally, this form of funding is given by venture capital companies.

Most small scale businesses will then to make use of debt financing because equity financing are only interested in lending huge sums of money. So we will talk more of the sources of debt financing as a way of financing a new business.

Here are debt-financing sources:

1. Own Savings. This is the best option for you if you have set aside some amount. You have to remember though, that you must have a separate and sufficient amount for cases of emergency.

2. Your Relatives. Usually, your family and your relatives the easiest people to lend money from. If you will be able to persuade or convince them of your business idea, they may be willing to let you borrow money. You also have to make sure that you have an official loan document which states your interest rate and terms of payment. Just make sure that you will be able to return their money in the agreed length of time even when your business fails.

3. Banks and Lending Investors. There are a lot of local banks that allow you to loan money for putting up a business. This move will involve a presentation of a legal plan that justifies the amount that you are planning to borrow from them.

4. Equity Loans. The interest rates for equity loan are usually low. Just be careful and remember that your home is at stake


Financing a New Business FAQ:

Question: What is the best way to obtain financing for a new business startup?
If you had a business plan but little cash, how do you acquire enough cash for your business?

Answer: You should not start a business if you cannot pay cash for it. If your business fails (and many of the new ones do) and you paid cash, you simply move on. If you borrowed money, you are left with debt you have to pay – possibly for a long time to come.

Also, paying cash will prevent you from making many mistakes you will make if you borrow. It is plain psychology: we think before paying cash and do it much less (or do even not at all) when we borrow.

So, if you truly believe your business plan is sound, save what you can, get an extra job, save more, then and only then start it. As it develops, reinvest part of what you make into it to make it grow.

Question: I need money financing for a new business and because of my ex I can not go to the banks or loan companies.
He’s totally screwed me over. Paying money back isn’t a problem. Any ideas? And I don’t mean debt consolidation etc.

Answer: You need to put together a firm and realistic business plan and use it for financing and/or grants. Do some research online for resources, then take a trip to your local library.

Question: What is the importance of financing for a new business?

Answer: All businesses need money. Start with capital – your own money or your investors. Financing costs interest. You can’t afford too much interest to start with.

Most businesses fail because of undercapitalization. Get enough startup capital to last at least a month and preferably 3-4 months.

You will have to buy things to get going, both goods and services. And you will need working capital to support your business until you start getting income.

So finance your business with capital if at all possible. Finance your long term fixed assets with a term loan if you need to. Get a line of credit so that you can have short term working capital as you need it but resolve to keep that line as low as possible and use it only when you need it.

The line could be at a floating rate related to prime. The equipment long term loan should be at a reasonable fixed rate, like a car loan or other capital equipment loan would be. You should pay that loan off prior to the end of the effective life of that equipment.

Question: Where can I find financing for a new business (I have no credit)? Can do approx 15 to 20 mill a year.
This is a new newspaper like nothing else on the market. Basically for those who ride public transportation.

Answer: What you need is a Venture Capitalist but they aren’t easy to please. You better do your research & homework. Have a Solid business plan before you start contacting them.

Question: Financing Question on opening a new business?
We have decided to start a small business. I favor a 75% debt (mixed short and long term) 25% equity financing plan, while my husband favors a 80% equity (some preferred, but mostly common stock) 20% debt (long term) structure. We will be opening a small chain of pet grooming shops including building, land and equipment, and pet products for resale. I have come to you for advice in settling the financing tradeoff struggle.

Answer: I would suggest speaking with a business consultant/accountant/lawyer in your area. I would ask for referrals from other business owners or check the phone book and web.

You will need to look at cash flow projections and credit ratings to determine how much debt your business can carry and how much equity you can raise.

Question: What is the best way to get financing for a new business venture?

Answer: To get a loan, you need to write a business plan. Go to the SBA website for instructions on how to write a business plan and sample business plans.

Go to the SCORE website and in the upper left hand corner, enter your zip code. On the next screen, you will get information on the nearest SCORE chapter. Call them and arrange for a free meeting with a SCORE counselor to discuss you business plan.

SCORE is a nonprofit association dedicated to entrepreneur education and the formation, growth and success of small business nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA).

SCORE has 389 chapters in locations throughout the United States and its territories, with 10,500 volunteers nationwide. Both working and retired executives and business owners donate time and expertise as business counselors.

Question: What kind of company do I need to contact for financing for construction on a new business in the Caribbean?

Answer: Depends. If you have enough money to cover 30%-35% of construction cost, you can get bank financing for the rest. If not, you need to arrange equity investment first.

Question: How does one get financed for a new business idea?
I am looking for financing for an independent music label, but cannot seem to find resources for financing. I am looking for start-up finances, but all I can find are resources for small businesses that have already been active.

Answer: To get started, I suggest contacting the Small Business Administration Financing Page (SBA). Entrepreneur also offers a great site dedicated to money & finance. The SBA site has sample plans and instructions on how to write a business plan. Then, take the business plan to a bank.

Categories: Business Financing
2Feb

How Does Owner Financing Work? Your Ultimate Guide

Posted by Credit Financing Guru on 6th February 2010

Financing a business venture sets the profitable idea to work. Without any means of financing, a great concept would never really be called a business until some form of financing is guaranteed.

Owner financing is one of the riskiest types of business financing. “How does owner financing work?” an entrepreneur may ask. Owner financing or seller financing is a form of financing where the original business owner or the property seller partly funds or shoulders the cost of the sale.

The usual setup is that the buyer would usually pay off the amount of the sale to the seller slowly over time. In such way, there would still be shared ownership of the business where the seller and the buyer would continue to share control management of the business. In effect, co-laboring for the business-on-sale becomes somehow inevitable where responsibilities, business operations’ costs and expenditures are still shared.

In this setup, there is a tendency for a troubled sale because during the process, the buyer may mismanage the business and just run around and hide from payments. Should this take place, the only recourse of the owner financing party or the property seller is to foreclose on the note and repossess the business. This leaves the seller to further complication as he would be left to look for another buyer and begin with the sale again.

Some business owners yield to owner financing mainly because there are certain businesses which are difficult to sell. In a way, shouldering the note or part of the purchase price of the business may be an attractive component for a potential buyer.

The owner financing setup, in fact could be a godsend opportunity to a small-time entrepreneur as the seller usually requires relaxed qualification standards and more lenient terms toward the sale of the property. Oftentimes, the sale terms are even more relaxed than those offered by loan firms or banks. Usually, this setup allows adjusted payment schedules, interest rate negotiation, loan period stretch and mostly everything palatable to the potential buyer’s preferred terms.

On one hand, a seller should always be covered and must be able to protect his interest. One option is that the seller may require the buyer to secure a more extensive loan. This way, the business-on-sale would not be the only collateral available for foreclosure in case of default in payment. In effect, should there be “more costs” on the buyer’s end; he would be more diligent in payment. Furthermore, he would be more determined in making the business work and speeding up the payment to completely acquire rights to the business.

Owner financing is jump started by having the buyer pay a sort of down payment. The business or assets attached to it acts as a collateral for the note. For the security, information of a “third party” acting as witness to the sale, a lien on the property is usually filed to the secretary of state’s office where the extent or coverage of the business is declared. If at some point, the buyer defaults on the note, the owner financing party or the seller should be the first in line to step back in and take over the business.

Owner Financing FAQ:

Question: How does owner financing affect your credit oppose to financing your home through a bank?
I bought my house by financing through the owner (Owner financing) because my credit was not great. I have never had anything repossessed or any major credit problems. Yet my credit is not all that great. I am wondering if it has to do with not financing my house through a mortgage company.

Answer: Chances are that private lenders do not report your loan and payment history to the credit bureaus.

Question: How long does it take to close with owner financing when the owner has a mortgage?
In other words, what time-consuming activities have to happen before closing, when the owner providing the financing is already satisfied of the property’s value and condition, so there is no need for additional inspection, appraisal, etc.?

Answer: If you want title insurance (and you do) that could take a couple of weeks. Other than that this could be done in a few days. Just schedule a closing with title company.

Question: What are the pros and cons of owner financing a home?
I have a home that I am interested in selling and am looking at various ways to entice buyers in this tough market. One option told to me was owner financing the property. What are the pros and cons as a person that would be financing my property? Also, what would be the difference if I still have a small mortgage on my property?

Answer: Pros: you will have lots of buyers to choose from, you can make a good profit, you have the right to foreclose and take back the home if payments are not made as the promissory note states
Cons: You will need to screen all of those buyers, Profit is long term, You will have to go through the legal process to foreclose if necessary
This is in my state of Texas, you should find out what the rules are where you are. Many investors in my area have become quite wealthy with owner financing. One reason is that when the owner forecloses, they lose all equity in the home and the financier can then sell the property again, keeping the last person’s equity. Not saying this is right or wrong, just a fact.

Question: Where should I look for an owner financing option as a buyer?
I am ready to buy and make 150,000 payment on a house. My credit is bad, should I look for an owner financing option as a buyer? What are my options?

Answer: This is a searchable field in the MLS, an agent can give you a list of owners willing to carry paper.

Question: Can someone explain to me what owner financing is?
Can someone explain to me what owner financing is? Please provide examples, with numbers. I get confused when % and this “balloon” thing is mentioned.

Answer: Owner financing is when the seller will hold title to the property instead of the mortgage co. A balloon payment means after so many years, usually 5 years, the balance has to be paid. This means you then have to go to a bank or mortgage broker to finance the remaining balance. In most cases, the balance of the mortgage is about the same because you pay about 70% of the interest of the first 15 years of the life of the mortgage. You’d be better off going to a Bank for your financing because in 5 years interest rates might be higher than where they are now. Make sure it’s a fixed rate open end mortgage which means you can pay down the mortgage anytime.

Question: What are the pros and cons of 100% Owner Financing?
Is it the same as a 30 yr fixed rate home loan? Is the interest rate usually higher? There is a house I am interested in but I don’t want to call and be an idiot not knowing how Owner Financing works?

Answer: The terms and conditions are whatever you and the seller decide AND put in writing. The rate can be higher but that just depends on what you agree to. You can do a 30 yr fixed with a balloon after 5 years if you wish and then at that point you can refinance with a conventional mortgage. You can do 5,6,7,8+% interest. Whatever you want to do. Negotiate the best deal for yourself. They are offering to finance it because they probably have tried to sell it conventionally and in this slow market were unsuccessful. I would recommend getting either a good Real Estate attorney or a quality title company who will assist you in getting things documented. Things can go sour on a handshake because it is not in writing.

Question: How could I structure owner financing on this deal?
I may be getting a property under contract very soon for the deed. If I do, then I have the option to do owner financing. I don’t really understand how to structure owner financing deals which is holding me back from trying to get the deed versus doing a regular lease option.

Answer: Owner financing and lease option are two separate and totally different things. Also buyer and tenant are not the same.

Owner financing is where you would hold the note and the buyer would pay you instead of them paying directly to a mortgage company. Lease option is where they have a one to two year lease with you and can either purchase or not purchase the property. In both cases this would be a Buyer/Seller transaction because you are selling the property. If you were renting out the property than it would be landlord/tenant.

Question: What is owner financing all about? How does it work?

Answer: The owner takes back a mortgage and acts like the bank. It is a transaction that most, if not all, attorneys advise against doing.

Categories: Business Financing
2Feb

Business Funding – Overcoming Financial Obstacles With Invoice Financing

Posted by Credit Financing Guru on 31st January 2010

Coming up with ideas to grow a small to mid-sized business is the easy part. Coming up with funding ideas is where the challenge lies. There are many obstacles that can prevent small and mid-sized businesses from accessing working capital in a timely manner or at all.

There is an innovative solution that offers an alternative to traditional financing methods that can help owners overcome these obstacles so they can get the cash they need fast in order to compete and grow.

Through an online auction platform, owners can sell their accounts receivable and, for a small fee, receive the funds in as little as 24 hours. By selling your outstanding invoices in this online auction marketplace, here are some of the obstacles you will overcome:

1) One common funding obstacle is credit rating. A small to mid-sized company that has been open for a couple of years, may not have established the appropriate credit rating needed for traditional financing. The receivables auction platform referenced above doesn’t rely solely on credit ratings to determine approval for membership.

It takes into account a variety of factors, including the customers. In fact, when selling your receivables via auction, you can actually leverage the credit rating of your larger, investment-grade customers to obtain the best cost of capital.

2) Another obstacle can be the restrictions placed on the owner by other funding methods. The receivables auction platform does not require an all-asset lien, where the seller is forced to pledge all accounts receivable for sale. The seller has the flexibility to pick and choose which invoices and how many he wants to post to an auction and sell.

Also, there are no restrictive covenants attached that dictate and set limits on the kinds of decisions the owner can make. In this online receivables auction marketplace the seller maintains complete control of the transaction. The Seller has the flexibility to decide when and how he taps into his accounts receivable for working capital and how he conducts business.

3) One of the toughest obstacles for small and mid-sized businesses to overcome is the lengthy amount of time it can take to convert accounts receivable to working capital can have a hard time overcoming. Traditional financing methods can leave small to mid-sized business owners waiting months for approval but, with this type of invoice financing -selling receivable in an auction platform – they control the clock.

They decide when they want to sell invoices and how frequently. For instance, if they know there is a huge sale on bulk inventory next week, they can post the necessary invoices and set the auction length for 3 days. Once the auction closes, funds are electronically deposited into the seller’s account within 24 hours. By selling these outstanding invoices on the real-time auction platform, they receive the cash advance in plenty of time to take advantage of the sale.

It doesn’t always have to be complicated for a small to mid-sized firm to gain quick and efficient access to the funding necessary to grow the business. Auctioning accounts receivable in a real-time, transparent, marketplace helps business owners overcome the obstacles they often encounter with other traditional financing methods.

With invoice financing, business funding becomes easier for businesses as they can quickly sell their accounts receivables to fund their working capital requirements easily and quickly. To know more about this innovative way of fund raising, visit http://www.receivablesxchange.com

Business Financing FAQ:

Question: Where can I get financing to purchase a business?
I want to purchase a business but I’m not sure where to go for financing. I need between 50k and 75k to purchase it and I was told that there are not many lenders that will finance that small of amount.

Answer: That’s a reasonably normal size small business loan for any local bank. What they’ll want to see is how much cash equity you and your partners are putting into the deal and how they’ll get their money back if the business fails.

Question: Financing question for small business?
Small business, LLC open for just under 2 years. Looking to refinance our loan we took to start the business and the banks are saying no go, almost seems they want us to go Ch 7 or 13.. Any idea’s on where to turn or what to do, loan was a personal type loan.

Answer: Hire an accountant to organize and update your financial and tax records. Then, consult an attorney specializing in business law as to your options; you may decide to negotiate with your suppliers and landlord before asking to re-negotiate the terms of your loan.

Question: Need a small business loan, can you help?
I am a new business owner and have need of finances upfront to get the building completed, and update equipment to expand our ability to get customers what they want/need. I am a young woman with no significant credit established. I have tried a few options that have proved unsuccessful or I am on a waiting list to be reviewed so I need your help. Do you know where I could possibly get some financial assistance

Answer: Go to your local SBA and ask for help! Talk to them about loans, put together a great business plan to take to banks and get all the tax advice you can get. They are a great resource and may know of some nontraditional financing that may work for you. I’d hate to give you false hope, but with no credit history and having already jumped the gun, you may be in some trouble.

Question: I have very good credit, but no assets. How can I get small business loan, or other type of financing?
I’m interested in purchasing a convenience store for sale that has been in business for many years. I would probably need a loan for about $200K. I have about 20% cash to put down.

Answer: There are SBA(.gov) loan programs in that range, but there are requirements in addition to the profitability of the business (must be verified however, with schedule C’s preferably). I think you need a net worth of a certain amount as well as collateral to cover all or 90%+ of the loan value. You can read more at the SBA’s website. There is a non profit called SCORE that is made up of retired business execs that can help you with a business plan and your loan apps, too. Of course, if you meet the collateral requirement, a home equity line is another option. Remember that the principal of the loan is not subtracted from your net income, so you can write off the interest and take depreciation on most of the assets (tangible and intangible are depreciated at different rates) but the principal of the loan comes out of your paycheck after taxes. This is one reason it is very difficult to make acquisitions with business loans unless there is massive growth potential.

You may be better off looking for something in the $40,000-$60,000 price range than taking out such a risky loan. You also MUST talk to an accountant about depreciation rates on the business’ assets, as this is one of the only ways to make an acquisition profitable post-tax.

Question: Can I take out a loan under my business without my personal credit being checked?
I want to open a business but I have real bad credit and cannot get a loan to finance my business. If I were to open an LLC or Corporation can I apply for bank loans under the company without my personal credit being checked?

Answer: No. After all, how can the lender check to see if it will be repaid?

Question: Do I really need quickbooks for my new small retail business?
I am in the process of putting together my business plan for a new retail business. I have been planning for my initial expenses and am wondering if I really need quickbooks. I am a fairly intelligent person with a college degree. Although the degree is not in finance, I did take accounting courses. Is it necessary to use a program like this or should I be able to do my own basic accounting with a little self training? Of course, I will have an accountant who will do my quarterly reports and tax filing.

Answer: For $140 and a PC its not a big expense for it. It will do all your invoices as well as accounting, keep track of customers, late payments, provide reports for sales tax purposes, etc. etc. It does a lot more than just accounting.

Question: Besides family and friends, how do you get financed for your business?

Answer: A new business is difficult to finance through a bank without real property to put up as collateral. Check with the SBA Small Business Administration to see if your situation has any govt assists available.

Question: What steps are necessary to actually start a small business?
Include education and finances.

Answer: Lets start from the top. You will begin with identifying something that you are interested in, a passion, a hobby that could become a money earner. Having identified that, then you want to learn all you can about it through informal learning, college education, apprenticeship, etc. Before you take the final plunge to hang your shingles and start the business, you will need to come up with some sort of business plan that will do market research on the demand for your product or service; sniff out your competition; address your marketing strategy; analyze your start up costs and operational costs; forecast your revenue; address your staffing needs; where and how your products/services will be produced and delivered; address the legal status and licensing requirements of your business.

The above covers the whole gamut of the overall steps, but depending on your location, other baby steps might be required. As you navigate the process, you will find it necessary to engage other professionals to assist you along the way. Do not make the classic mistake of trying to do it all by yourself.

Categories: Business Financing
1Jan

Home Mortgage Financing With Bad Credit

Posted by Credit Financing Guru on 31st January 2010

Are you interested in getting home financing with poor credit? Given the recent housing slump that has occurred, a lot of different lenders have made the lending criteria stricter. It is important that you do your homework any time you are going to be applying for a home loan with bad credit.

In order to get your loan approved you will need to make sure you have a down payment for your loan. Most lenders require a down payment from the majority of borrowers. Unless your credit rating is extremely good, there is a good chance that you will have to provide a large enough credit rating to the different borrowers that are available.

People who are interested in getting a loan application approved should consider getting a cosigner for their loan. The benefits that cosigners offer are the ability to diversify the risk that creditors face. If you default on your loan payments then the lenders can go after your cosigner to cover the payments you missed. Most lenders use direct family members as cosigners for their loans.

Anyone who is interested in getting a loan secured needs to make sure that they take steps to pay off high interest debts. Lenders don’t want to lender to you have you have a large amount of outstanding debts that are available. For this reason it is important that you reduce a lot of your high interest debts before applying.

If you are looking to get home financing with poor credit it is important that you do your research. Saving up for a down payment and finding the right lender are probably the two most important aspects of the loan process. A comprehensive search online for different home lenders will ensure that you find one that can work for you.

If you are looking to get a Poor Credit Mortgage approved you will need to do your homework. A comprehensive search for the different Home Finance Creditors will ensure that you get your loan approved.

Mortgage Financing FAQ:

Question: When is a good time to consider re-financing your mortgage?

Answer: 1. When you can get a fixed mortgage with a lower interest rate than the one you have.
2. Calculate the monthly savings with the new mortgage.
3. Determine the total cost of the refinancing.
4. Calculate how long you would have to keep the mortgage in order to recoup the refinancing expense.
5. Go with the new mortgage if you plan to be in the home long enough to break even.

Question: My Mortgage Insurance was financed with the home and does not appear on 1098, can I still deduct it?

Answer: You can deduct it but you may need proof of payment by the IRS. Contact your lender or provider and get documentation. If you paid it, deduct it.

Question: Are there any 100% financing mortgages left?
Is there any way to get 100% financing for a house today? I know in the past they had the 80%/20% mortgages to obtain 100%. I also know about 3.5% FHA which seems like a decent option.

Answer: No there pretty much aren’t because house values are still declining all across the country so if you financed 100%, you would be underwater in one month.

Question: How do I get out of a mortgage or owner finance with a mortgage?
I am not hurting financially and not going to foreclose, but want to move closer to my work. I have a mortgage but if I sell I won’t get over what is owed or maybe break even. I really would like to make enough to get at least a decent down payment for the new location. It is an older home in need of repairs but a lot of square footage and in town. Someone suggested Owner finance, do mortgage companies allow this, is it feasible to rent considering my mortgage payment and renters insurance prices, and don’t mention maintenance repairs for rental? I’ve never sold a home before but want to know all my options.

Answer: Owner financing is not a real option since you would have to pay off the original mortgage to legally mortgage the house to another party and even then it is a big risk to you. Renting is your best bet, but like you mentioned that idea accompanies a bunch of other issues (repairs) and while you wouldn’t need to pay renters insurance (renters pay that) your homeowners insurance would increase since the property is no longer owner occupied. It really comes down to priorities. How important is moving closer to work? The only way you can get a reliable value to your house is to have it appraised. Realtors providing comparative market analyzes might work, but so often they tend to over inflate the price in hopes of getting the listing because they “think” the property is worth more, when in fact their opinion doesn’t matter, only a buyer’s opinion matters.

Question: Anyone other than FHA offer High DTI Ratios for mortgage loans?
Recently I was pre-approved with a FHA loan with a high DTI between 50-55%, but the guidelines have recently changed and now my pre-approval is gone. I’m curious if anyone knows of any other methods of financing that would have a similar DTI as the FHA loan that recently changed?

Answer: FHA doesn’t have any minimum credit score requirements or debt ratio requirements. Where these requirements come from is the lender making the FHA loan. I currently have lenders that will go to 55% debt ratio with a 660 min. middle credit score. These are known in the industry as credit overlays.

The big 4 put out their loan guidelines, and its up the individual lenders to determine their credit overlays, which are loan guidelines that are requirements beyond the investors guidelines. The big 4 I refer to are FHA, Fannie Mae, Freddie Mac, and VA, this is the modern day source of virtually all “A” grade loans on the market.

Question: Mortgage increase or give up RRSP contributions?
I’m studying finance right now and we have a question that deals with a person who can either increase the size and length of amortization of their mortgage, or decrease/give up their RRSP contributions. I have no idea which is better as I have neither at the moment.

Answer: Giving up their RRSP contributions now would often (but not always) be to their detriment, dependent upon their age and length of time that they will be working. The reason for this is they will miss out on the compounding of the RRSP contributions. The only reason that I can think of to increase the size and length of the amortization of their mortgage is to enhance the existing house in some way, but keep their payments the same.

Personally my choice has been to only go with a shorter term mortgage and lower rate. I’m 2 years into a 15 year mortgage @ 4.625%. And if you look at any amount of mortgage borrowed, that will always show up with the very first payment paying more in principle than in interest. I prefer to minimize interest paid, and the term of the mortgage. While keeping retirement contributions the same, or more.

Question: Why aren’t lenders willing to modify mortgage loans?
I have friends who bought a home in 2006 for $275,000. They obtained conventional financing with 10% down and were making their mortgage payments. The subsequent real estate meltdown from zero-down-pay-what-you-want loans destroyed the value of their property. Their lender refused to even discuss loan modification. They walked away figuring their credit would recover faster than the real estate market. Their old house is now on the market for $95,000. They would have been happy with a mortgage at DOUBLE that valuation with no interruption in revenue or foreclosure costs to the lender. It makes no sense to me. Any insider input?

Answer: Lenders WILL modify their borrowers mortgages. The trick to the situation here is for them to declare a Hardship, and go late on a payment, then the lender will see that they are indeed at risk of losing money on an investment they made (Loaning to your friends for the home). I have yet to come across a lender that would rather foreclose the modify. You / They need to talk with a professional modification company that is backed by an attorney that specializes in this, it’s absolutely free to speak with one. If they determine that you are a candidate for a modification based on the hardship, and their household financial situation, they will want to retain their services.

Question: What are the consequences of having a lien on your mortgage? Will this hurt you financially?
My mom gave me $20,000 to purchase my home. This home she lives in free (I do not have her pay anything). My husband and her do not get a long. She now wants me to take a lien out in her name for what she gave me so that if anything happens to me she can get her money back. But I don’t feel I owe her as long as she lives with me rent free. I told her I would look into it. Just curious on what this will do to my credit and finance.

Answer: It will not have any effect on your credit. The only time it will come into play is, when you sell the home she will be paid back her $20,000 from the proceeds of the sale. It is very much like having a second mortgage on your home.

Categories: Mortgage Financing
1Jan

Securing Motorcycle Financing With Bad Credit

Posted by Credit Financing Guru on 31st January 2010

Despite the doom and gloom you hear through news reports every day, it is still possible to find a lender willing to extend motorcycle financing with bad credit. If your report is less than impressive, chances are high that you can still get the financing you need.

The biggest piece of advice that I can provide is that you should try to find a cosigner. I understand that this won’t always be an option, but it’s the easiest way to secure this type of financing.

There are companies and programs that are designed to work with people who don’t have the greatest credit rating. The best way to find them and take advantage is to look online. This is where you can find out about the best lenders and how to put in your application fast.

It is not only faster to go through online lenders, but it will save you a lot of time and humiliation as well. There is nothing like the hassle of sitting in a bank trying to explain away your credit flaws, but luckily yo won’t necessarily have to do that.

There may be some little things you can do to clean up your credit and improve your chances of finding a good loan, so get a copy of your report. If you have smaller items such as doctors bills try to pay them off. Also, leave open any lines of credit you do have, even if you never use them. That open credit will build confidence with other lenders.

Also, it is common sense that the more you are willing to invest in your bike the more willing someone else may be to front you the money needed. If you can come up with a down payment of some sort your chances are greatly increased.

So, what if you cannot clean up your report right now and cannot afford a big down payment? You still have a lot of hope of finding a lender who is prepared to work with you. You just have to put in some time looking around and be open to a higher interest rate. The terms on a loan for someone with bad credit are slightly different from a bank loan for someone with stellar credit, but that doesn’t mean the deal will be bad for you. In fact, it could turn out to be a great thing for your credit score.

Finding motorcycle financing with bad credit could turn out to improve your rating. You will then be able to take out other types of loans like poor credit signature loans.

Motorcycle Financing FAQ:

Question: Where is the best place to get motorcycle financing?
I am 18yrs old and I’m trying to make my first big purchase and buy a motorcycle but no one wants to give me a loan because I have no credit. Is there anywhere I can for sure get financing?

Answer: The only places you can ‘for sure’ get financing are exactly the places you want to steer away from since they will charge outrageous interest rates, and hurt you more than help. If you can’t afford it the first time on your own you will have to do what everyone else had to do. Find a co-signer, or just put the money away on your own, and buy it outright instead of using a loan. It won’t help you gain credit, but you will be riding.

Question: Any tips on how to avoid paying full coverage insurance on a motorcycle while financing it?
My friend has been financing a motorcycle and he just did his policy online and put down that he owned the motorcycle and only put liability on it. Is this a good way to get around the system?

Answer: Your finance contract requires that you maintain full insurance coverage. If you do not, you are in default of the contract, the same as if you did not pay your payments.

When the finance company finds out about the lack of insurance, they can put insurance on the vehicle, that will cover them. They can add the premium to your loan balance, and the cost of their insurance is a whole lot more that it would cost you to buy the correct coverage yourself.

They also can repossess the vehicle if you do not provide proof of insurance, and require that the entire loan be paid off.

When you signed the finance contract, you agreed to the terms. Keep the coverage on the vehicle and live up to your word!

Question: Any ideas on a reliable site for bad credit motorcycle financing?
I have been divorced twice. Due to that and foolish decisions from my youth, I am left with a beacon (more like a flashlight) score of 570. Yamaha credit declined me. I purchased a car in March through Capital One, I have two credit cards with them (all are paid on time, ahead of schedule and way more than the minimum when I have a balance) but they do not finance bikes. Any reliable sites out there to finance someone like me?

Answer: You might want to look into “Greentree”. I had not so good credit a few years back. I ended up going to my Credit Union Bank, and just asking “If I was gonna buy a bike, what could I get approved for?” They came back with around 6k. So I went and bought an 03′ Vstar 1100 Custom for 6k with 3200 miles on it. If your one of those that’s gotta have a Harley, trust me, I’ve owned them and your not missing much.

Question: Is financing a motorcycle bad for insurance?
I was going to get the Yamaha R6S, but I heard that if you don’t have the pink slip for the bike and you get insurance, that they will charge you double for insurance or a lot more money. If thats the case then I’ll just get a Kawasaki Ninja 250R, but I would really like a R6S. I just wanted to know if financing a motorcycle would cause insurance to go up?

Answer: The financing itself doesn’t add a dime to the cost. But, if you finance it, they will insist that you carry collision insurance on it. Collision insurance on a motorcycle is extremely expensive. If you’re under 25, it’s going to be at least half the cost of the bike. So, if you’re going to pay cash for a bike, and carry collision insurance, well, it’s still going to cost a lot. If you don’t carry collision or theft, it won’t cost much. Oh, and collision and theft are way more than 2X the cost of liability.

Question: Where is the best place to look for motorcycle financing after filing bankruptcy?
I’m looking for a 600 VLX thru Honda and have a co-signer.

Answer: Your best bet is to try your local credit union or bank. If your bankruptcy is recent then the lenders that the manufacturers use will most likely not finance you. The same is true about credit unions and banks. However, I have seen credit unions take a chance and finance a person with a bankruptcy.

Question: Financing a motorcycle but I need a truck?
Last year my husband decided to buy a motorcycle. Brand new $6,000 ninja. Because of interest and low monthly payments we have only knocked that down to 5,700. The problem is we are planning to move to a colder climate and a motorcycle will not do well there. We are financing through the kawasaki credit card company. What are our options to either sell it or trade it in? We do not have the title yet since were still paying. Credit scores are around 650. If there becomes a private buyer how can we sell to them without having the title?

Answer: Sell it privately, and work with someone who is willing to wait a week to get the title transferred to him.

Question: Do you have to carry insurance on a motorcycle if you are financing it?
I know in WA state where I live you aren’t required to carry motorcycle insurance, but I am curious if you need to have insurance if you are financing a bike?

Answer: Yes. When you finance, the bank owns the bike, not you. It’s an investment on their part, trusting that you’ll pay the bike off with interest before destroying it. That said, they want to make sure their investment stays safe, which means that they will require FULL coverage on any financed motorcycle

Question: No Credit Check Motorcycle Financing in Florida?
I’m in a hurry to hop on a bike. Had my endorsement for almost a year now and don’t have enough to throw down cash full. I am 20, have no credit yet, and can’t finance a new bike because of that reason, any ideas? I live in central Florida, is there anywhere that will finance you a used or new bike with no credit?

Answer: I doubt there are but if you happened across someone who would finance you your interest rates would be astronomical. You’d be better off to get a cosigner if you can.

1Jan

How to Find Cosmetic Surgery Financing?

Posted by Credit Financing Guru on 31st January 2010

All of us know that cosmetic surgery is expensive and some procedures are more expensive from the complexities involved. Some procedures may be an amount more than that of a small car! But the best part is that it is easy to attain financing for you cosmetic surgery procedure. There are many ways to get cosmetic surgery financing. Some people treat cosmetic surgery like how they purchase household items like a TV or a washer. You can have the cosmetic surgery financing by using your credit card and there are many cosmetic surgeons who accept credit cards for almost all of the procedures. This is good news for those who want to change their appearance or loose some pounds from their body.

Credit cards are really expensive in the sense that the interest rates for the amounts used for purchase are quite high and hence it will add up to the already expensive surgery to make it more expensive. In this situation generally people will try to repay the amount back as early as possible to avoid the higher interests. Also there are cases that some cosmetic surgeons do not accept the credit cards. In this case, you have to make some cash withdrawal from the credit card to meet the cosmetic surgery financing. This also will attract more expenses in the way of higher interest on cash advances.

Cosmetic Surgery Financing by Surgeons

As we have seen the interest rates on credit cards are very high and mostly people will find it very difficult to afford such hefty interests. There are other avenues for cosmetic surgery financing. You can take the home equity loans for the purpose of financing. Banks will be extremely happy to issue loan over the home equity. Home equity loans carry less interest rates compared to any other loans and are much less than the credit card interest. You can check up with the officers of your bank about the low interest rate options. In fact, banks are eager to issue loans to genuine customers, even without asking the purpose of the loans. Really this is a viable option.

If you cannot work out a bank loan, there are some other options as well. Many cosmetic surgeons have their own modes of financing. They are ready to offer their services with long-term payments with interests. The system is good for the patients as well as surgeons. The patients can do the surgery without much worry about financing and doctors get this opportunity as a deposit with more interest rates. Some doctor collaborate with private financial lenders to provide financing to patients with good credit records. Some companies offer cheaper interest rates than credit card financing companies.

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Surgery Financing FAQ:

Question: What is the best type of financing for cosmetic surgery?

Answer: Most will offer a free consultation. The best type of financing is cash, but if you really need to use credit, there is a card service called Care Credit. It’s good for any type of medical, surgical, prescriptions and even animal care.

Question: Plastic surgery financing?
I broke my nose (and also for cosmetic reasons) and need a reliable company to finance my surgery so I can pay before having it. I will pay it off within one month of having it done. Does anyone know any good companies with a low down payment, lenient approval rate (I hate having a credit check, as I have no credit history, and I’m just trying to build credit). I need a company that preferably offers a 100% approval rate or is lenient.

Answer: It makes absolutely no sense for you to borrow money for this reason. You state yourself that you can pay it back in one month. All you need to do is make your appointment with your plastic surgeon and schedule your surgery for one month from now. save your money for the one month and then pay it all cash.

Question: Elective Surgery Financing?
I have to have surgery that is not covered by insurance. I was going to finance it, but have really bad credit. I can’t go much longer without the surgery but am not sure what to do. My husband filed for BK over a year ago, but because of his debt, and because we are married I have the BK on my credit too. Has anyone gotten financing for health reasons with bad credit?

Answer: You might want to try Capital One Healthcare Finance. You never know, the worst thing that could happen if they approved you is that you’ll be obligated to repay the loan at 23.99%.

Question: What is the best financing company for cosmetic surgery?
Any experiences with CareCredit?

Answer: I haven’t had experience with them but I would pay with any of the different types of payments that are flexible for you. I personally would use a cashiers check.

Question: I am needing to find a good cosmetic surgery finance company?
Looking for anyone with personal experience to help me find a good cosmetic surgery finance company.

Answer: Talk to your surgeon. They often have agreements with finance companies.

Question: Is there a doctor offices in NY/NJ that offers their own cosmetic surgery financing?

Answer: Since cosmetic surgery is not usually a covered insurance benefit, most physicians offer payment plans. The only way to know is to make a phone call to the office and ask. If they are listed in the Yellow Pages, it may also be stated there.

Question: Where can I get plastic surgery financing with bad credit?

Answer: There are very few companies who would be willing to finance plastic surgery, anyway. I would suggest that if your credit is that bad, you should wait until you can afford the surgery.

Question: What are the best financing options for cosmetic surgery?
I have no credit cards. The only thing that can build my credit is my cell phone bill. Have any experiences using Care Credit? Capital One?

Answer: The BEST financing option for ANYTHING is CASH. If you can’t pay cash, you can’t afford it. This is a general rule. Unless your cosmetic surgery is reconstructive surgery following an accident, your don’t need it at all. If it is, your medical insurance should pay for it.

Categories: Surgery Financing
1Jan