financial and legal issues – Disaster Recovery Playbook http://disasterrecoveryplaybook.org/ Thu, 26 May 2022 00:11:16 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://disasterrecoveryplaybook.org/wp-content/uploads/2021/06/icon-92.png financial and legal issues – Disaster Recovery Playbook http://disasterrecoveryplaybook.org/ 32 32 Wauwatosa Renaissance Milwaukee West Hotel secures $300,000 loan from city https://disasterrecoveryplaybook.org/wauwatosa-renaissance-milwaukee-west-hotel-secures-300000-loan-from-city/ Fri, 19 Mar 2021 08:45:03 +0000 https://disasterrecoveryplaybook.org/wauwatosa-renaissance-milwaukee-west-hotel-secures-300000-loan-from-city/ An upscale hotel, set to open in August, is getting more financial aid from the city as the hospitality industry continues to struggle during the coronavirus pandemic. The Wauwatosa Common Council has approved a matching forgivable loan of $300,000, which will come from the city’s redevelopment reserve funds. The Renaissance Milwaukee West Hotel, at 2300 […]]]>

An upscale hotel, set to open in August, is getting more financial aid from the city as the hospitality industry continues to struggle during the coronavirus pandemic.

The Wauwatosa Common Council has approved a matching forgivable loan of $300,000, which will come from the city’s redevelopment reserve funds.

The Renaissance Milwaukee West Hotel, at 2300 N. Mayfair Road, was originally scheduled to open in July. However, plans changed when the coronavirus pandemic hit, and the hotel announced that it would open in august Instead.

The hotel is part of the Marriott Renaissance hotel chain.

During Tuesday’s financial affairs committee meeting, Ald. Heather Kuhl said she would prefer the money to be spent on struggling small businesses.

“While I’m generally in favor of this project, I really struggle with the idea that we’re going to take a Marriot-supported hotel, which is already getting help from TIF, and give them $300,000 that we could use to support all of our small businesses,” Kuhl said.

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After returning PPP funds, Ashford Hospitality Trust misses almost all of its loan payments https://disasterrecoveryplaybook.org/after-returning-ppp-funds-ashford-hospitality-trust-misses-almost-all-of-its-loan-payments/ Fri, 19 Mar 2021 08:45:03 +0000 https://disasterrecoveryplaybook.org/after-returning-ppp-funds-ashford-hospitality-trust-misses-almost-all-of-its-loan-payments/ Struggling hotel REIT Ashford Foster Trust continues to struggle under the weight of the coronavirus crisis. The DFW-based company defaulted on interest and principal on nearly all of its loans due in early April, according to an earnings report. Ashford said in its earnings report on Wednesday that failure to make those payments constituted a […]]]>

Struggling hotel REIT Ashford Foster Trust continues to struggle under the weight of the coronavirus crisis.

The DFW-based company defaulted on interest and principal on nearly all of its loans due in early April, according to an earnings report.

Ashford said in its earnings report on Wednesday that failure to make those payments constituted a default, and the hotel operator is now working directly with lenders on possible loan forbearances and agreeable workout solutions.

Ashford Hospitality Trust and its affiliate brand, Braemer Hotels & Resorts, faced a month of scrutiny when parent company Ashford Inc. and its subsidiaries collectively received around $59 million in loans from the Small Business Administrationit is Paycheck Protection Program.

The PPP was designed by Congress to help businesses cover payrolls and other critical expenses during the coronavirus crisis.

Early high-level guidance said the program was for businesses with fewer than 500 employees and said loans would be capped at $10 million. The program and some recipients came under significant criticism when news reports showed large companies like Ashford were receiving funds through numerous affiliates, while smaller companies were struggling to enter the program.

When the federal government changed the terms of the program, Ashford returned all the money there collected via PPP.

Ashford has suspended operations at 23 properties and has 93 other properties operating at reduced levels. The company cut planned capital spending by about $95 million and suspended ordinary dividend payments, saving about $7 million per quarter, according to the earnings report.

Even with limited operations and drastic cuts, Ashford says his hotel’s cash burn rate is about $20 million a month. The company ended the last quarter with $240 million in cash and cash equivalents and $127 million in restricted cash.

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Guaranteed rate to pay $15 million to settle FHA, VA loan breach claims https://disasterrecoveryplaybook.org/guaranteed-rate-to-pay-15-million-to-settle-fha-va-loan-breach-claims/ Fri, 19 Mar 2021 08:45:02 +0000 https://disasterrecoveryplaybook.org/guaranteed-rate-to-pay-15-million-to-settle-fha-va-loan-breach-claims/ Guaranteed rate will pay $15.06 million to settle allegations he breached Federal Housing Administration and Department of Veterans Affairs loan rules. the justice department announced Wednesday that Guaranteed Rate, one of the nation’s largest direct-to-consumer lenders, has reached an agreement to settle accusations that the company “knowingly violates material program requirements when it originated and […]]]>

Guaranteed rate will pay $15.06 million to settle allegations he breached Federal Housing Administration and Department of Veterans Affairs loan rules.

the justice department announced Wednesday that Guaranteed Rate, one of the nation’s largest direct-to-consumer lenders, has reached an agreement to settle accusations that the company “knowingly violates material program requirements when it originated and underwrote mortgages.” insured by the FHA or guaranteed by the VA.

Companies that participate in FHA and VA loan programs, like Guaranteed Rate, have the power to originate and underwrite mortgages without the government needing to review loans to ensure they are compliant. the underwriting and set-up requirements of each agency.

Under program rules, lenders are required to follow FHA and VA rules to ensure that only mortgages that meet “key credit and underwriting criteria” are government insured or guaranteed.

And according to the DOJ, the guaranteed rate would have violated these rules.

In a statement, the DOJ said it asserted that the guaranteed rate “knowingly failed to comply with material program rules that require lenders to maintain quality control programs to prevent and correct underwriting deficiencies, self-report any materially deficient loans they identify and ensure that the underwriting process is free from conflicts of interest.

As part of the settlement, Guaranteed Rate admitted that it “failed to comply with applicable self-reporting requirements, that its FHA underwriters received commissions and gifts in violation of program rules, and that it were instances in which its government underwriters were instructed not to review documents relevant to the underwriting decision,” the DOJ said.

The DOJ also said Guaranteed Rate admitted that it “certifies and the government insures and guarantees Guaranteed Rate-approved loans that were not eligible for FHA mortgage insurance or VA loan guarantees,” adding that the loans would not have been approved for FHA or VA. insurance with the actions of Rate Guaranteed.

In a statement provided to HousingWire, Guaranteed Rate said the issues in question involved a “limited number of loans” and said none of the alleged breaches were on purpose.

“Rate Guaranteed is committed to doing the right thing and meeting the needs of our customers,” the company said in a statement.

“We come from a good place. We always have. Mortgage lending is a complicated and highly regulated business, and government lending guidelines are particularly complex,” the company continued. “In this case, the DOJ helped us identify certain issues that had already been fixed or were immediately fixed once identified. At no time has any audit review highlighted any of these issues before. We never intentionally violate any guidelines, that’s just not who we are.

The DOJ does not disclose the period during which the alleged conduct took place, only stating that the allegations date back to 2008.

But the DOJ said the Guaranteed Rate had taken “significant steps” to end the practices in question, both before and after it was told the government was investigating its lending practices, which the government viewed favorably.

“Lenders participating in taxpayer-supported mortgage programs must follow rules designed to protect both program integrity and homeowners,” said U.S. Attorney Grant Jaquith of the Northern District of New York. “Today’s settlement holds the Guaranteed Rate accountable for its past violations and shows that it has strengthened its internal controls to ensure future compliance with Federal Housing Administration and Department of Veterans Affairs requirements.”

The guaranteed rate, for its part, indicates that the DOJ’s statements on this subject could prove problematic for the industry as a whole.

“At the same time, the DOJ statement strikes us as dangerous,” the company said.

“We have always operated with a customer-focused approach and a commitment to doing the right thing while adhering to all guidelines and regulations,” the company continued. “We believe most of our peers in the industry are doing the same. Scenarios like these have put many lenders away from operating in this space, leaving the rest of us to operate in a position of fear. This translates to fewer options for customers, not more.

According to the DOJ, the allegations were exposed by former Guaranteed Rate employee Anthonitte Carranza under the whistleblower provisions of the False Claims Act, which allow people to sue on behalf of the government for false allegations and receive compensation. part of any recovery.

As such, Carranza will receive $2,443,000 as its share of the government repossession.

“This case involved a pattern of serious, systemic and widespread violations under the False Claims Act,” said Department of Housing and Urban Development Inspector General Rae Oliver Davis. “This repossession on behalf of the FHA and the American taxpayer should serve as a stark reminder of the potential consequences of not following HUD program rules, and the value of whistleblowers, in prosecuting lenders who violate these rules.”

The regulations are one of the first, if not the first, since the government announced Last year that it would relax its use of the False Claims Act to extract massive settlements from lenders.

In closing, Guaranteed Rate said it hopes this issue will prove to be a long-term positive step.

“Our relationship with HUD has always been positive, but we want to build a stronger relationship with their team because we want to be an even better partner,” Guaranteed Rate said.

“We are grateful for the cooperative process we have embarked on together to resolve this issue. We appreciate all that HUD and VA are doing to provide access to affordable housing for so many Americans, especially during difficult times like these,” the company continued.

“We look forward to working with them in the future to continue to drive the industry forward and do what is best for customers. We are proud of our strong relationships with our borrowers, investors and government partners,” the company concluded. “This experience has made us better, preparing us for an even stronger and brighter future.”

[Update: This article is updated with a statement from Guaranteed Rate.]

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Small businesses get a boost with new loan flexibility law https://disasterrecoveryplaybook.org/small-businesses-get-a-boost-with-new-loan-flexibility-law/ Fri, 19 Mar 2021 08:45:02 +0000 https://disasterrecoveryplaybook.org/small-businesses-get-a-boost-with-new-loan-flexibility-law/ LAS CRUCES — New changes to a federal small business loan program meant to help businesses suffering from coronavirus shutdowns have been signed into law, resulting in relief for some local businesses. the Paycheck Protection Program Flexibility Act was signed into law by President Donald Trump on June 5 after congressional lawmakers agreed to several […]]]>

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The surprise drop in Rbi rates, the focus on growth, the moratorium on loans, etc. https://disasterrecoveryplaybook.org/the-surprise-drop-in-rbi-rates-the-focus-on-growth-the-moratorium-on-loans-etc/ Fri, 19 Mar 2021 08:45:02 +0000 https://disasterrecoveryplaybook.org/the-surprise-drop-in-rbi-rates-the-focus-on-growth-the-moratorium-on-loans-etc/ Amid an uncertain inflation outlook and expectations of a growth slump, the RBI’s Monetary Policy Committee (MPC) voted five to one for the 40 basis point cut in benchmark rates, member Chetan Ghate voting for a 25 basis point cut. The reorientation of monetary policy towards growth, caused by the severe economic stagnation, is confirmed […]]]>

Amid an uncertain inflation outlook and expectations of a growth slump, the RBI’s Monetary Policy Committee (MPC) voted five to one for the 40 basis point cut in benchmark rates, member Chetan Ghate voting for a 25 basis point cut.

The reorientation of monetary policy towards growth, caused by the severe economic stagnation, is confirmed by the additional emphasis placed on improving the transmission of the rate cut, by increasing the industry’s access to the working capital, lengthening the repayment curve for borrowers to ease debt service pressures and relaxing asset classification standards. In his statement, Governor Das said: “It was in the growth outlook that the MPC judged the risks to be most severe. The combined impact of demand compression and supply disruption will weigh on economic activity in the first half of the year. »

In another departure from established practice, the central bank refrained from providing guidance on gross domestic product (GDP) growth for fiscal year 2021, or the likely path of inflation. In fact, Das said, “Given all of this uncertainty, GDP growth in 2020-21 is likely to remain in negative territory, with some recovery in growth impulses from H2:2020-21.”

In terms of specific measures, RBI has granted working capital borrowers more time to repay accrued interest. The central bank also allowed banks to extend the lending moratorium for another three months until August 31. Apart from that, the RBI has increased the group exposure limit for banks to 30% of the lender’s capital base from 25% previously. The increase in the limit will be applicable until June 30, 2021. This measure will ease the funding pressure for companies that are struggling to access capital markets.

Meanwhile, bankers believe that converting interest on working capital loans for the moratorium period to funded interest term loan (FITL) will give borrowers a break. “The repayment period for this component could have been longer than seven months,” said Padmaja Chunduru, Managing Director and CEO of Indian Bank.

Das noted that the transmission of monetary policy to bank lending rates continued to improve, and the one-year median marginal cost of the funds-based lending rate (MCLR) fell by 90 basis points between February 2019 and May 15, 2020. This comes as credit growth plummets as borrowers avoid new loans during lockdown and instead seek deferred repayment on existing debt.

Markets sent mixed signals in response to the RBI’s rate action. Stock markets frowned on the move, with Sensex closing over 260 points. However, bonds rallied, with benchmark 10-year sovereign bond yields falling 7 basis points to close at 5.96%. The rupiah closed at 75.96 per US dollar, 0.44% lower than its previous close.

Experts said the central bank had room for further cuts. Rahul Bajoria, chief economist for India at Barclays Bank, said he expects further rate cuts of 50 basis points, likely by the end of June or early July. “This keeps our terminal repo rate projection at 3.50%, with risks clearly biased towards even lower rates.”

The governor and MPC painted a gloomy picture of the economy.

According to Das, national economic activity has been severely affected by the ongoing lockdown, aimed at curbing the spread of the coronavirus. The first six industrialized states, which account for around 60% of industrial production, are largely located in red or orange zones. Governor Das noted that demand has been badly hit, pointing out that the biggest hit from covid-19 has been in private consumption, which accounts for around 60% of domestic demand.

“Amid this gloom, agriculture and related activities provided a ray of hope as foodgrains production rose 3.7 percent to a new record high,” Das said.

The monetary policy committee, Das said, believes that headline inflation could remain firm in the first half of FY21, but should decline in the second half, also thanks to favorable base effects. In the third and fourth quarters of the current fiscal year, the MPC expects headline inflation to fall below the 4% target.

“So the MPC’s forward guidance is directional rather than level-wise. Going forward, as more data becomes available, it should be possible to estimate the path of inflation with more certainty,” he said, adding that the outlook for inflation have become complicated by the publication of partial information on the consumer price index (CPI). by the ONS, obscuring a full assessment of the price situation.

The MPC believes that the macroeconomic impact of the pandemic is proving more severe than initially expected and that various sectors of the economy are under acute stress.

Given the ongoing economic constraints and financial strains, Mr. Das said the objectives of the RBI were to improve the liquidity of the financial system, ensure the smooth functioning of financial markets, deepen financial inclusion and preserve financial stability.

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Hunter Biden tried to cash in on behalf of his family with a Chinese company: emails https://disasterrecoveryplaybook.org/hunter-biden-tried-to-cash-in-on-behalf-of-his-family-with-a-chinese-company-emails/ Fri, 19 Mar 2021 08:45:01 +0000 https://disasterrecoveryplaybook.org/hunter-biden-tried-to-cash-in-on-behalf-of-his-family-with-a-chinese-company-emails/ Hunter Biden has pursued lucrative deals involving China’s largest private energy company – including one he says would be “interesting for me and my family”. emails obtained by The Post show. An email sent to Biden on May 13, 2017, with the subject “Expectations,” included details of “remunerations” for six people involved in an unspecified […]]]>

Hunter Biden has pursued lucrative deals involving China’s largest private energy company – including one he says would be “interesting for me and my family”. emails obtained by The Post show.

An email sent to Biden on May 13, 2017, with the subject “Expectations,” included details of “remunerations” for six people involved in an unspecified business venture.

Biden was identified as “chairman/vice-chairman based on agreement with CEFC,” an apparent reference to former Shanghai-based conglomerate CEFC China Energy Co.

His salary was set at “850” and the email also stated that “Hunter has office expectations that he will work out.”

In addition, the email described a “provisional agreement” under which 80% of the “equity”, or stock of the new company, would be divided equally between four people whose initials match the sender and three recipients, with “H” apparently. referring to Biden.

The deal also listed “10 Jim” and “10 held by H for the big guy?”

Neither Jim nor the “big guy” has been further identified.

The author of the email, James Gilliar of international consultancy J2cR, also noted, “I am happy to raise any details with Zang if there is [sic] missing?”

“Zang” is an apparent reference to Zang Jian Jun, the former executive director of CEFC China.

The email is contained in a data mine that the owner of a computer repair shop in Delaware said was recovered from a MacBook Pro laptop that was dropped in April 2019 and never recovered.

The computer was seized by the FBI and a copy of its contents made by the store owner was shared with The Post this week by former mayor Rudy Giuliani.

Photos from Hunter Biden's hard drive.

Photos from Hunter Biden’s hard drive.

Photos from Hunter Biden's hard drive.

Photos from Hunter Biden's hard drive.

Another email – sent by Biden as part of an Aug. 2, 2017 chain – involved a deal he made with late CEFC chairman Ye Jianming for half ownership of a holding company. which was to provide Biden more than $10 million a year.

Ye, who had ties to the Chinese military and intelligence services, has not been seen since his arrest by Chinese authorities in early 2018, and the CEFC went bankrupt earlier this year, according to reports.

Biden wrote that Ye softened the terms of an earlier three-year consultancy contract with CEFC that was to pay him $10 million a year “for presentations only.”

“The president changed that deal after we told me[t] IN MIAMI TOWARDS A MUCH MORE SUSTAINABLE AND LUCRATIVE ARRANGEMENT to create a 50% percent holding company [sic] owned by ME and 50% owned by him,” Biden wrote.

Email about a lucrative deal.

“Advisory fees are part of our revenue stream, but the reason this proposal from the president was so much more attractive to me and my family is that we would also be inn partners. [sic] JV equity and profits [joint venture’s] investments. »

A photo dated August 1, 2017 shows a handwritten organizational chart of the ownership of “Hudson West” split 50/50 between two entities ultimately controlled by Hunter Biden and a person identified as “president.”

This is the organization chart

According to a report on Biden’s overseas business dealings published last month by Sens. Ron Johnson (R-Wis.) and Chuck Grassley (R-Iowa), a company called Hudson West III opened a line of credit in September 2017.

Credit cards issued to the account were used by Hunter, his uncle James Biden and James’ wife, Sara Biden, to purchase over $100,000″ in extravagant items, including plane tickets and several items in Apple Inc. stores, pharmacies, hotels and restaurants,” the report said.

The company has since been dissolved, and Hunter Biden’s law firm, Owasco PC, was one of two owners, according to the report.

Biden’s email was sent to Gongwen Dong, whom The Wall Street Journal in October 2018 linked to Ye-linked companies’ purchase of two luxury Manhattan apartments that cost a total of $83 million .

Dong, who owns a sprawling mansion in Great Neck, LI, has been identified in reports as the chief financial officer of Kam Fei Group, a Hong Kong-based investment firm.

Ye Jianming, former chairman of the Shanghai-based CEFC China Energy conglomerate.

Ye Jianming, former chairman of the Shanghai-based CEFC China Energy conglomerate

Dr. Chi Ping

Dr. Chi Ping


View of a China CEFC Energy Co., Ltd. sign.

View of a China CEFC Energy Co., Ltd. sign.


Documents obtained by The Post also include a “lawyer engagement letter” signed in September 2017 in which one of Ye’s top lieutenants, former Hong Kong government official Chi Ping Patrick Ho, agreed to pay Biden a retainer of $1 million for “counsel for matters relating to U.S. law and advice relating to the hiring and legal analysis of any U.S. law firm or attorney. »

In December 2018, a federal jury in Manhattan convicted Ho in two schemes to pay $3 million in bribes to senior African officials for oil rights in Chad and lucrative business deals in Uganda.

Email about the agreement

Ho served a three-year prison sentence and was deported to Hong Kong in June.

Neither Biden’s attorney, the Joe Biden campaign, nor attorneys for Gilliar, Dong, or Ho returned requests for comment, but Biden’s attorney previously said, “There is no need to comment. the so-called information provided by Rudy Giuliani.

“He pushed widely discredited conspiracy theories about the Biden family, openly relying on actors linked to Russian intelligence. His record of dishonesty in these cases speaks for itself,” added lawyer George Mesires.

Additional reporting by Reuven Fenton

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Asian Development Bank provides $346m loan for power supply project in rural Maharashtra https://disasterrecoveryplaybook.org/asian-development-bank-provides-346m-loan-for-power-supply-project-in-rural-maharashtra/ Fri, 19 Mar 2021 08:45:01 +0000 https://disasterrecoveryplaybook.org/asian-development-bank-provides-346m-loan-for-power-supply-project-in-rural-maharashtra/ The Asian Development Bank (AfDB) and the Government of India on Monday signed a $346 million loan agreement to help provide efficient and reliable power supply to rural agricultural customers in Maharashtra. Signatories of the loan agreement for the Maharashtra Rural High Voltage Distribution System (HVDS) Expansion Program were Sameer Kumar Khare, Additional Secretary (Fund […]]]>
The Asian Development Bank (AfDB) and the Government of India on Monday signed a $346 million loan agreement to help provide efficient and reliable power supply to rural agricultural customers in Maharashtra. Signatories of the loan agreement for the Maharashtra Rural High Voltage Distribution System (HVDS) Expansion Program were Sameer Kumar Khare, Additional Secretary (Fund Bank and ADB), Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India. , and Takeo Konishi, Country Director of the AfDB Resident Mission in India.

The program aims to provide efficient and reliable power to agricultural customers in rural areas of Maharashtra through the adoption of HVDS which will help reduce distribution losses and improve agricultural productivity and farmer incomes, Khare said after the signing of the loan agreement.

“The demand-driven program supports capacity building and awareness on HVDS and will also establish a complaints mechanism for rural consumers,” he added. The program will run until March 2022, when approximately 1.50,000 measured HVDS connections are expected, the AfDB said in a statement. “Efficient metering, billing and usage-based tariffs for customers served by the HVDS network will pave the way for investments in energy efficient pumps, drip irrigation and could support improvements in management grants,” Konishi said.

The AfDB will support awareness raising efforts on the advantages of HVDS over the traditional electricity distribution network as well as on the efficient use of electricity and water. Improved outreach will help expand the HVDS network to cover agricultural customers beyond 2022 and leverage commercial finance. The loan will be provided under the AfDB’s Results-Based Lending (RBL) modality, where disbursements of funds are linked to the achievement of agreed program results rather than upfront expenditures, as is the case. case with traditional investment loans.

“This first AfDB-funded RBL program in the power sector in South Asia will assist in the early construction and installation of metered HVDS through the installation of approximately 46,800 kilometers of extension lines network, construction and modernization of distribution substations,” the statement said.

The program will also build the institutional capacity of Maharashtra State Electricity Distribution Company Limited (MSEDCL) on HVDS. The loan will be accompanied by $1 million in technical assistance from the AfDB to demonstrate energy and water conservation efforts.

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Missing your stimulus money? Some might be heading your way now https://disasterrecoveryplaybook.org/missing-your-stimulus-money-some-might-be-heading-your-way-now/ Fri, 19 Mar 2021 08:45:01 +0000 https://disasterrecoveryplaybook.org/missing-your-stimulus-money-some-might-be-heading-your-way-now/ The growing panic being expressed over pandemic-related stimulus funds doesn’t seem to take into account that all the money was never settled to be disbursed at once. So just because your neighbor saw a direct deposit stimulus payment last week doesn’t mean you won’t see money soon. More than half of people eligible to receive […]]]>

The growing panic being expressed over pandemic-related stimulus funds doesn’t seem to take into account that all the money was never settled to be disbursed at once.

So just because your neighbor saw a direct deposit stimulus payment last week doesn’t mean you won’t see money soon.

More than half of people eligible to receive recovery rebates or stimulus checks have yet to receive stimulus money and many will start seeing their money this week or later.

Some seniors who receive Social Security retirement benefits through direct deposit should see that money associated with economic impact payments hit their accounts this week, possibly next.

This group includes people who receive Social Security benefits but may not earn enough money to be required to file a federal tax return. Many will not need to complete any additional forms to receive this money.

Also starting this week, the Internal Revenue Service will begin issuing paper checks on a weekly basis to people who have not provided direct deposit information but have a mailing address on file with the IRS. according to an April 16 report by the House Committee on Ways. & Means.

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These things can give you success in borrowing business loans https://disasterrecoveryplaybook.org/these-things-can-give-you-success-in-borrowing-business-loans/ Fri, 19 Mar 2021 08:45:01 +0000 https://disasterrecoveryplaybook.org/these-things-can-give-you-success-in-borrowing-business-loans/ Opinions expressed by Entrepreneur the contributors are theirs. You are reading Entrepreneur India, an international franchise of Entrepreneur Media. From machinery to manpower, running a business involves constant funding. Business loans are one of the mainstays of these funds. But the process and ability to get a business loan stems from a keen sense of […]]]>

Opinions expressed by Entrepreneur the contributors are theirs.

You are reading Entrepreneur India, an international franchise of Entrepreneur Media.

From machinery to manpower, running a business involves constant funding. Business loans are one of the mainstays of these funds. But the process and ability to get a business loan stems from a keen sense of finance. A highly effective business loan borrower is not only creditworthy, but also thoroughly understands the credit requirements of the business. Here are five habits that we believe are most common among savvy and successful small business borrowers:


graphicstock

Determine business credit needs

From cash credit to term loan, each loan product comes with different interest rates, disbursement structure, repayment schedules and collateral requirements. Due diligence in understanding one’s business credit needs and the amount of potential benefit from credit is essential to engaging with a lender profitably. Effective borrowers are also aware of key factors such as pre-existing business debt, business credit rating, and business revenue trends that play an important role in the loan approval process.

Maintain a solid credit history

Effective borrowers exercise the utmost discipline in loan repayment. Credit is the lifeblood of any business and offers great financial flexibility to the businessman for growth. The actual borrower will always use the line of credit and strictly follow the repayment schedule not only to generate higher returns but also to create a strong financial balance i.e. credit history. Having a good credit history in business as well as in personal life allows for better deals in future lending endeavors.

Be aware of the fine print

Business loans are complex products with a comprehensive set of terms and conditions that only become relevant after a while. These conditions must be adapted to the current and future needs of the company. From ease of prepayment to foreclosure fees, being acutely aware of how your line of credit aligns with your business goals is a recipe for success. Having a finance manager with good financial know-how will make the process easier, but in the absence of a finance officer, consulting loan officers or even using dedicated online apps will help borrowers be better informed. .​​​​​​​

Get offers from multiple lenders

Simply put, “Shop”. Contacting multiple lenders to take advantage of multiple business loan offers can be a tedious process, but an effective business loan borrower knows that in the world of credit, there is no one size fits all. Each lender will have a different perspective and lending policy towards different businesses and segments, so it’s best to generate multiple offers and pick the best one. Since there is no shortage of loan sellers available in the market, several offers also provide the opportunity for a borrower to compare rates and use research as leverage to negotiate great deals.

Hire a professional loan officer

An effective commercial borrower understands that engaging and dealing with multiple potential lenders can consume a lot of time and resources. Therefore, the most effective ones hire a subject matter expert to help them benefit from several offers tailored to the needs of their business. These specialists can range from professional loan counselors to a chartered accountant or financial advisor. Seeking professional help to increase the rationale for business borrowing decisions yields the best results.

In conclusion, effective commercial borrowers succeed by finding the right overlap between business needs, lending products and subsequent compliance. They are shrewd and work closely with professional intermediaries to get the best deal, conduct thorough market research, sift through the fine print with a keen eye, and have all the necessary paperwork. Effective borrowers also follow rigorous discipline in maintaining and updating their business accounts. Once the loan is obtained, they make sure to repay their loans on time so that the doors of any lender are open once they have future credit needs.

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The small business loan relief program is already running out of money https://disasterrecoveryplaybook.org/the-small-business-loan-relief-program-is-already-running-out-of-money/ Fri, 19 Mar 2021 08:45:00 +0000 https://disasterrecoveryplaybook.org/the-small-business-loan-relief-program-is-already-running-out-of-money/ the COVID-19 crisis has been particularly difficult for small businesses. Many have already been forced to close their doors or lay off staff, while countless others risk the same fate. As part of the $2 trillion economic stimulus package that was introduced in late March to provide relief, around $350 billion has been made available […]]]>

the COVID-19 crisis has been particularly difficult for small businesses. Many have already been forced to close their doors or lay off staff, while countless others risk the same fate.

As part of the $2 trillion economic stimulus package that was introduced in late March to provide relief, around $350 billion has been made available to small business owners in the form of repayable loans through the Paycheck Protection Program. Specifically, business owners could apply through local banks and receive up to two and a half months of salary costs. Those who then use 75% or more of that money for payroll purposes can qualify for full loan forgiveness.

IMAGE SOURCE: GETTY IMAGES.

But as of Thursday, April 16, the Paycheck Protection Program was officially out of money. And that leaves small business owners across the country in a very desperate position.

The road to relief hasn’t been easy

On the one hand, forgivable business loans read like a lifeline at a time when so many businesses are struggling. But the application process for these loans has been far from smooth.

When these loans first opened up about two weeks ago, many banks’ online application systems couldn’t handle the influx of customers looking for a slice of that pie. As such, small business owners left and right were unable to apply due to technical difficulties. After this issue was resolved, many lacked the specific information needed to complete their applications.

The Paycheck Protection Program, on the other hand, was designed to operate on a first-come, first-served basis. Businesses that have encountered difficulties in the application process may therefore have lost an opportunity to secure the financing they need to stay afloat.

Of course, many companies To do get up to get relief. A healthy 1,661,397 loans have already been processed before the Paycheck Protection Program ran out of money. But that doesn’t help business owners who failed to apply. Moreover, those who did apply but have not heard from their banks are effectively in limbo at the moment, unsure whether or not they will be eligible for financial assistance.

Is more money coming?

Clearly the Paycheck Protection Program needs additional funding, or the introduction of a different but comparable program is crucial to averting a scenario of mass small business shutdowns across the country. As lawmakers wrangle over specifics, many small business owners are scrambling and hoping for relief, while others are resigning themselves to the possibility of having to close their doors — perhaps forever.

Businesses that have failed to apply for a loan in recent weeks should prepare to act quickly if (and hopefully when) a new funding round is introduced. Unfortunately for some, the process will favor those who already have existing relationships with the banks that are accelerating these loans, but coming prepared with payroll costs and other financial information will give all business owners a fighting chance.

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