every corner we turn lately it seems to make more bad economic news. However, it has a positive aspect. More and more, our Congress, President Barack Obama, and the everyday American citizen is putting its opinion squarely on the cap and come up with new ideas. New concepts of sparks in both quality and extent. So, here is an idea that is so obvious that one wonders why it is not located on the front of the parade: Why do not we do more government-backed SBA loans available
In 1953, the SPP is simple and brilliant idea. Loans are not flowing so easy for small businesses, because the conservative nature of banks, instead of the usual honor commitments to large organizations. So the SBA guarantee program set up, whereby the borrower will pay a small fee upon completion and to be used, such as insurance, to pay the bank if it was given. It is easy to discern their motives. It was more incentive for banks to loans that are considered risky or less conventional. And it worked very well for decades.
response to this might be: ".. So what, SPP, but such programs, and they have done this year, even during bad economic times has not really helped," Not so fast. Why do not we take this simple and successful model and to expand? Why do not we should have more loan programs, with more creative terms, and expensive marketing? Let's create a new program specifically designed for our current economic times?
talk to any small business lately and it's just a matter of time when they talked about their high credit card that carries a cash flow. In simple terms of monetary, credit lines and loans are available. But business is to survive and even expand. For those who have good credit are staring in the face of the availability of one thousand U.S. dollars of credit available on their credit cards. They had no choice but to charge and spike your card balance. It worked very well as long as interest rates remained at manageable. But then things changed quickly when the available credit was frozen, and interest rates were raised unilaterally without prior notice. Here is an actual example.
Mr. Jones was laid off from the environmental consulting firm and started his own company. At first he worked from his home and had a low budget. He has provided consulting services to medium-sized businesses, especially measures to save on electricity. But he was almost too good, and demand began to increase. He was offered a larger and larger contracts that it needs to expand and hire more independent contractors. He always pays his bills on time and had good credit, credit card companies all too happy to offer him a platinum card with a limit of $ 50,000. Before we knew it was equipped with a new office with computers, equipment, signage, advertising - you name it and it was placed on his karticu.Kamatna rate is 7.99%, and he was able to to handle the payments when he reached the state of $ 35,000.
But one day received a notice in the mail that changed everything. No change in his credit score and payment history, card company immediately raised interest rates to 26%, with amorphous statement that the "current economic conditions." You guessed it. His payment went through the roof. He continued to pay on time, but in the hole, because most of the principal and interest will not be on track.
Why do not we come up with the SBA small business loan program as follows:
• small business loans of $ 5,000 to $ 50,000 that will be used solely for the purpose of paying down debt on a credit card to use for business purposes. These SBA loans will be guaranteed for 90% to give an incentive for banks to make loans.
• As with other SBA loans, to be with people who have good credit and are not substantially defaulted on their credit card payments.
• Evidence will be, under penalty of perjury, that the loan used to pay off business debts only, not personal. It would be up to lenders to come up with a reasonable verification procedure. For goodness sakes, all you have to do is go to the file cabinet and pull out your monthly statements. Using a highlighter, you can easily calculate how much your account was related to the job. For the more adventurous, it can even put on a spreadsheet. The thing is, it could easily be confirmed.
• The program will be completely optional to the credit card company.
• If the credit card company agreement, any part of a balanced could be paid at the rate of, for example, 80%. Since a lot of balance can be attributed to high interest rates, this will give some relief on the cards. Another opcija.Kamata will be rolled back to interest rates when the card is first issued, plus the cost of living porastu.Kartice will be able to retiring principal and interest on the lower rate in one large plaćanja.Kartica companies will have the right to charge for their current or most interest for future purchases. In the meantime, the card company would not have the right to cancel or reduce any existing credit limit then in existence.
Why would credit card companies did not welcome this? Did you read the data lately? Polls show 37% of banks have increased their rates of credit card, compared with 24% in April, and 10% in January. Advanta experienced 83% decrease in earnings in the second quarter, due to the massive charge-offs. Capital One's profit fell by 40% and American Express is hit with a 38% reduction. Bank of America lost 2.7 billion of credit card loss, 31% more than last godine.Izbor more suffer from the losses and see your cash flow to disappear, because people are barely able to pay the interest or pay down the principal.
In the meantime, there is something that can be used to pay down your credit card debt. There is a loan program out there and SBA lenders are actually making the loans currently:. Community Express loan program This provides unsecured small business loans between $ 5,000 and $ 50,000 with very little paperwork, answers usually within two days, the interest rate currently at 7.75%, financing, and two weeks, and the amount wired directly into your business account. There are still lenders who participate in this program, even though Congress has failed to make the program permanent and still has a 10% cap on the number of credits. So why do not we expand that one?
This is the time to act decisively and kreativno.Stare ways of doing business must be removed for new ones. As a spin-off result, it will bring more than 27 million small businesses in this country who deserve a break.