What Auto Financing Bad Credit Companies Can Do For Clients

In the game of vehicle financing, auto financing bad credit issues sometimes gets in the way. It is fortunate, though, that there are more than a few companies out there willing to take the risk of helping you with your auto financing bad credit concerns. There are companies out there with willing and trained specialists to help you find the right financing plan for you to get that car you’ve always wanted, regardless of how undesirable your credit status at the moment might be. With that in mind, let us take a look at some of the options or services that they offer for their potential clients.

Generally, services like auto financing bad credit provide more options than their usual auto financing counterparts. Companies with these services tend to be more flexible with regard to their policies in evaluating who to provide auto loans, too. These companies offer more favorable terms to applicants in an effort to get the highest possible chance of approval. It isn’t hard to negotiate reasonable credit terms with these companies and many will agree to let you pay off your credit over an amount of time that most banks would find laughable, at best. They are also capable of negotiating better interest rates with the dealerships, if that would be your preferred option.

Some also offer advice on what type of car to get, in case the prospective client doesn’t know what exactly to buy yet. Through sites, these companies help you determine how much should be the downpayment for the car, whether or not a particular model is worth the price combined with the long-term interest, and other little things to help you in making your decision. It is true that most people who would even consider getting auto financing bad credit services already know what type of car they need. Still, it does not hurt to have someone else’s opinion on the matter. Preferably, that someone is well-versed with regards to cars and can better analyze your financing options than you can. While it isn’t really all that much, there are people out there who find this sort of trivial touch very comforting and take it as a sign of good service.

Before you consult one of these auto financing bad credit groups, however, it is best to check your credit history. Credit history is very important in auto financing bad credit history. The truth is that if you’ve never had any period of time that they can consider good credit history, chances are that they will be rather hesitant of approving any deal for your car. It would be wise to check your credit report and make sure that your bad credit isn’t over an extended period of time. Get to know the details if your financial history since, regardless if you go through a dealership or take some sort of auto financing plan, they will check your history. Auto financing, bad history or not, is always a risky business and many businesses out there would rather not take too many risks, even if it could turn into a big profit for them.

Commercial Finance – Hard Money

The Merriam – Webster Online Dictionary defines hard as:

1 a: not easily penetrated: not easily yielding to pressure b of cheese: not capable of being spread: very firm.

2 a: of liquor (1): having a harsh or acid taste (2): strongly alcoholic b: characterized by the presence of salts (as of calcium or magnesium) that prevents lathering with soap i.e.hard water.

3 a: of or relating to radiation of relatively high penetrating power: having high energy hard X rays b: having or producing relatively great photographic contrast i.e.a hard negative.

4 a: metallic as distinct from paper hard money b: of currency: convertible into gold: stable in value c: usable as currency i.e.paid in hard cash. d: of currency: readily acceptable in international trade e: being high and firm i.e. hard prices.

5 a: firmly and closely twisted i.e. hard yarns. b: having a smooth close napless finish i.e. a hard worsted.

6 a: physically fit i.e. in good hard condition. b: resistant to stress or disease c: free of weakness or defects.

7 a (1): firm definite i.e.reached a hard agreement. (2): not speculative or conjectural: factual hard evidence (3): important or informative rather than sensational or entertaining i.e. hard news. b: close searching i.e. gave a hard look. c: free from sentimentality or illusion: realistic i.e. good hard sense. d: lacking in responsiveness: obdurate unfeeling i.e. a hard heart.

8 a (1): difficult to bear or endure i.e.hard luck or hard times. (2): oppressive inequitable i.e.sales taxes are hard on the poor.

9 a: characterized by sharp or harsh outline, rigid execution, and stiff drawing b: sharply defined: stark i.e. hard shadows.

10 a (1): difficult to accomplish or resolve: troublesome i.e. hard problems.

As used in this article, hard money is intended to convey the idea that because of the current economic conditions, many financing needs will be more difficult to accomplish. They will require great exertion and effort to overcome the economic obstacles of the current economy. Compared to 2006 and 2007, periods of relatively easy money, to obtain financing today you will have to have firm, definite facts to support your financing needs. And the cost of money will be more difficult to bear. Hard money is harder to find, harder to obtain and harder to repay. Nevertheless, hard money may be an economic necessity as a means to an end to grow a business or complete a real estate transaction.

Why is 2008 a time of hard money? This is a difficult question to answer. If you ask 3 experts you probably will get three different answers. It may be the economic equivalent of The Perfect Storm- a True Story of Men against the Sea. The phrase “perfect storm” refers to the simultaneous occurrence of events which, taken individually, probably would be far less powerful than the result of their rare combination. These occurrences are rare by their very nature, so that even a slight change in any one event contributing to the perfect storm would lessen its overall impact. The stock market crash of 1929 and following depression exemplifies a perfect storm of economic consequence.

What are these events today? 1) The Mortgage Melt-down. Major financial institutions in the United States are incurring billions of dollars in losses due to the loss in valuation of their investments in mortgage securities. The consequence for borrowers is that these institutions are less inclined to take risks when loaning money for fear of additional losses. And their regulators are demanding that regulated lenders raise their credit standards for borrowers to qualify for a loan. 2) The devaluation of the American dollar versus other world currencies. The U.S. government is spending ginormous amounts of money in excess of what it collect in revenue due to the political compulsion to spend taxpayers’ money, the war in Iraq, Hurricane Katrina (and other natural disasters) and the war on terrorism. This makes our currency less valuable. It makes importing to the U.S. more expensive. The American people have less money to spend on goods and services, and their money buys less than it did a year ago because prices of necessities such as gasoline are higher. 3) The current tendency of Federal and State governments to reduce funding for social services, health services and education because of inadequate revenues; this hurts individuals and businesses who have less money to spend on products and services which creates additional drags on our economy. 4) The diminishing value of residential real estate all across the United States. This is related to the mortgage meltdown and the fact that many people incurred debts that they cannot repay. The real causes of these events are complicated and beyond the scope of this article. Suffice it to say that these are hard times and hard times create needs for hard money loans.

What exactly is hard money? Here are seven examples:

1) A commercial real estate loan where the borrower receives funds based on the value of the property, usually 50% or less, at an interest rate higher than a bank would charge. This is the most commonly understood type of hard money. In this financing, neither the income from the property or the borrower demonstrably supports the repayment of the loan.

2) A real estate loan to buy a residential property where the borrower cannot prove their income. This may be accomplished with financing from a seller, the only party willing to take the risk of non-payment.

3) A small junior lien on income producing commercial real estate where the first lien is very large. For example, a million dollar second lien behind a ten million dollar first lien. Most lenders simply do not want to consider a loan of this type because of the potential liability for repayment of the first lien. It is ten times the risk of the secondary loan.

4) Most loans to people with less than excellent credit. Many loans are based on credit scoring. If you do not have a credit score that is high enough for the lender’s requirement, you simply do not get their loan and you may or may not be able to find a hard money loan to accomplish your objective.

5) Accounts receivable financing to construction contractors, medical providers and sellers of agricultural products. Most factors do not offer to these sectors of the economy because of the risks and complexities that are involved.

6) Purchase order financing for items with gross margins less than twenty percent. The twenty percent margin is a benchmark for sufficient profitability in a transaction to pay all financing costs and create profits for the business after all costs are paid. During hard economic times margins are squeezed. It is a vicious cycle.

7) Loans to businesses that are particularly negatively affected by the current economy. For instance, a loan to build a new lumberyard is impacted by the downturn in new real estate construction and a lower need for lumber. Most banks would simply decline to consider such a loan. The same is true for developers seeking to build new housing tracts or office building developments. This is not a good time to try to start a new mortgage brokerage company; although it may be a good time to be a hard money lender provided that you are very, very careful in assessing your transactional risks.

What do all of these situations have in common? In times of easy money these situations would be less costly to finance and more likely to receive funding. Today, the lender’s answer to your request for funding is more likely to be a polite but strong “no way”. Many lenders have effectively (if not actually) shut their doors. Many lenders will simply decline to lend on hotels/motels, gas stations, owner/user properties, properties with any environmental issues. Borrowers who do not have FICO credit scores above 680, with substantial net worth and income will find it is very difficult to obtain many types of loans. Fortunately, the door for accounts receivable financing is still wide open.

The bottom line: Hard times in our economy will tend to force more individuals and businesses to borrow hard money- if they are able to get any money at all. Commercial financing with hard money will tend to grow as traditional sources of financing from banks and institutional lenders simply will not be available.

Debt Consolidation Finance – Licensing of Debt Driving out

Financing, as debt consolidation finance is the simplest and most uncomplicated way of dealing with various debts. The idea is that one takes out another loan which is large enough to pay off all your debts such as credit cards, personal loans, business loans, medical loans, overdrafts and other loans. Debt consolidation finance leaves individuals with one single monthly repayment to make, which is already a great step forward in making ones finances easier to control.

Surely that the financing takes out at a comparatively low interest rate, one should find that ones total monthly repayment is lower than it was when one was servicing many smaller loans, with more expensive debts. Also, choosing a longer term to repay ones financing will lower the costs even more.

The debt consolidation finance works as mediator between various lenders and a borrower. For, there are scores of lenders available online and offline for this debt consolidation finance, with their respective policies and plans, these lenders provide two modes of availing this debt management financing plan. In one of these plans, collateral pledging is an essential part of the mode, whereas another plan requires nothing as of borrowers’ security.

More so, those individuals who are hit by the adversity of bad credit history too, can avail the facility of debt consolidation finance. Lenders keep no financial distinction on providing this debt management financing program. Such individuals only may have to pass by some tardy official works, due to their unwilling adverse credit history. No matter, owing to stiff competition amongst lenders in the money market, borrowers get many other chances of getting these loans instantly with quick approval.

Advisably, before signing up with a finance company for debt consolidation finance, individuals will take over the servicing of their debts in return for fee. Instead of having to keep up with all ones repayments to many creditors, one can now make a single payment to the management or financing company who will divide it between. This in itself can be a great weight off your mind, as the stress of keeping track of your repayments in removed, but debt consolidation finance can offer more than this. And, it can work as licence for driving out debt devils.


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