Self-Directed IRA

Become Your Own Bank

The Self-Directed IRA (SDIRA) puts you in control of your qualified accounts such as IRA’s, 401(k)’s,  403(b)’s, Keogh’s, SEP’s and more. With a SDIRA you have the flexibility to invest in real estate, mortgages, businesses, franchises, tax liens etc.  This gives you, not Wall Street, discretionary control of investment options, whether traditional or non-traditional. A Self-Directed IRA is a retirement plan that allows the account owner to direct investment decisions on behalf of the retirement plan. Basically, an SDIRA is a unique hybrid tool that utilizes a self-directed IRA custodian and a specialized legal structure. With an SDIRA you will have a checkbook, a debit card and all the tools that come along with a business checking account.

The SDIRA owner can use his retirement funds for a multitude of investments providing a higher potential rate of return. All you need to know are the few things you cannot do and the rest is up to your imagination.

Asset-Based Lending

A New Revitalization of an Old Lending Practice

In the simplest meaning, asset-based lending is any kind of lending secured by an asset. This means if the loan is not repaid, the asset is taken. A home mortgage is an example of an asset-backed loan. More commonly however, the phrase is used to describe lending to business and large corporations using assets not normally used in other loans. Typically, these loans are tied to inventory, accounts receivable, machinery and equipment, but they can also include exotic things like the value of pharmacy script files, a trademark, or whole assets of intellectual property. For example, Midway Games took out a line of credit secured by its Mortal Kombat game. If it fails to repay, the bank then owns the  franchise and can sell the rights to it.

Payday Loan Consolidation

Guest Blogger Angela Sanders

Earlier this month we posted an article about Payday Loans, and the possible pitfalls connected to this institution. This post was evidently compelling enough for a reader to ask to be a guest writer and post her own story. The following is from Angela Sanders, who writes a Blog of her own called A Financial Journal. We are always excited in bringing you the very best in information and calls to action on this blog. Here is Miss Angela…

Is it possible to consolidate your debts?

“The consumers take out payday loan to manage their emergency expenses at the middle of the month. When you apply for payday loan you are not required credit check so the interest on this loan is comparatively higher than other loan programs. Make sure that you pay off the owed amount on scheduled date to avoid the accruing interest on the principal balance.”

Your Children and Credit

Educate Your Children about Money and Credit

Parents, start building your children’s credit early – and do it well. Build credit early for your children – even before college starts, if they plan to take out student loans. Sign over an account that they must pay on time each month. Get a credit card with a low limit, and a bank account that you help them manage monthly. Avoid opening several charge cards at once in their name – not only will they be hard to repay, but having new accounts when they have a short credit history will cause their credit rating to drop. Encourage them to get a part-time job.

“The Credit Card Act of 2009 sought to temper aggressive marketing of credit cards to students by restricting campus promotions and requiring students younger than 21 to have a co-signer, unless they have enough income to get their own card.” And banks are unwilling to offer credit education to their customers. “They do not tell us that no credit is as bad as poor credit. Banks and educational institutions certainly do not think it is their responsibility to conquer the critical task of teaching children about credit.”

Pay Day Loans

Avoid Payday Loan Scams

As the Thanksgiving and Christmas Season looms just over the horizon, having available money for holiday shopping swings into the forefront of our thoughts. As enticing as it may be, you should avoid payday loans except as an absolute last resort. Payday loans are also called “cash advance loans” and they are small, short-term loans that carry very high interest rates. Some companies have even begun to advertise them as “loans to help you repair your credit”, but this is very misleading. Some companies suggest that these loans can help you pay off your bills and so establish good credit, but if you cannot afford to pay your payday loans back on time, you have to “roll-over” or extend the loan – often at huge expense and interest. Many people get into a “payday loan cycle”, whereby much of their monthly paycheck goes towards paying off their ever-growing payday loans.

Learn About Money

Make learning about money a priority

There’s a lot to learn about money, and there’s plenty of free information available. The Federal Reserve education web site,  offers personal financial education information and links to many useful resources.

Look for organizations in your community that can help you learn more about setting financial goals, budgeting, saving, using credit wisely and getting the best deal. Whether you attend information sessions at different venues, read about money in books, magazines, newspapers, or online, learning how to manage your money is an important part of life.

Here are some other possibilities:

  • Nonprofit credit counseling service.
  • Library.
  • Community college.
  • Bank or credit union.
  • Nonprofit community development corporation.
  • Nonprofit housing organization.
  • Religious organization.
  • Senior citizen center.
  • Employee assistance program.
  • Cooperative extension service.

Understanding Your Credit Score Part One

Payment History

The three major Credit Bureaus: Equifax, Experian, and TransUnion, all work off of a similar scoring system. This system is based on a singular postulation: will you become 90 days late in the next 2 years? The scoring system they all use, (with minute variables) can be broken down into 5 categories; or 5 pieces of a pie. I will discuss the first part of that credit pie today.

Your payment history is the largest aspect of your credit score, as you might expect. In total, your pay history accounts for 35% of your total score. This portion of your total score calculation is based on your prior payment history with your creditors. Late payments, defaulted accounts, bankruptcies, and all other NEGATIVE information on your credit report have the greatest effect. The more recent the late payment, the greater the damage is to your credit score. If you go late on your mortgage this month, the Mortgage Industry Option scoring model could drop your scores over 120 points. That is with only one 30 day late payment!

Has the Shelf Life of Shelf Corporations Expired

Shelf Corporations

Personally I think shelf corporations are a thing of the past.  Yet I get asked almost weekly about their value.

Here’s what I think:

A shelf corporation, shelf company, or aged corporation, is a company or corporation that has had no activity.  It was created and left with no activity-metaphorically put on the “shelf” to “age”.  The company can then be sold to a person or group of persons who wish to start a company without going through all the procedures of creating a new one.  Common reasons for buying a shelf corporation include:

  1. To save the time involved in taking the steps to create a new corporation.
  2. To gain the opportunity to bid on contracts.  Some jurisdictions require that a company be in business for a certain length of time to have this ability.
  3. To create an appearance of corporate longevity, which may boost investor or consumer confidence.
  4. To gain access to investment capital.

Factoring and accounts receivable financing.

A/R’s and P/O’s

Accounts receivable financing, sometimes known as factoring, enables a company to better meet the daily operational demands of running a business. This financing program advances the business money on their outstanding invoices, allowing the company to have consistent cash flow. Inadequate cash flow is the number one reason why businesses fail.

When to Use Accounts Receivable Financing / Factoring? Examples of when to use AR Factoring financing are described below:

  1.     Companies in a high growth cycle needing consistent operating capital (cash flow) to fuel their growth
  2.     Companies in survival mode needing consistent cash flow in order to fulfill their liabilities
  3.     Staffing agencies with high weekly payrolls requiring immediate cash on hand
  4.     Manufacturers and Business to Business service- oriented companies with high material and supply costs
  5.     Companies looking for alternative debt-free financing solutions to build their credit and enhance their business
  6.     Companies already leveraged by existing debt

What the credit bureaus don’t want you to know

The Adversarial Nature of the Credit Bureaus

 

 

Its sad but its true.  Every day across the United States a business owner, like yourself, is turned down for an Unsecured Business Line Of Credit, a Business Credit Card or a Business Loan because of a blemish on their credit -a blemish that might not even be your fault!

 

Most people with bad credit arent deadbeats trying to avoid their bills, so why are they suffering the same embarrassment as the people who are? Its not fair. Sometimes things happen that we have absolutely no control over, but we still have to live with them. Fortunately, theres hope. If you know how the credit system works you can learn how to make it work for you. Can you imagine being able to make what is unofficially the most powerful system in the country work for you? If you know the secrets, you can do precisely that.