Automobile financing can be complicated when you do not know where to look. There are so many options and you want something that is affordable. You can spend a great deal of time looking for affordable financing, simply because you are not looking in the right places. That is why you need to go to the best places to find your automobile financing. First, never get your financing from the dealership. Dealership use inflated rates and put confusing words in their agreements so you think you are going to get a better deal than you actually are. You will almost never get the kind of financing you want at a dealership unless they are offering 0% financing. Remember, though, that you will have to repay the loan in three years in order for that to work. You really want to look outside the dealership for financing. You will be able to get better terms, which will make the vehicle much more affordable. Your bank or credit union is a good place to start for vehicle financing. Often, you will be able to get great rates through your own financial institution. On top of that, they can automatically deduct your payments so you will never be late on a payment. When you choose your bank, it is easy to get a prime rate. That means you will save a great deal on interest. If you are not pleased with the rate offered by your bank, you can then go on the internet and browse financing options. Your best bet is to use a site that offers comparisons. You can then search for the lowest interest rate. When you do this, make sure you read all the fine print in the agreement. Also, go with a reputable financing company. If you have not heard of them, they might not be the company you want to go with. At the same time, there are several quality lenders you can find online. When you use one of them, you are likely to get a great rate. Therefore, you want to use the internet to shop for a rate. There are quite a few financing options available, so you do not want to go with one that is not a good deal. Take the time to look around so you can get good financing. It might take some time to find the financing you want, but it is well worth the time and effort once you find that perfect loan. Just keep in mind you want to be careful when it comes to financing. Always read the fine print and do not get locked into an agreement that is not fair. Analyze the agreement and be sure you completely understand it before committing to financing. With that in mind, you can start to shop for financing. You are certain to find some great rates if you keep your eyes open. Simply look around at all available options and pick the one that is best for you. You will then save money and have a loan you are happy with.
Posts Tagged ‘Financial Institution’
Business Financing Is Still Available But It Is Not Cheap Or Easy To Obtain
December 6th, 2009Let’s face it, Banks are just not lending. It does not matter that they received over $350 billion of your money with more to come. It does not matter how strong your business is or how great your credit history. They just are not lending.
Most financial institutions have pulled back credit to businesses. Nearly every well known financial company has stopped offering business programs – be it business credit cards, trade and supplier financing, commercial loans or working capital lines of credit.
These establishments cite poor market conditions and unfavorable economic outlooks.
The quandary comes when businesses, facing the same market conditions, are looking for ways to survive and in some cases grow. In the past, healthy, established businesses could always turn to their banks for needed financing; be it for a short term line of credit or to restructure existing debt; freeing up needed cash flow. Just not so today – especially since part of the blame of our economic toils rests on the shoulders of these same banks.
So if businesses cannot fall back on their bank or other financial institution, what are they to do?
The only real viable financing option for many businesses in this market is private, non-bank lenders. I am not talking about equity capital or private placements. I am talking about investors who have pulled their money out of a falling stock market and are looking to lend it to solid companies in hopes of substantial interest rate returns.
What is this you might ask? There is always a struggle between supply and demand and the arbitrage opportunities that open to investors who know where and when to look.
A few years ago, banks and other financial institutions were lending at rates below or at market level in comparison to potential opportunities – they were offsetting lower returns with fees and deal structure (e.g. ratcheting rates). This left most private investors out of the lending market.
Today, banks are not lending and investors are taking their place. If banks are not lending and businesses need capital – there is a funding gap. This funding gap is wide and does not have many players or competition. Further this gap has huge barriers to entry as capital to invest is not easily obtained or easily given away. What I am saying is that some very smart investors have realized that there is an opportunity here for them to earn substantial returns from lending money to proficient businesses and their owners.
Thus, they are filling the gap left by banks and remain the only real source for business capital. But, they will only do so at very high interest rates.
What I am trying to say is that there are non-bank lenders that will fund companies. But, the power (thus the arbitrage) is in their hands – not yours – making your ability to receive funding both hard and costly.
The products they offer come with high interest rates, huge fees, and deal structures that are extremely favorable to them. These lenders want to see strong (very strong) credit histories, low debt-to-income ratios, and very high repayment abilities. Additionally, should a business have collateral, the property (equipment, machinery, inventory, A/Rs, purchase orders, sales receipts, etc) must be valuable and easily saleable. Gone are the days of 80% and more loan-to-values. Most of these lenders will only lend 50% to 60% against such collateral – especially if it involves a cash out or cash advance option.
Now, I know this does not seem fair – but what is fair in this market? Banks are not lending – businesses need money. You and your business must either take what it can get or get nothing. These investors – the only entities that are still providing money to businesses – could also stop lending if they feel the returns are not there. Then, there would be no business funding at all.
Private investor lending or advance options include:
Accounts Receivable Factoring, Purchase Order Financing, Business Cash Advances, Equipment Loans & Leases and Personal Loans. There also remains a few investor back lenders that will finance the acquisition of a business (without real estate) – all provided the business is cash flow positive, has excellent credit histories (both owners and business) and can provide adequate financials and tax returns to prove it.
Just remember – these are not cheap and by no means easy to obtain – you and your business must still demonstrate a willingness and ability to repay these loans and advances as well as provide (in most cases – Business Cash Advances do not apply here) collateral values that are very favorable to the lender.
But, if this is all that is available – when banks and other financial institutions are not lending to businesses – private non-bank lenders may just be the answer you need to get you though.
By: Joseph Lizio
