Phantom Commercial Loans

The description of phantom commercial loans was inspired by earlier terminology related to phantom software or similar phrases which generally referred to high tech companies announcing that they were planning to issue new products at some vague point in the future. The usual motivation was to discourage consumers from buying a competitive product because the manufacturer would usually suggest that their yet to be released product would surpass an existing item in one or more ways. Because such a large percentage of these announcements were often not followed by the actual sale of software, the product which was announced with such fanfare but never ultimately made available for sale became known in many circles as phantom software because the intended use of the definition suggests something that only appears to be real.

Sadly a similar event is now occurring more frequently with respect to business financing and working capital finance. Lenders which either do not have sufficient funds for routine lending purposes or which do not really have a serious interest in actively providing commercial loans are nevertheless making announcements about the availability of their financial services for small businesses.

While it is hoped that this trend will not continue, it is simply too early to provide a confident prediction as to how this will unfold over the next year or so. Because borrowers should always have the most accurate information for any potential loan transactions, it is suggested that they take some extra precautions to ensure that any banking representations are fully examined and confirmed for accuracy before proceeding in attempts to secure working capital.

Stephen Bush is Chief Executive Officer of AEX Commercial Financing Group and is a small business consultant and commercial loans expert. Steve provides business cash advance and other working capital financing strategies for merchants throughout the United States. Please contact Steve for candid and practical advice about merchant cash advances and commercial real estate financing.

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Hard Money Commercial Loans Revealed!

Where did hard money come from?

Hard Money Loans in general have traditionally been only for investors seeking to purchase real estate quickly and with little documentation. Investors by nature are much more educated about their financial situations and options since they are utilizing their sources and going through the lending process much more frequently than the average home owner.

Investors did not want to have to go through a 30-45 loan process every time they purchased a new investment property. Often times their investment projects were time sensitive and needed to be quickly financed or they would lose the deal. Enter Hard Money.

Historically hard money was meant to lend money to anyone based only on the equity position of the property. These new forms of commercial and residential loans were both lent based on the assumption that the lender would only provide 60-65% of the value of a property. They would not be securing their money against the credit worthiness of the borrower, just the equity of the property. This meant no more lengthy credit underwriting bank reviews. Interest rates are much higher with a hard money loan than with traditional financing, but investors are more than willing to pay the higher interest rates and points associated with acquiring these loans in exchange for not being declined due to credit, job, or income issues.

Commercial Hard Money Loans Evolve

Hard Money Loans filled a huge gap in the lending and banking industry. Investors were now able to obtain short term financing very quickly to purchase their properties.

These loans also became very popular with residential lending over time. The average home owner through mortgage brokers gained easy access to these loans which was advantagous to them for several reasons as well. A loan of this type became an option for a home owner who was falling behind in their mortgage payments. Traditional banks and lenders wanted nothing to do with someone that was not able to make their monthly mortgage payments. Often times these people only needed a short term reprieve to overcome some challenge they had been faced with in their lives.

This new loan allowed the home owner to refinance and catch up on mortgage payments. Their payments inevitably rose even higher due to the higher rates, but the loan also allowed the home owner to cash out up to 65-70% of the value of their home! This gave the home owner the power to pay off other debts, catch up on their mortgage history and then refinance again once they were in a better position to more traditional loan options.

Whats in it for the lender?

The lender has several incentives for their risks. The most obvious is the interest the investor makes on his money. It is not uncommon for a hard money lender to command anywhere from 10.99% all they way up to 18% interest on their loans depending on the risk and property types.

The second incentive is the points that a lender collects for offering you their money. The lender often collects anywhere from 1-8% of the total loan amount as their fee for offering you such high risk money. In addition to these upfront fee’s and the high interest rates, the lender may also impose a prepayment penalty ensuring that they get their interest payments over a 6-12 month period. Should the client refinance or sell the lender is able to collect even more fee’s for using their money.

The final benefit is the property itself. Often times the lender does research on the property and determines their risk by their ability to make money should they take back the property from the client. If the client falls behind in their payments the lender would be able to take ownership for example of the mulitfamily apartment complex and make money on the net operating income the property would offer. If the return is not high enough for them they are also able to sell at a discount. Remember they are only lending 65% of the value of the property so if they take it back they can always sell quickly at a discount in order to make quick money on the capital gains of the sale.

Hard money commercial loans today

Hard Money has truly evolved. With the fallout of the credit markets in 2007 this market has a new face. In both residential and commercial markets, hard money seems to have replaced a void left by the subprime market. Subprime is a whole other article but let us just agree that subprime was not only for bad credit buyers and therefore now that hard money is takign that market space neither is hard money.

These loans now can accommodate a wide variety of loan scenarios. It is no longer just for the foreclosure bailout crowd or bad credit investors. The product can cover anything outside the normal local banking guidelines. Private lenders are now allow CLTV’s up to 90%! A commercial investor may only need to bring 10% of the purchase price and can still obtain a hard money loan. This means not showing tax returns, not waiting for lengthy underwriting processes, and getting their money fast.

A commercial Lender today will often do their own due dilligence and appraisals. They are streamlined and have formula in place to quickly tell them if they will be likely to see a return on their investment.

This product is becoming ever more popular in the mortgage industry. Non Standard sources flock to hard money lenders to help them invest their money including pension funds, insurance funds, etc.

As mortgage brokers further infiltrate the commercial market we are sure to see an explosion of hard money commercial loans becoming available to more commercial investors whos only access to commercial money in the past may have been their local bank.

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Pop Cultures Effect on US Corportations

Pop culture has a huge effect on US corporations and corporations worldwide. We live in a world today where most individuals are more worried about what other people are doing rather than what is in our best interest. This empowers the entertainment industry of the U.S to have a big impact worldwide. Pop culture can almost be considered as Americanization because of the impact on it has on the world. Most known figureheads of Pop culture are from the United States.

Pop culture around the world is categorized as movies, music, television shows, newspapers, satellite broadcasts, and clothing, among other entertainment and consumer goods. Pop culture is a very vague term used in the world today. With the number of different categories it is very hard to control the pop culture market. There are many different cultures in the world so what is appealing in the United States might not be as appealing to someone that lives halfway across the world in a different country. For instance, a hit record on the radio spoken in English will not be as popular in a country where the population does not speak that language.

The music industry has a huge impact on Global Business. Many of the most popular artists around the world are from the U.S. If you look on the charts that are stated worldwide, most of the time the song at the top is from an artist from the United States. Even though the U.S is the leader in this category they do not completely control the music industry. The products of popular musicians are also likely to be distributed by non-U.S. companies such as Japan’s Sony, Germany’s Bertelsmann AG, France’s Vivendi, or the United Kingdom’s EMI Group. Artists use this equipment because they want the best quality. This does not mean the United States is not a creator of musical equipment that people use but, they are known as the other brands that are not as popular.

Another important branch of Pop culture is the sports industry, The United States is known for having the best leagues for most sports, considering that athletes from other countries come over to the United States to play because the competition is more fierce. They also will get paid much more than they would if they stayed and played over seas. This is an eye opener for a brand like Nike because they will sponsor the athlete because they know they can make money off of that individual. Nike understands that some individuals will go out and buy the apparel that the pro’s wears during games. Nike is the biggest sports apparel company to date. Nike is number 2 on Forbes list for clothing companies and number 1 for sports apparel. This is good for the United States Economy because it’s the leading company in sports apparel around the world. When watching the Olympics a majority of the athletes from all over the world wear Nike apparel. This shows that Nike has a huge impact not only in the country but around the world.

The entertainment industry is another important aspect of economic activity in Pop culture. The United States entertainment industry generates more revenue from overseas sales than any other industry. This is because the quality of our movies are better and we also can accommodate to specific languages, A movie can have a few version released so people who speak a different language will still buy the movie and be able to enjoy it. Recently, more movies are making foreign actors the lead role so it appeals to foreign countries.

In conclusion, Pop culture has the Americanization effect. Most industries that fall under the term pop culture are controlled by the United States. From this the country leads revenues in this category. With help of local celebrities that are natural born Americans people worldwide will buy whatever that celebrity is wearing. This helps the local brands in the United States. Pop culture will help the U.S corporations with revenue as long as the world is turning for the industry is too big and can not fail.

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International Business Setup – The New Talk of the Town

For ages people have wondered about owning a business in a country of their interest. This decision is backed by a lot of questions, like:

Which country to open a business in?

Which industry to choose?

What are the implications of setting up a business in these countries?

Is this the right thing to do?

what options do I have?

How soon can I open this?

Is it going to be profitable?

There are a lot of other questions which pop up in your head and you don’t have answers to them. The best way is to hire an agent or speak with a friend who knows. speaking with a friend will probably give you an insight and your friend might help you a bit with the process, but then again you need to consultant a professional to do the right thing. To follow the right procedure for opening your company/franchise etc.

The next question which comes out is how much will these agents charge you?

Is it going to be a fair price or are you going to get robbed?

Again you sit in a corner in a dilemma scratching your head thinking if this is going to over shoot your budget because these agents will grab all the opportunities to extract the that extra amount from your pocket.

This is the time when you need a real agent.

Ask these questions to your agent.

Why are you charging ‘X’ amount?

What all services are included in this?

What happens if the work is not done on time?

Will there be a compensation if there is a mistake that occurs on their part?

Do you need to run behind them or do they need to run behind you?

Well all these questions are simple but the last one though; differentiates them. An agent who makes you run behind them is not worth hanging on to. An agent who runs after you is a good bargain and this is where you will learn the customer service which is associated with the company or agents you will deal with.

Most of the times I have seen a lot of agents who will run around in the start just to grab your attention and they will also criticize the other agents saying; ” those agents do not know how to get the work done properly.” You like an innocent child believe this and follow them blindly and in-turn have the worst experience of your life.


You want to suffer or be victorious in your endeavor. The choice is yours. Try to meet them, allow them to give you all their details in writing. Try to get them make a contract with you for the services being offered by them. Throw in some of your points in the deal. Discuss the price before you start with them. Do not pay them more than the contract amount. Also do not pay them less than the contract amount. At the end of the day these small things will make your experience worth your time and money.

I have come across many customers in work who complained about their agents not providing them with the full or correct information.

My business is to help people with setting up their businesses in UAE with ease and within the shortest possible time.

You might ask me for help if you want information on the cost of setting up a business or about various visa services or how you can get your documents attested at the best rate in the market.

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