Small Business Consulting

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.

Check for Theft

Identity Theft

As your post-holiday credit card statements arrive in the mail, you´ll probably think about what you spent. But have you thought about how much of your personal and financial information was exposed? Sounds like the perfect time to check your Credit Report!

Identity theft

In the past you had to be careful of the carbons when they “swiped” your credit card. Today credit thieves have a whole new high tech and low tech bag of tricks. The only way to make sure you’re safe is to take precautions and regularly check your credit report for inaccuracies, you know, the key changes on your report that could either indicate identity theft or a reporting error.

Pay Day Loans

Avoid Payday Loan Scams

Payday Loan Cycle

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.

Short Sale vs Foreclosure

Surviving A Short Sale

There are several differences between a “short mortgage” sale and a mortgage foreclosure and the effects between the two are substantial for all involved including the borrower or mortgage holder, the bank and a potential real estate agent.

For the borrower, the benefits of a short sale include not having the “foreclosure” designate on a credit report, eliminating
the opportunity for the lender to take legal action against the borrower for the difference between the negotiated “accepted”
price and the actual cost of the property (with a no recapture allotment) and zero tax implications as long as the short sale
is completed and closed before the year-end 2012.  Even if the short sale text is reported to the credit bureaus (which, again,
any wording or verbiage can be negotiated), a borrower will not have to wait the industry standard 24 months for another mortgage.
The obvious benefit for the lender is they no longer have to absorb the operating cost nor the liability of the property until the property is either auctioned off or becomes an REO (Real Estate Owned) property.  The lender knows the realized settlement net because of the accepted offer.

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.

Money education

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.

How Credit Bureaus Make Money

 Credit Reporting and You

Information you as a consumer should know about Credit Bureaus. The Credit Bureaus make money selling your information. The three major Credit Bureaus are in business for two main reasons only and those reasons are to make money, and be profitable for their shareholders. They make their money by selling consumer information to other businesses who lend money. With this information those businesses can assess the risk level of potential borrowers. Many of those businesses are:

Accurate credit report

• Mortgage companies
• Banks
• Credit Unions
• Car dealerships
• Credit Card companies
• Insurance companies
• Collection agencies
• Land lords
• Employers (with your permission only)

The Bureaus enjoy greater financial success if  you have low scores. As a rule, credit card companies do not spend nearly as much money buying the personal information belonging to people that have good credit.

Understanding Your Credit Score Part Four

Mix of Credit

A healthy mix of credit accounts, represents 10% of your credit score. The Credit Bureaus take into account the “mix” of credit items you have on your report. This part of your credit score is affected by what kinds of accounts you have and how many of each.

The Bureaus will score you higher if you have an open mortgage, 3 credit cards, 1 auto loan, and a small amount of other open accounts.  This mix tells the Bureaus that you can handle any type of loan. If you have a ton of credit cards, your scores will be lowered. If you have several mortgages, your scores will be lower. Any, “unhealthy” account mixes lower your scores. The preferred number of credit cards is 3. This means you will actually have a higher credit score if you have 3 open credit cards than if you have two or less. BUT, don’t run out and cancel your cards just yet. REMEMBER, 30% of your score is comprised of your balances in relation to your maximum credit limit. So keep your cards open, but focus on having 3 LARGE balance cards for ultimate impact. Maintain a healthy mix of accounts and your credit score will be golden.

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!
As I stated before, the scoring model is based on your potential to go 90 days late on an account within the next 2 years. ANY recent late payments are a BIG reflection that you will default, and your credit score plummets as a result. Your creditor cannot report you late unless you are 30 days late. BUT, they will claim they need 10 days to process your payment also. So don’t think just because you mailed your payment on the 25th day that they will not report you late. All together, your entire history of payment counts for 35% of your total scores. The more positive accounts you have and the less negative means a MUCH higher credit score. Simply put, to enjoy good credit, pay your bills on time.

Peer-To-Peer Lending

With the credit markets tightening and banks implementing strict lending standards there has been a surge in alternative forms of borrowing money

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