#how does a equity loan works

[todaynewsonline]

How to Get a Startup Business Loan with No Money

How to Get a Startup Business Loan with No Money:- Starting a business is a dream for many entrepreneurs, but the biggest challenge they face is financing their ideas. While most people believe that starting a business requires a lot of capital, this is not always true. There are several ways to get a startup business loan with no money, and in this article, we will explore some of the best…

[seniorsfirstau]

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[simply-ivanka]

Why Do the Young Vote Left?

Socialist teachers lead them to think of government as a free-money tree.

It’s the gifts. The progressive vibe is that big government will take care of you. It knows what’s best for you. It will redistribute money how it pleases. You need to put a smile on your face while it takes away your laurels, guns and money. “We believe in the collective,” Ms. Harris declared, much like Hillary Clinton’s “it takes a village.” Equity in Schenectady. Handouts for all.

You want proof? Ms. Harris’s Senate voting record is leftward of socialist Bernie Sanders. Vice-presidential candidate Tim Walz fawns over China, saying “everyone is the same and everyone shares.” Viva la revolución and Che Guevara T-shirts for all.

This is antifreedom. Too many of today’s youth fall in line with progressives because they’re undereducated and overindoctrinated with someone else’s agenda. I watched in horror as local high-school biology classes spent weeks on the science of recycling centers and only a short afternoon on mitochondria and mitosis. Profit is a bad word. It’s gimme, gimme, whether it’s student loan forgiveness, free healthcare or tax credits.

Who’s to blame? Misguided capitalism-hating social-studies teachers to start, with Tim Walzian thinking: “One person’s socialism is another person’s neighborliness.” Who is he, Mr. Rogers? Add like-minded college professors. Work ethic and ambition are evaporating.

Worse, Pew Research notes almost a third of currently childless 18- to 34-year-olds aren’t sure if they ever want children. Why? The Harris campaign’s “climate engagement director,” Camila Thorndike, is among the hesitant, telling the Washington Post, “I want to protect them from suffering.” Perpetually pessimistic progressive prognostications induce fear. No wonder U.S. fertility rates are at historic lows.

OK, I know I’m asking for trouble. Every time I write about youth, I get a chorus of comments and tweets telling me I’m an old man screaming, “Hey you kids, get off my lawn.” Yeah, yeah. Very clever. I’m not that old. But in the Kamala collective—as California attempted—private “ornamental” lawns are out, and drought-resistant vegetation is in. Progressives literally want you off your own lawn.

My conversations with young folks who do exhibit some actual drive show their confusion: “I want to do a startup.” Great! To do what? “A sustainable something or other. To save the planet.” OK, is it productive? “What’s that?” Does it scale? “Huh?” Will it do more with less? “Not really, it needs lots of money to keep going and save more of the world.” Sounds like a nonprofit. (That usually invokes a smile.) Actually, wealth comes from delivering ever-cheaper stuff to millions of people, not handouts. “I don’t care about money.”

OK, I say, but progress and societal wealth happen when you delight customers and postpone consumption to reinvest profits into better products. The looks on their faces are as if I’m describing Chinese arithmetic.

Our youth aren’t lazy but lost. Progressives have strong opinions about society but no viable solution beyond handing out other people’s money—taken from the few who actually are productive, drive progress and generate wealth by fulfilling customer needs. It’s a downward spiral: When progressives tax—screaming “fair share!”—they cripple the productive few who actually create the real non-burger-flipping, get-out-of-your-parent’s-basement jobs.

To aggressive progressives, government is simply a magic money tree. Vote left and dollars appear. The gross incompetence of government—think billions for eight electric vehicle chargers—destroyed healthcare (thank you, ObamaCare) and education (assisted by Randi Weingarten’s teachers union) and is close to destroying energy (net zero), even while the Biden-Harris administration works hard to destroy Big Tech—one of the few productive industries. And I’ll never forgive progressive Hollywood for turning “Star Wars” into unwatchable wokey Wookiee drivel.

What industries will be left standing? Who cares, because the dreamy types think generative artificial intelligence will kill all jobs and government will provide universal basic income so they can Zyn, TikTok and play College Football 25 videogames all day. A naive youthful triumphalism.

This is a false endgame. There is so much more to be invented: drugs, immunotherapy, fusion, self-folding clothes, humanoid robotics, flying cars. Hard brain work plus quality recharging leisure time is the goal, not a nation of welfare queens.

I feel sorry for the youth that do care, do work hard, are productive and help push the boulder of progress up that steep slope, while essentially carrying all the others on their backs. It’s you against the collective, the village, which is always about being supported, pampered, living off someone else’s hard work and then complaining that the handouts aren’t big enough. So, yeah, get off my lawn, while lawns are still allowed.

[poipoipoi-2016]

@youzicha

#trying to understand wtf is happening to svb because uh. i want my salary

The business model of banks

The way banks work is that they take in deposits and make loans.

So I put money in a bank, but ALSO I took money out of a bank to get a car loan which let me buy the car that I used to commute to work to pay off the car loan. And also drive to Death Valley. GOOD little car. Could go from Vegas to SF on a tank of gas.

What this means from a bank's perspective is that your bank balance is a problem and the loans they make are assets. Because you took in $20K of deposits and then gave me an $18K car loan that I paid back at $400/month for 5 years. And at the end of 5 years, you will have taken $18000 and turned it into $24000.

And if one person asks for $2K back, you have $2K. And if someone(s) a year from now asks for $10K back, you have:

$2K in cash

But also the $4800 in cash I paid you last year. Minus the amount of money you spent last year running the actual bank.

The money used to found the bank (The Equity)

The ability to shop around and say "Poi is going to pay us $400/month every month for the next 4 years and if he stops doing that, you get a gently used Chrysler 200 to sell. How much are you willing to give us for that cashflow?" <- THIS IS THE PROBLEM

So as long as you are:

Liquid, meaning that you can give people their money back when they ask for it

Solvent, meaning that if EVERYONE asked for their money back, you'd sell off all the loans you'd made, give them their money back, and also have a >$0 pile of cash to go Scrooge McDuck in after you shut down the bank.

you get to keep existing.

If you're liquid, but non-solvent and somehow manage to hide it, this is called Bernie Madoff. But also "The Bank of Japan in 2023".

If you're solvent, but non-liquid, someone rolls up and buys your assets for "The value of your liabilities and also this Snickers Bar" and that's a pretty standard action.

And if you're non-liquid and insolvent, uh look crypto is weird but go look at FTX. There's a list of creditors and several months or even years from now, you'll get a fraction of your deposits back based on the recovery value of the underlying assets.

What specifically happened to SVIB

So you are a bank in 2019. And specifically, you are the Bank of Startups. And startups are very bad loan risks and also have giant piles of VC checks so they don't actually need loans.

$200 Billion of VC checks in fact. Which they gave to you. And because you're a good bank, you put $20 Billion in the cushion fund and now you have to figure out how to use $180 Billion to generate enough money to keep running the bank.

Unfortunately, it's 2019 and all the liquid risk-free assets pay 0.08% and that's not enough money to pay your bank tellers. So you make a (in retrospect dumb, in practice I'm not sure it's dumb enough I scream just at SVIB) decision to put it into:

A bunch of Treasuries that pay 1.5% or so

A bunch of mortgage-backed securities which are default risk-free b/c of post-2008 reforms. If someone forecloses, the government pays you back at par.

Corporate bonds which are risky but hey that's why you charged 5% right?

So these are illiquid, but they're not like... that illiquid and if interest rates ticked up a percentage point, a 5-year bond with 3 years to go is still like 98% of face value, it's totally fine.

And now you have $4-6 Billion/year to pay your bank tellers with and also improve that cushion.

And if you don't do these things, Silicon Valley Investment Bank does not exist. CHASE BANK does not exist. This was a prerequisite to having banking services in this country post-2008 in literally 0 interest rate environments.

And then the Fed goes on a historically unprecedented interest increase. So your 1.x% bonds are now competing in the market with 5% bonds and your 2.6% mortgages are competing with 7% mortgages and hoooo boy.

A 2.6% $400K mortgage pays you $20K/year and is currently worth $260K at 7%. $180 Billion of assets marked down to ???? Billion. 7 years to break-even and your bank tellers need to get paid.

Now for most banks, this isn't a problem. They're an actually profitable Bernie Madoff by design as a feature. They can't give everyone their money back, but they don't have to. And the bonds are paying up and the mortgages are paying up and 5% nominal GDP growth isn't a lot, but it's something and of course, you're making NEW loans at 7% so if you can just keep paying 0% interest on bank deposits and keep pulling in 7% interest loans, you'll make it out of the next few years, and you're suddenly solvent again.

Except for you.

Because you are the Bank of Startups.

And when interest rates went up, VC funding went down. So you have these perfectly good businesses (for now at least) that are constantly and continuously drawing down on their bank accounts.

And remember, this isn't 1982. You're only making 2%. Your cap ratio is 5%. All those mortgages paying in 5% of book value every year and if you get out over your skis, you cease to exist. You're going to hear the words "Duration Risk" a lot and this is that.

So you try to do an equity raise. You'll sell the rights to some of that 5% cashflow (and remember, it's increasingly 7% interest/10% cap which is slightly more exciting) in exchange for the money you need NOW TODAY to pay out your withdrawals.

At which point Andreesen goes "Uh what my friends?", tells all of his buddies to pull their cash, and $42 Billion gets withdrawn in less than 24 hours. Leaving $160 Billion behind.

And now we remember that bank accounts over $250,000 (IE: One paycheck at a $6.5 Million payroll company) aren't technically FDIC insured.

Lessons Learned

And the thing is that I really can't just blame SVIB here. They got stuck in a pretty terrible trap caused by the US Government. And the US Government likes it when you buy Treasuries and likes it when you buy and SVIB was, more or less, doing the things you as a society wanted them to do.

And the Federal Reserve explicitly destroyed them for it.

Don't get me wrong, they were weird. But I'm not sure they were weird enough especially given the constraints of 2019-2021 that I can just go "Eh, screw them". Spread that blame AROUND.

And any bank that can survive a FORTY PERCENT drawdown in the value of the underlying assets.... isn't a bank. At least not as we mean it here in 2023. The Fed's stress tests involve a 'severely adverse scenario' where 10-year US Treasury yields are at 0.7% (and only get to 1.5%). They're currently at 3.6%.

The second set of lessons that we learned today goes like this:

There are lots and lots and LOTS of reasons that small or medium businesses might temporarily or permanently want more than $250K in raw USD cash in a bank account at some point. This is now a banking risk. (There's some tricks you can play if you're really large, but those also have limits)

However, if you bank at Chase Bank (or any other bank on the too-big-to-fail list), you are infinitely insured. Because CHASE BANK is backed by the entire combined firepower of the US Government and banking sectors. If Chase Bank stops existing, the nukes have fallen.

So why would I ever use a local bank for anything at all ever again? At which point you now get another round of contagion in the system where everyone gets out of these regional banks. Because remember, EVERY BANK IN THE WORLD INCLUDING THE BANK OF JAPAN is now insolvent.

Because they were destroyed for the crime of "Doing exactly we wanted them to do". Oh sure, in a risky sort of way, but see that note above about the Fed Stress tests.

Where "What we wanted them to do" involved buying government debts

Are you uh... 100% absolutely certain you want to be teaching those lessons? That if you buy US Treasuries, you will be destroyed for your crimes? That if you use a regional bank and they are destroyed for their crimes of making loans to the Feds, your business dies with it?

[infamousbrad]

They had "pig butchering" scams in the 1930s.

Please tell your friends and family about this, because you don't know who doesn't know this. I forget how many people don't know this, too, but then I remember that I learned about it from a 1940 non-fiction best-seller that I only heard about because it was popular among 1940s and '50s science fiction authors. (And then later made into a movie called "The Sting," which, via a long chain of copies, also got made into a long-running TV series called Leverage.) The story goes like this:

The Roper identifies and ropes the Mark, who gets handed off to the Grifter, who Shows the Mark the Store. The Store Baits the Hook, then puts the Mark On the Send, and then Stings the Mark when they get back to the Store, and then Blows them Off.

I just got around to watching the John Oliver episode about what the FBI now calls "pig butchering" scams, and, having read David Maurer's original 1940 book about the professional jargon of long-con confidence artists, The Big Con, I recognized every step of it. I spent the whole segment saying the same thing over and over again: "Oh, is that what they're calling that now?"

Do you believe that basically every rich person in the world got rich because they got away with some scam? Of course you do. But are you more jealous than angry? Do you wish someone who knew you would like you enough to let you in on the scam? That's why you're a Mark.

A Roper is a person who's trained in how to go into places where it's normal to have conversations with strangers (back then, cross-country trains and inter-continental ocean liners; nowadays, your smartphone) and easily make friends. Most of the Roper's new friends quickly get ignored; what they're looking for is a resentful, jealous middle or upper middle class person who wishes someone would tell them the illegal way to get rich.

That's when the Mark finds out that the Roper is in the middle of getting rich him/herself! Thanks to The Grifter! And asks the Mark would you like to meet the Grifter?

The Grifter works out of the Store; Ropers bring Marks to him/her. The Store looks entirely convincingly like a place (or an app or a site) where someone dirty, on the inside, could easily cheat people out of tons of money, by doing things like trading on secret information. And the Mark is happy to find out that the Grifter could easily make tons of money for them if they had anything to invest in the Store. The Mark hands over the small amount of money they have on them and, very quickly, the Grifter Baits the Hook: gives them their winnings, and apologizes for how small they were. If only the Mark had more money to invest ...

At which point the Mark, who is On the Send, goes back home and empties out savings, takes out one or more equity loans, maybe even embezzles from his/her work (fully intending to put the money back) and brings it all to the Store.

At which point, instead of getting back winnings, the Mark gets Blown Off. If the Grifter does it smoothly, they can sting the same Mark over and over again: "It's not our fault, you did it wrong." Or "it's not our fault, this time the cops intervened, you're lucky you weren't arrested."

Any newly met "friend" who offers to tell you how to get rich is not your friend. You're the Mark and they're the Roper. The "way to get rich" method they offer you, that looks like it couldn't possibly be fake, too many people would have to be in on it? Is a Store, and they're making so much money off of Marks like you that they can easily hire that many people to play their parts. Oh, but the first time you tried it, you made money? Of course you did; how else would they put you On the Send? And when you come back from being put On the Send, you're not going to get rich, you're going to get Blown Off.

[anniekoh]

Two books on the pathological optimism of mainstream American discourse. 

Ehrenreich begins with her experience with breast cancer and the ubiquitous infantilizing teddy bears. One breast cancer foundation distributed gift totes that included rhinestone bracelets and a pink journal with a box of crayons. “Certainly men diagnosed with prostate cancer do not receive gifts of Matchbox cars.”

Bright-sided: How Positive Thinking is Undermining America by Barbara Ehrenreich (2009)

A sharp-witted knockdown of America's love affair with positive thinking and an urgent call for a new commitment to realism.

Americans are a "positive" people -- cheerful, optimistic, and upbeat: This is our reputation as well as our self-image. But more than a temperament, being positive is the key to getting success and prosperity. Or so we are told. In this utterly original debunking, Barbara Ehrenreich confronts the false promises of positive thinking and shows its reach into every corner of American life, from Evangelical megachurches to the medical establishment, and, worst of all, to the business community, where the refusal to consider negative outcomes--like mortgage defaults--contributed directly to the current economic disaster. With the myth-busting powers for which she is acclaimed, Ehrenreich exposes the downside of positive thinking: personal self-blame and national denial. This is Ehrenreich at her provocative best--poking holes in conventional wisdom and faux science and ending with a call for existential clarity and courage.

This reminder of how horribly wrong the economists were in the lead up to the 2008 mortgage/financial crisis from Ehrenreich.

Professional optimists dominated the world of economic commentary, with James Glassman, for example, a coauthor of the 1999 book Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market, winning a job as a Washington Post columnist and showing up as a frequent news show guest. Escalating housing prices were pumping up the entire economy by encouraging people to use their homes “like ATMs,” as the commentators always put it -- taking out home equity loans to finance surging consumption -- and housing prices were believed to be permanently resistant to gravity.

David Lereah, the chief economist of the National Association of Realtors, published a book in 2006 entitled Why the Real Estate Boom Will Not Bust and How You Can Profit From It and became “the most widely cited housing expert” at peak of housing bubble.

And how self-help culture nestles into Christian frames

As sociologist Micki McGee writes of the positive-thinking self-help literature, using language that harks back to its religious antecedents, “continuous and never-ending work on the self is offered not only as a road to success but also to a kind of secular salvation.” The self becomes an antagonist with which one wrestles endlessly, the Calvinist attacking it for sinful inclinations, the positive thinker for “negativity.”

Never Saw It Coming: Cultural Challenges to Envisioning the Worst by Karen A. Cerulo (2006)

People—especially Americans—are by and large optimists. They’re much better at imagining best-case scenarios (I could win the lottery!) than worst-case scenarios (A hurricane could destroy my neighborhood!). This is true not just of their approach to imagining the future, but of their memories as well: people are better able to describe the best moments of their lives than they are the worst. Though there are psychological reasons for this phenomenon, Karen A.Cerulo, in Never Saw It Coming, considers instead the role of society in fostering this attitude. What kinds of communities develop this pattern of thought, which do not, and what does that say about human ability to evaluate possible outcomes of decisions and events? Cerulo takes readers to diverse realms of experience, including intimate family relationships, key transitions in our lives, the places we work and play, and the boardrooms of organizations and bureaucracies. Using interviews, surveys, artistic and fictional accounts, media reports, historical data, and official records, she illuminates one of the most common, yet least studied, of human traits—a blatant disregard for worst-case scenarios. Never Saw It Coming, therefore, will be crucial to anyone who wants to understand human attempts to picture or plan the future. 

[beautifulpersonpeach]

BPP, sorry for spamming your inbox but pls answer just one question for me. Why would Hybe take out a loan to buy shares of SME if it was a good idea? Doesn’t this mean Hybe is struggling and SME is better and they have the upper hand?

**

Hi Anon,

Because leverage is typically cheaper than equity, especially if you’ve got the cashflow to service the loan. It costs next to nothing to use leverage when the alternative is diluting equity for your shareholders. HYBE would’ve been stupid to not use leverage since it’s essentially free money considering their working capital. Especially for shares in a company like SM where the value-add to HYBE is only incremental.

Like the fact is HYBE frankly does not need this SM deal to close (and you can clue this in from the structure of their financing deal), but the Kakao deal has 2nd and 3rd order implications that seriously compromise the integrity of the market.

Sigh, see this is exactly what I mean and why I say I do nothing here but laugh and listen to music. And the rest of what I say here is not to harp on you Anon, but your question is one I’ve seen in K-pop spaces of late and the reasonings of K-pop stans on this issue is so far out of step with reality I just have to unlook. Like I’ve said before, one thing you’ll quickly notice the more you spend time in k-pop spaces listening to k-pop stans, is that none of these people actually have any idea what they’re talking about.

For anybody who has been paying attention, SM has been in a bad way since at least 2019 when analysts started drawing attention to their skinny margins (bled down by Lee Sooman skimming off the topline and from settlement payouts due to several lawsuits (from idols and companies) and federal fines. The Korean government had pardoned Lee Sooman for his crimes in 2004 and since then levied fines instead.)

This is why when I’d see them mention HYBE’s financial statements or stock movements or routine audits, having zero idea of what the Big3’s look like, I just laugh and move on. And hard as it might be to believe, I’m not even a fan of HYBE, some of their decisions have earned an eyebrow raise from me, but the fact of the matter is no entertainment company on the KRX is better run than HYBE and that’s been true for at least 2 years now.

Like I’m trying extra hard right now to be just matter-of-fact in what I’m saying because I don’t want to unnecessarily offend SM stans who are already sensitive from this embarrassing turn of events.

A lot of k-pop stans are financial illiterates and that’s okay because it’s probably true most people in general don’t know how to do their taxes on their own nor went to business school, thats fine. But coupled with the hyper-competitive nature of k-pop and the irrational virulent animosity k-pop stans have to anything connected to HYBE, it makes them insanely easy to manipulate. And that’s what that video SM published by Chris Lee does.

Because, again, anybody who has actually seen the statements of both companies can pick apart that video in no time at all for its half-truths and obfuscations. The purpose of the video is to fear-monger and given Chris Lee’s track record, was expected. What investors actually care about is if the tender offer is attractively priced for the book value of the company plus its growth multiple - a multiple that has expanded across the entire industry since BTS blew up globally in 2018.

Anyway, I’ll drop the work speak and get back to listening to music. All of this is entertainment though my heart hurts for the artists torn over their devotion to LSM and what’s happening - the hold he has over these people is no joke, but it’s also been interesting seeing all the ways stans of SM groups are coping lol.

[prophet-one]

SVB bank failure

I comprehend the reason why SVB failed: its a classic bank run where the bank does not have the liquid assets to fund withdrawals. This the “other shoe dropping” wrt the rapid increase in interest rates.

what stands out to me are two questions: why do companies have that much cash in the bank? How did the financial markets in general fail?

The SVB failed because the financial markets are NOT working. The markets are not providing suitable securities for companies to park their excess cash. SVB was probably seen as a “safe” place to store cash. That assumption is obviously false. 

Question: why did the corporate depositors have so much money in cash accounts versus other securities?

Two months ago I was discussing cash management with my financial advisor. The key point he made about Bonds and funds that invest in bonds, is to use rolling maturity. The bond values will lag the market (especially with rapid changes in interest rates), but you wont lose principle. (BTW the change in bond values has to do with the liquidity price not the book value... if you hold bonds to maturity, then you dont lose value). So, back to the question about the depositors... when you have a billion plus of cash to invest you should be able to do something better than stash it in a low interest chequeing account. Something doesnt seem right about that.

Question: why do corporate depositors have so much cash on hand in the first place?

The financial markets “should” provide companies with cash “when and as” they need it through equity and bonds and loans. When a company like Roku has over a billion dollars sitting around “just in case they need it”, this is a clear sign that the financial markets are not working. Different sectors have different requirements for liquidity; but having 2 to 5 years of excess cash on hand is well beyond any reasonable requirement.

I completely understand that companies like the security blanket of having 2 or 3 or 10 years of cash sitting around. However, that is a total waste of shareholder resources, given that shareholders can make better investments with that cash. There is supposed to be a tax on capital to disincentivize hoarding... I guess that tax is not high enough.

When the regulators have time to get around to sifting through remains; I would like them to investigate these two questions: why are corporations not investing their excess cash appropriates? why do corporations have so much excess cash, why cant corporations raise the cash they need in an efficient manner? 

[notebooknebula]

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[faryalkhanblog]

Can You Keep Your Property With an IVA? Everything You Need to Know

If you’re struggling with debt and considering an Individual Voluntary Arrangement (IVA), you may be wondering what will happen to your property. One of the key concerns for many people entering into an IVA is whether they will be able to keep their home, especially if they are pensioners or retirees who may rely on their property as a secure base for their retirement.

How Does an IVA Affect Your Property?

An Individual Voluntary Arrangement (IVA) is a legally binding agreement between you and your creditors to repay a portion of your unsecured debt over a set period, typically 5 to 6 years. During this time, you make monthly payments toward your debts based on what you can afford.

But what does this mean for your home?

In most cases, UK citizens can keep their property when entering into an IVA. However, there are certain conditions that may affect your ability to retain your home, particularly if you have significant equity in it. Here’s how it works:

Can I Keep My Property in an IVA?

Mortgage Payments: If you have a mortgage on your property, you will continue to make regular payments on that mortgage. Your IVA will not affect your mortgage payments, and as long as you keep up with these payments, you can keep your home.

Equity in Your Property: If you own your home outright or have substantial equity in it, your IVA may require you to release some of that equity toward your creditors. This could mean remortgaging your property or selling it to raise funds for your creditors. However, this only applies if your equity is above a certain threshold, typically around £5,000 or more.

Selling or Remortgaging: Toward the end of your IVA, your insolvency practitioner (IP) may review your property’s value to determine if there is any equity that can be released to help pay off your creditors. If it is possible to remortgage, you may be required to do so. If remortgaging is not an option, your IVA payments may be extended by up to 12 months to make up the shortfall.

Protecting Your Property: If you are pensioners or retirees and do not have significant equity in your home, it’s likely that you will not need to sell or remortgage. The IVA is designed to help you manage your debt in a way that minimizes the risk to your assets.

What Happens If I Can’t Remortgage My Property?

In some cases, remortgaging your property may not be possible, especially if you have little equity or face financial challenges such as pension income or other limited resources. If you can’t release equity, your IVA may be extended for an additional 12 months. This extension gives you more time to pay off your debts without forcing you to sell or remortgage your property.

What About Bankruptcy?

One of the key differences between bankruptcy and an IVA is how your property is treated. In bankruptcy, your assets, including your home, can be sold to pay off your creditors. This is not the case with an IVA. While you may have to release equity or extend the duration of your IVA, you are more likely to keep your home compared to a bankruptcy situation.

Key Considerations for UK Citizens Entering an IVA

If you’re considering an IVA, there are several factors you should keep in mind when it comes to your property:

Communication with Your IP: Be transparent with your insolvency practitioner (IP) about your assets and property. They can help you understand your options and ensure that your IVA is structured in a way that protects your home.

Property Value: If your home has significant equity, it’s essential to consider how releasing that equity will affect your finances in the long term. In some cases, your IP may be able to negotiate a solution that allows you to retain your property.

Secured vs Unsecured Debt: Remember that your IVA only applies to unsecured debt, such as credit cards, personal loans, and overdrafts. Secured debts, like mortgages, are not included in the IVA and will continue to be your responsibility.

How We Can Help

At Apply for IVA, we specialize in helping UK citizens navigate the IVA process, ensuring you understand the implications for your property and how to protect your assets. Whether you're a pensioner, retiree, or simply looking for a way out of debt, we are here to guide you every step of the way.

Take Control of Your Financial Future Today

If you’re considering an IVA and want to know more about how it will impact your property, contact us today for a free consultation. We’ll help you understand your options and work to find the best solution for your financial situation.

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How Does a Home Equity Loan Work?

How Does a Home Equity Loan Work?

How Does a Home Equity Loan Work?:- If you are a homeowner and need a large sum of money to finance a home renovation project or cover unexpected expenses, a home equity loan may be an option for you. In this article, we will explain how a home equity loan works, including its benefits and drawbacks, and provide tips for deciding whether it’s the right financial solution for you. Table of…

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What is SME and How Does It Work?

In today's business ecosystem, Small and Medium Enterprises (SMEs) are considered the backbone of the economy, driving innovation, employment, and economic growth. Let’s delve into what SMEs are, how they operate, and how platforms like MergerDomo empower their growth and sustainability.

What is an SME?

An SME (Small and Medium Enterprise) is a business entity characterized by its size, number of employees, and annual revenue. Definitions can vary by country, but they generally include:

Small Enterprises: Typically have fewer than 50 employees and modest annual revenue.

Medium Enterprises: Usually employ up to 250 people and have a higher but capped annual turnover.

SMEs operate across diverse sectors such as manufacturing, technology, retail, and services. They are pivotal for fostering innovation and competition, especially in emerging markets.

Key Features of SMEs

Flexibility and Adaptability: SMEs can quickly respond to market demands and changes.

Local Economic Impact: They often focus on local markets, supporting regional economies.

Innovation Hubs: Many SMEs drive innovation by exploring niche markets and adopting cutting-edge technologies.

Scalability: Though small, SMEs possess immense potential for growth with the right support.

How Does an SME Work?

SMEs operate by leveraging limited resources effectively to cater to a specific market. Here’s a breakdown of their functioning:

1. Business Model

SMEs focus on solving targeted customer problems, often through innovative solutions. Their smaller scale allows for customization and personalized service.

2. Funding and Resources

Financing for SMEs comes from a mix of:

Personal savings

Bank loans

Private investors

Platforms like MergerDomo, which connect SMEs with funding opportunities, including equity investors and debt providers.

3. Operations

Efficient resource utilization and streamlined operations are essential for SMEs to remain competitive. Digital tools and outsourcing play a significant role in enhancing productivity.

4. Market Strategy

SMEs often thrive on a customer-first approach, building strong community relationships and leveraging word-of-mouth or digital marketing strategies to expand their reach.

5. Growth Challenges

SMEs face challenges like limited access to credit, stiff competition, and regulatory hurdles. Addressing these requires strategic planning, innovation, and partnerships.

Challenges Faced by SMEs

Despite their critical role, SMEs encounter several hurdles, including:

Access to Capital: Difficulty in securing loans or investments.

Technology Adoption: Limited resources to invest in digital transformation.

Market Competition: Competing with larger enterprises on pricing and reach.

Regulatory Compliance: Navigating complex legal and taxation frameworks.

How MergerDomo Empowers SMEs

MergerDomo, a leading global B2B platform, is transforming the SME landscape by providing tailored solutions to help them grow and thrive. Here’s how it works:

1. Capital Access

MergerDomo connects SMEs with investors, financial institutions, and other funding sources, ensuring businesses get the capital they need to scale. Whether it’s equity funding or debt solutions, SMEs find the right financial partners.

2. Strategic Collaborations

Through merger and acquisition (M&A) opportunities, SMEs can explore strategic partnerships, enabling them to diversify their offerings or expand geographically.

3. Digital Transformation

MergerDomo helps SMEs adopt cutting-edge technologies by partnering them with innovation providers, ensuring they remain competitive in a fast-evolving market.

4. Business Advisory

SMEs receive expert advice on market trends, valuations, and funding strategies via MergerDomo’s advisory services tailored to their industry and size.

5. Global Network

MergerDomo offers SMEs access to a global network of investors, collaborators, and service providers, opening up opportunities that might otherwise be unavailable.

Why SMEs Are the Future

SMEs contribute significantly to GDP and employment worldwide, proving their importance to economic stability and growth. However, their success depends on support systems that address their unique needs. Platforms like MergerDomo play a vital role by bridging gaps in funding, technology, and partnerships.

Final Thoughts

SMEs are dynamic entities that fuel innovation and economic progress. By leveraging the right tools and platforms like MergerDomo, SMEs can overcome challenges, unlock growth opportunities, and achieve their potential in today’s competitive market. Whether it’s securing funding, finding the right partner, or adopting new technologies, MergerDomo is the trusted ally for SMEs looking to thrive in the modern business ecosystem.

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What Are Large Balance Real Estate Loans? Key Insights

Large balance real estate loans are financial instruments tailored to meet the needs of investors and businesses seeking substantial funding for high-value property purchases or development projects. These loans are typically used for commercial real estate, multi-family properties, and large-scale investments that require significant capital. Understanding the dynamics of these loans can help borrowers make informed decisions and maximize the potential of their real estate investments.

In this blog, we’ll explore what large balance real estate loans are, how they work, their benefits, potential drawbacks, and key considerations for prospective borrowers.

Understanding Large Balance Real Estate Loans

Large balance real estate loans & Hard Money Loans for Real Estate Investors cater to borrowers who require financing exceeding the limits of conventional loan programs. These loans are often tailored to high-value transactions, typically involving sums in the range of millions of dollars.

Such loans are commonly utilized for:

Commercial Real Estate Investments: Office buildings, retail spaces, or industrial facilities.

Multi-Family Housing Projects: Apartment complexes or large rental properties.

Development Projects: Land purchases or construction projects requiring substantial funding.

These loans are generally offered by private lenders, investment firms, or financial institutions specializing in high-value real estate financing. They often involve customized terms to suit the specific needs of the borrower and the project.

How Large Balance Real Estate Loans Work

Large balance loans operate similarly to traditional real estate loans but with a few distinctions:

Loan Amounts: The minimum loan amount typically starts at $1 million and can go much higher, depending on the property and borrower profile.

Collateral: These loans are secured by the property being purchased or developed, reducing the lender’s risk.

Interest Rates: Rates can be either fixed or variable and are often slightly higher than conventional loans due to the higher risk involved.

Repayment Terms: Borrowers may encounter flexible repayment structures, including interest-only periods, balloon payments, or longer loan terms.

Underwriting Process: Given the large sums involved, lenders conduct detailed due diligence, which includes evaluating the borrower’s creditworthiness, the property’s value, and the investment's potential return.

Benefits of Large Balance Real Estate Loans & Large Balance Commercial loans

For investors and developers, these loans offer several advantages:

Access to Significant Capital: They provide the necessary funds for high-value investments that might otherwise be unattainable.

Customizable Terms: Borrowers can often negotiate loan terms tailored to their financial strategies and project timelines.

Leveraging Opportunities: These loans allow investors to leverage their assets and scale their portfolios without liquidating existing properties.

Potential Tax Advantages: Depending on the jurisdiction, interest payments on these loans may be tax-deductible.

Drawbacks and Challenges

While large balance loans can be advantageous, they are not without challenges:

Higher Qualification Requirements: Lenders typically require strong credit histories, substantial down payments, or significant equity contributions.

Increased Risk: Borrowers take on considerable financial obligations, which can be daunting if the investment does not yield the expected returns.

Lengthy Approval Process: The extensive due diligence required can make the application process longer than for conventional loans.

Market Dependence: The success of the investment—and the ability to repay the loan—is often tied to market conditions, making these loans inherently riskier.

Key Considerations for Borrowers

Before pursuing a large balance real estate loan, consider the following:

Assess Your Financial Position: Ensure you have the income, assets, and credit history necessary to secure a loan of this size.

Understand the Market: Conduct thorough research on the property, its location, and the broader market trends.

Evaluate the Terms: Carefully review the loan’s interest rate, repayment structure, and potential fees to determine if they align with your investment goals.

Plan for Contingencies: Large loans come with significant risks. Develop a backup plan to manage unexpected costs or market downturns.

Consult Professionals: Engage with financial advisors, real estate consultants, and legal experts to ensure you make informed decisions.

Who Can Benefit from These Loans?

Large balance real estate loans are ideal for:

Experienced Investors: Those looking to expand their real estate portfolio with high-value properties.

Businesses: Companies seeking to acquire or develop commercial spaces.

Developers: Professionals needing substantial funding for construction or large-scale projects.

Alternatives to Large Balance Loans

If a large balance loan seems daunting or unsuitable, consider other options, such as:

Joint Ventures: Partnering with other investors to share costs and risks.

Crowdfunding: Raising capital from multiple small investors.

Bridge Loans: Short-term financing options that provide flexibility for quick acquisitions.

Conclusion

Large balance Real Estate Investment loans are powerful tools for investors and developers looking to capitalize on high-value opportunities in the real estate market. While these loans offer access to significant capital and tailored terms, they also come with considerable risks and responsibilities.

To make the most of these loans, prospective borrowers must conduct thorough research, assess their financial readiness, and work with experienced professionals to navigate the complexities of large-scale real estate financing. When used strategically, these loans can unlock incredible potential and drive substantial returns on investment.

Read Also: Nationwide Hard Money Lending: Quick Funds for Real Estate

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So, How Does Equity Release actually work

If you are over the age of 55 and seeking to unlock equity in your property then an equity release loan could be just what you are looking for. 

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Akermon Rossenfeld Co - What Is Debt Consolidation, and How Can It Help You?

When faced with multiple debts, managing various payments, interest rates, and deadlines can become overwhelming. This is where debt consolidation can be a game-changer. Akermon Rossenfeld Co., known for its expertise in debt recovery, also helps individuals explore options to manage and potentially reduce their debt load. Let's dive into what debt consolidation is, how it works, and how it might help simplify and strengthen your financial future.

What Is Debt Consolidation?

Debt consolidation combines multiple debts—like credit cards, personal loans, or medical bills—into a single loan with one monthly payment. The goal is to streamline payments, ideally with a lower interest rate or extended payment term, making it easier to manage finances and work toward becoming debt-free.

Through Akermon Rossenfeld Co.'s assistance, debt consolidation becomes a practical, structured process, providing a straightforward approach to tackle your financial obligations. The process is particularly helpful for those juggling several high-interest debts, as it may lower monthly payments and help regain control over finances without the confusion of multiple due dates and amounts.

How Does Debt Consolidation Work?

Debt consolidation can happen through various channels. Here are the most common approaches:

Debt Consolidation Loan A debt consolidation loan combines existing debts into one larger loan, ideally with a lower interest rate. If approved, you’ll receive funds to pay off your other debts, leaving you with one loan payment to focus on each month.

Balance Transfer Credit Card Some people opt for a balance transfer credit card with a low or 0% introductory interest rate. By moving high-interest credit card balances onto one of these cards, you can potentially save on interest, especially if you can pay off the balance before the promotional period ends.

Home Equity Loan or Line of Credit Homeowners may choose to consolidate debt by using a home equity loan or line of credit, which typically offers lower interest rates than personal loans or credit cards. However, it's essential to consider that your home serves as collateral, so you’ll want to make sure this is a manageable, responsible option.

Debt Management Plans (DMPs) With a DMP, credit counseling agencies work with creditors to negotiate lower interest rates or monthly payments on your behalf. Instead of paying multiple creditors, you’ll make a single monthly payment to the agency, which then distributes it to your creditors.

How Debt Consolidation Can Help You

Here’s how debt consolidation, with Akermon Rossenfeld Co. guiding the process, might improve your financial situation:

1. Simplified Finances

Consolidating debt means fewer bills to remember and pay. With just one payment each month, it’s easier to stay organized and avoid missed payments, which can affect your credit score. Simplicity in finances can reduce stress and help you feel more in control.

2. Potential Interest Savings

High-interest rates on credit cards or unsecured loans can quickly add up, especially if you only make minimum payments. A consolidation loan with a lower interest rate could significantly reduce the amount you pay over time, putting more money toward principal rather than interest.

3. Improved Credit Score

Managing multiple debts can sometimes cause credit utilization to rise, negatively impacting your credit score. Debt consolidation can help lower your overall credit utilization, which may improve your credit score over time, especially if you consistently make on-time payments.

4. Easier Budgeting

With only one monthly payment, budgeting becomes simpler. You can better predict your expenses, avoid late fees, and allocate any extra funds toward savings or other financial goals. A clear monthly expense also allows you to more easily see your progress, which can be motivating as you pay down your debt.

5. Stress Reduction

Dealing with debt is often stressful, but debt consolidation can provide a sense of relief by simplifying payments and potentially lowering costs. This can lead to less financial anxiety and greater peace of mind as you work toward financial stability.

Is Debt Consolidation Right for You?

While debt consolidation offers many benefits, it's essential to evaluate whether it aligns with your financial situation. Here are a few considerations:

Current Credit Score: Better credit scores may qualify for lower interest rates, making debt consolidation more advantageous.

Monthly Cash Flow: If your budget can handle a single, predictable monthly payment, consolidation might help manage your debt more efficiently.

Long-Term Financial Goals: If you aim to become debt-free within a specific timeframe, debt consolidation might provide the structure you need.

How Akermon Rossenfeld Co. Can Assist

Akermon Rossenfeld Co. specializes in debt recovery but also understands the importance of helping individuals and businesses manage their debt effectively. Their team can offer guidance on debt consolidation options and provide insights into what might work best for your unique financial situation.

By working with knowledgeable advisors, you can make an informed decision that supports your financial goals. Akermon Rossenfeld Co. strives to empower individuals with tools to manage debt responsibly, ensuring you have the support needed every step of the way.

Conclusion

Debt consolidation can be a powerful tool for managing debt, reducing interest payments, and gaining control over your finances. With Akermon Rossenfeld Co.’s support, you can explore options to streamline your payments and potentially lower overall costs. By simplifying debt management, debt consolidation offers a pathway toward financial freedom, helping you focus on building a stronger financial future.