Information Online.

This is the best guaranteed and different video sex other than watching videos on this site, make sure you find a solution regarding sex videos here. sex movies review here Seeing the development of information technology and  telecommunications, especially in the search for sex video, there are many video that you can find here and enjoy with your spouse, or change the way we communicate emergence and development of the internet growing in the world of sex videos porn. This site also provides professional color sex in Video quality is the best sex like this video and pleasure will not replace him, need to remember what a unique offering, that you will never be able to get from anywhere else but here. Especially if you watch this video to make you fantasize in sexual intercourse, so this video is the solution in gang bang, With all this in a review in this website and we introduce a sex video By adding a touch of sexy in a sort of guarantee that he will not see the parts of the machine for you and your substitute for sexual gratification and make you become someone who is ideal in a great fantasy.If you watch this video you must have sex to feel satisfied with everything presented in this website, with the correct information of this video is also a solution that is helpful for you, it will make much easier for you to get the orgasm you want.

All this can be fun and unique both in the comfort of your own home or in a good hotel room with your friends And sex videos will definitely make you more satisfied in sex Bang You Later. Sex videos can get more than you want and you are looking for sex in video quality in the reviews on this site. and the information here can help you with this sex video information and as a source of sexual pleasure gives that people know exactly what to do with the look you want in site porn and The video in the greatest pleasure and will not come before you to watch and enjoy this site And step toward a new world of sex. The information contained in this sex video is a great example of something that you can only get from what you are looking for sex is quality, Have fun with the sexual whispers in your body with all the fantasy of sex in site the best sex videos. information about the sex video that makes you and here is the solution. Some videos about sex and start their own company by watching the video in directly from the information online.

Financing Your Small Business

As a small business owner you face a variety of different financing options. Some of your choices include finding investors, pulling out business loans and applying for government grants. This article is going to address the latter two of the three previous options and discuss what you as a small business owner can do to secure additional capital for your business.
Loans
Loans are borrowed funds that your business will have to pay back, usually with additional interest. They are the most widely available resource for small business funding and are worth mentioning in this short article. The U.S. Small Business Administration currently has three different loan programs for small companies and businesses; the 7(a) Loan Program, the Microloan Program and the CDC/504 Loan Program. Each of these government-sponsored programs is designed for a specific purpose and is available to businesses that meet the standards and requirements of each respective program. More information regarding these business loan programs can be found on the SBA website under the Loans & Grants section of their website.
Aside from the previously mentioned government loan programs, small business owners can decide to obtain funding from local financial institutions. Most financial institutions offer a wide variety of business loans with varying interest rates and monthly payments. Common types of business loans include loans for real estate, loans for company equipment and loans for the vehicles you use to perform company services and activities. Each of these loans has the potential to benefit your business in a variety of ways and the usefulness of each loan depends on the type of business you own. Most financial institutions have a portion of their website dedicated to businesses and typically provide information on the type and availability of their loans within this section. If you feel more comfortable meeting someone in person and shaking a hand, most local banks have a dedicated staff for small business owners. They're always more than happy to help.

Project Financial Management

Over the past decade or so we have been constantly bombarded with news about private and public projects that have either delivered scope at well over the expected budget or had to reduce scope to even come near to the original budget. Current thinking within project management methodologies only discuss the financial aspects of a project at a high level, leaving the "student" without any real way of working to greater understand the impact of their decisions on the financial results of the programme. In turn, the business case development is usually given minimal time and is a rushed job in the end. Investing in the correct people and time up front to review feasibility and secondly the business case is a must to ensure the total on target delivery of a project.
In the financial climate we are in, where budgets and costs are being cut, the time is now to ensure that whatever funding a company has available, that they invest it wisely - to do that you need to ensure that the project in the end - budget, costs and benefits are comprehensively reviewed.

Private Equity Fund Providing Construction Loans ($20M+)

The traditional commercial lending market has dried up, especially for construction loans. Anyone seeking a commercial construction loan will need to find a private equity fund to accomplish their funding needs. I have discovered just such a fund that is actively lending large commercial construction loans for both domestic and international projects.
The private equity fund has $1B in liquid cash and $2B in stand-by letters of credit from their investors. The fund uses a bond wrap around the note in Germany to recoup their cash and replenish the fund every 60-90 days. This private equity fund for commercial construction loans ($20M+) is very transparent, after NCND agreements are executed with their master broker. They will provide capacity and proof of funds through an attorney affidavit and will also provide title company contact information to verify closings. The bottom line is these guys have money and are funding projects.
This private equity fund will finance 100% of the construction cost (including land acquisition) as long as the appraised completed value is 80% or less of the construction loan amount. Typical rates and terms for a quality domestic construction project is 9.5% interest only, interest reserves until stabilization, 6 points paid out of loan proceeds, 3-5 year term with funding in approximately 60-90 days after Letter of Intent is issued. There are no "upfront" fees, yet the fund requires a 3rd party review fee ranging from $16,000 to $24,000 based on the size of the project after an LOI is issued and the client has received proof of funds. Also, after commitment is issued, the borrower is required to place 1% of the loan amount in a bonded and insured pre-closing escrow account which is used to satisfy closing conditions. The principal's signature is required for all disbursements and any unused balance is credited back to the borrower at closing. Other than that, this is essentially 100% financing for large commercial construction projects.
The documentation required is similar to that of conventional underwriting which includes an appraisal, environmental study, feasibility study, approved permits, corporate tax returns and personal financial statements on all borrowers. For seasoned developers with "ready to break ground" construction projects in excess of $20M, this may be a viable solution until commercial banks decide to return to this market. This construction loan process starts by completing a 2-page Intake Form and speaking with the master broker. Once their NCND agreement is signed, the principal will be in direct contact with the private equity fund and their attorney through closing.

Finance Your Log Home

If you intend to construct a log home, you have to approach it in a systematic manner and follow it up with meticulous planning. Finance is the main consideration in your log home project. You have to ensure that you are adequately covered from the start of your project until completion. Too many log homes have gotten stuck at the end of construction because the money ran out. Therefore, it is advisable to begin preparing for it well in advance and provide for emergencies that may arise during the course of completion.
Ascertain your Financial Condition
The first thing you need to do is take stock of your financial resources. You need to have sufficient funds at your disposal before you get your project underway. Experts advise that you need to earmark funds of at least 40% of the total budget in cash to guarantee that your log home gets completed without a snag. If you run into a crisis, it can seriously hamper the progress of your project if you do not have adequate finance to get you through the rough patches. Moreover, the more your project is delayed, the more it will cost you. So before you apply for finance to banks and private lenders, make sure your own finances are in good shape.
Applying for Finance
It is better to be safe than sorry. Following this principle, it would be better to apply for the maximum amount of finance through a construction loan as is possible. However, every project must have its boundaries. This is because expenses have a way of spinning out of control if they aren't checked. Rather than being conservative and approaching only banks for a loan, you would do well to explore other sources of finance. Consider contacting log lenders for finance. They tend to be less restrictive than banks when it comes to financing. Most of the conservative lenders will finance you only when the materials are on the site. But this can be a problem because log home companies generally demand payment before the logs are dispatched to the site.
However, a log lender will be more co-operative and will understand the process of building a log home. Initially you will have to apply for a construction loan since you are effectively building a home. But once it is complete you can convert it into a mortgage loan spread over a 30 year period or whatever is most feasible for you. Do not make a spot decision but rather consult with many lenders to get the most attractive repayment terms.
Initial Groundwork
Before you apply for a loan it is prudent to get pre-qualified. This involves having a discussion with lenders about your income to debt ratio. You will probably have to supply documentation like proof of income, recent tax returns, and retirement savings accounts. Figure out how much you are eligible to borrow and the kind of terms you can expect. Also, get your credit score from the three credit bureaus: Experian, Equifax and Transunion. The higher your credit score, the lower the mortgage interest rate you will be charged.
Eliminate Wasteful Expenditure
With a little bit of vision and foresight you can get your budget in control by saving on fittings, fixtures, floor panels, doors, windows etc. Use imitation materials instead of the authentic ones. Try to keep the floorspace to less than 1500 square feet. Select a floor plan that is easy to construct, with the bathroom over the kitchen for reduced plumbing costs. If you exert discretion in selecting material and positioning your home, you can eliminate wasteful expenditure and make sure you do not exceed your budget.

How Do I Pay For a Remodel Or Addition

One of the main concerns you may have if you are doing a remodel or addition is how you are going to pay for it. Thankfully, you'll find that there are a variety of different payment options that you can consider when you are trying to complete a remodeling project or you want to do a new addition on to your home. From home equity loans to using your savings, you have many options to choose from. Here is a closer look at the options for payment that you have to consider, as well as the pros and cons for each one.
Home Equity Loans
When it comes to paying for your addition or remodel, one of the best financing options that you have is a home equity loan. This is basically a loan against the equity that is in your home. No, this is not a new mortgage, but it allows you to get money back from the equity that is in your home. When it comes to the pros, you'll find that this type of a loan is usually going to be deductible from your taxes. At the beginning when you get the loan, you can get the entire lump of money that you need. You can get a great deal by getting a variety of quotes. On the negative side, this gives you another loan that you have to pay for. You also have to make sure that you have enough equity in your home to do this.
401K Loans Are Loans Against Your Retirement
Another option that you have for financing your addition or remodeling project is to take out loans against your retirement. On the pro side, you'll find that you get to pay the interest to yourself on this loan that you take out. However, there are some disadvantages as well. The interested that it would be making if invested is lost. Also, if you happen to lose the job that you have, you may have to pay that loan back right away to the bank.
Construction Loans
Construction loans, otherwise known as a construction mortgage, is another option you have when trying to pay for a home addition. If you are going with a remodeling project of addition that is going to be fairly large, this is a great idea. Even if you do not have enough equity in your home to get a home equity loan, usually you can get a construction loan anyway. On the other hand, the interest rates are quite a bit higher than the home equity loans and they are not deductible on your taxes. In many cases you'll find that these loans are only short term as well until the construction has been totally completed.
Home Equity Line of Credit
A home equity line of credit is yet another option to consider. This is a bit different than a home equity loan. With the line of credit, you don't have to take all the money at once, which means that in the beginning, the finance charges that you will have to pay are quite a bit lower. You can also get quotes on these lines of credit to help you save money and get an excellent rate. It can be a negative option though because the repayment period is not as long as a mortgage and you have to pay on another loan other than your home mortgage.
Refinancing and Cashing Out
If you refinance your home for a higher amount and then take the extra cash, this can help you to get the money that is needed for your home addition. Usually when you go with just one loan that is larger, you can get a better interest rate. However, you do have to have enough equity in your home to get a higher amount on the refinance. The entire loan will be charged interest that you'll have to pay as well.
Spending Your Savings
If you actually do have a savings account build up, then you may want to consider using it to help pay for a remodeling job or for a home addition. This is probably one of the best ways that you can pay for this. It is definitely going to be the option that is going to cost you the least. However, if you do decide to go this route, you should never use up everything that you have in your savings account. Some money should be saved in order to take care of an emergency if you happen to have one.
Getting a Loan from the Contractor
Contractors often offer loans as well and they are available to most people who own a home. Beware though, they usually have extremely high interest rates and the terms are not always the best. Also, you may have to work with a certain contractor if you take out this type of a loan, so it is usually not the best option for you.
Using Your Credit Cards
Using your credit cards is another option that you can use to pay for your additions or remodels. Many people who own a home do have a credit card and may be able to use them to pay for some of the costs related to remodeling or adding on to their homes. However, these options are in no way deductible from your taxes and the interest rates are very high as well. So, when you are doing a remodeling job in Minnesota, credit cards are not really the best way for you to go.

Mezzanine Financing

What is mezzanine financing? Here is the text book definition:
Mezzanine financing is similar to a second mortgage; the main difference is that mezzanine loans are secured by a fraction of ownership of the project, as opposed to the real estate. If the principle defaults, the mezzanine lender can foreclose on the stock in a matter of a few weeks. If you own the company that owns the property, you control the property. So a mezzanine loan is secured by the stock of a company, which is personal property and can be seized much faster. Mezzanine loans depend on cash flow for repayment.
How do mezzanine loans work? They're written in such a way where the lender has ownership in the property or project. They are similar to second mortgages, but make it far easier for the owner to maintain ownership of the property without actually losing holistic ownership of it to the lender in the case of default. Since the property that was financed produces income, it is incredibly simple to use a portion of this cash flow to repay the mezzanine lender. Mezzanine lending for this reason is a popular option for landlords, gas station owners, and virtually any other type of commercial property owner.
Mezzanine financing allows you to have a loan default and keep your business too. Defaulting on the original agreement to pay back the original short-term loan is then extended to be paid off over time via the businesses already existing cash flow. This mechanism of the mezzanine loan operates as a fail safe against a foreclosure on the actual property.
Mezzanine finance is the best solution in almost all commercial lending scenarios. It is possible that a hard money loan, bridge loan, commercial mortgage, or some other commercial financing product is better suited to you. Mezzanine finance is part of a portfolio of commercial financing services than can be obtained through a good commercial financing broker. If you do not already have a commercial financing service firm working on your behalf, it might be time to find one.

Construction Loansl

These loans provide all the money needed for purchasing the property and then undertaking the major remodeling project that requires additional funds.
There are many options for those who want to do some major remodeling on an existing property. These loans provide a wide range of benefits to ease the demanding financial needs of a remodeling project. There are even constructions loans that do not require payments all the way through the construction phase so you can concentrate on optimizing the construction works.
Financing The Purchase And Remodeling Of A Property
You can obtain high loan amounts so as to pay for the purchase price of the property plus the costs of construction. Varied loan amounts are available that can reach up to $3,000,000. This can be done because the loans are based on the projected value of the finished property rather than on the purchase price of the existing property.
There is however a loan to cost limitation which is usually 95%. This means that the amount of money you will be able to get won't exceed 95% of the overall costs including the purchasing of the property and its remodeling. Therefore, you'll need the equivalent of 5% of the overall costs of the project in cash prior to starting the major remodeling project.
Financing The Remodeling Of An Already Owned Property
It is also possible to obtain a construction loan to remodel a property that you already own. You can also use the money to construct on the same land, either another property or an add-on to the existing one. And all of the costs of such enhancements can be obtained from a construction loan. This is especially great for those who don't have enough equity on their property to resort to equity loans or mortgage loans.
However, loan to cost limitations still apply to these loans since the loan is still based on the value of a property that doesn't exist yet. Thus, you'll need reserves in order to finance the whole project. However, if you have owned the property for at least a year (some lenders require two), you'll be able to obtain 100% financing without difficulties.
Expenses That Can Be Included
There are a lot of different costs that can be included in these loans: The purchase of the land or an existing property, project plans, architect fees, accountant fees, authorization fees, real estate fees, loan expenses like closing costs and administrative fees, etc. Also, the actual costs of the construction: the purchase of the materials, the costs of the material work like wages and contractor fees, etc.
The loan to cost ratio will depend on the loan amount and on the applicant's credit score and history. It usually can reach up to 95% of the overall costs of the project but sometimes this limit can be bypassed. This limit includes the reserves for interest and contingency that protect both the lender and the taker during the construction phase of unexpected expenses which on these projects, always occur.

Industry Loan Program

The USDA's Business & Industry (B&I) loan program is designed to improve business, industry, employment and the overall economic and environmental climate in rural communities. In an effort to ease the credit crunch on "Main Street", the American Recovery and Reinvestment Act (ARRA) aims to boost the existing B&I program to encourage lenders to participate.
ARRA provides for several B&I program enhancements, which are available through September 30, 2010:
o $1.7 billion of new rural business lending can be guaranteed. This is in addition to the 2010 budget amount and equal to approximately double the level of past annual B&I activity.
o B&I-ARRA funding will be approved as requested from a central pool at the National Office to avoid potentially inadequate state allocations of the funds.
o The B&I guarantee fee is reduced from 2% to 1%.
o The annual renewal fee of ¼% is eliminated.
o 90% guarantees are available on "high priority loans" up to $10 million
"High priority loans," which are eligible for a 90% guarantee, score at least 55
points under the B&I scoring system. Generally speaking, a loan is considered "high priority" if it provides "quality jobs" and is in a "distressed community":
o A business provides "quality jobs" if it meets one of the following criteria:
o Pays an average wage rate that exceeds 125% of the Federal Minimum Wage or at least $9.07 per hour.
o Qualifies under the Work Opportunity Tax Credit Program
o Offers healthcare benefits package to all employees, with at least 50% of the premium paid by the employer
o A business is considered to be in a "distressed community" if the area experiences any of the following:
o Outmigration: Population loss each decade for the past 40 years
o Persistent poverty: 20% poverty rate or more for the past 30 years
o High unemployment: Greater than 125% of the national unemployment rate
o Underserved area or underrepresented group: Area that has historically not benefited from B&I assistance or a minority- or women-owned business
If a business is not in a distressed community and/or does not provide quality jobs, the project may still be eligible for B&I-ARRA funding with less than a 90% guarantee.
Along with the benefits, B&I-ARRA funding brings additional requirements:
o Buy American: Projects for the construction, alteration, maintenance or repair of a public building or public work must use American iron, steel and manufactured goods
o Vehicles: Any vehicles financed must be manufactured in the U.S.
o Davis Bacon Act: For loans in which more than $2,000 will be spent for construction, alteration or repair, laborers and mechanics must be paid prevailing wages in accordance with Davis Bacon Act
o Ineligible Projects:
o Zoos
o Aquariums
o Convenience stores (unless creating quality jobs and sells E85 fuel upon completion)
o Pools
o Water parks
o Hotels/motels with pools/water parks
o Golf courses
o Museums
o Casinos or other gambling establishments
Aside from these restrictions, the program works just like the original B&I guaranteed
loan program. Furthermore, any project that complies with B&I standards but does not meet the additional ARRA requirements may still be approved as a regular B&I loan at the state level.

As a closing attorney, Ms. Johnson reviews SBA, USDA and conventional loan files, confers with loan processors and in-house counsel, drafts, analyzes and negotiates loan documents, and advises on franchise issues, 401(k) guaranty waivers and guaranty purchase matters.

Comparing 2nd Mortgage Loans

Many people think of a second mortgage as a fixed interest, lump sum loan. However, that is only one form of a second mortgage. A second mortgage is actually ANY secondary lien on your home--secured loan with your home pledged as collateral. Second mortgages are typically categorized as fixed mortgage rate home equity installment loans (HELs), also known as home equity loans, and home equity lines of credit (HELOCs) which are adjustable rate mortgages.
The Federal Reserve states that the home equity line of credit annual percentage rate (APR) is a variable rate loan based solely on a publicly available index (such as the prime rate published in the Wall Street Journal or a U.S. Treasury bill rate). The APR does not include points or other finance charges. The monthly payment amount will adjust as your loan balance and interest rate changes. Loan terms can be anywhere from 15 to 30 years.
HELOCs have a draw period, typically occurring in the first 10-15 years, with the remaining term on the loan referred to as the repayment period. During the draw period, you can draw out money on a revolving basis similar to a credit card without applying for a new loan, as long as the amount does not exceed the total amount of the original HELOC. During the repayment period you may be allowed to renew the credit line. If your plan does not allow renewals, you will not be able to borrow additional money once the draw period ends. Interest is paid only on the amount of equity you use.
A Home Equity Installment Loan (HEL) is a fixed mortgage rate loan, which means the annual percentage rate (APR) and monthly payment will stay the same for the life of your loan. The APR for a HEL takes into account the interest rate charged plus points and other finance charges. Loan terms can be anywhere from 5 to 30 years, but are typically 15 to 20 years. Unlike a HELOC, you get a lump sum for which you immediately start paying principal and interest. If you decide later that you need additional funds, mortgage refinancing or getting an additional loan with additional closing costs are your only options.
Which type of loan you choose depends on your financial needs. A HELOC may be best if you have a recurring need for money (e.g., home improvements or a home repair project that has anticipated additional expenses). The security of a fixed-rate 2nd mortgage will probably provide much-needed relief for a large one-time expense (e.g., debt consolidation)

Finance Your Bathroom Redesign Project

If you're planning a bathroom redesign project, you'll need to secure financing. Here are a few of your options.
Self-build mortgages. This type of loan is typically used when constructing a new house, but it can also be used to make extensive improvements to an older one.
Home equity loans. These loans often have very reasonable terms-especially if you can lock in a low fixed rate-but if you can't pay the loan back for any reason, your house may be at risk.
Mortgage refinancing. When you refinance your mortgage, you replace your existing home loan with a larger one and apply the extra money toward your redesign project.
203(k) mortgages. An FHA-insured 203(k) loan allows you to add the costs of your redesign project into refinancing of an existing mortgage.
Energy-efficient mortgages. These mortgages factor your house's level of energy efficiency into the value of the home, allowing you to qualify for more money than you would otherwise if your home is efficient.
Personal loans. With a personal loan, you typically get a smaller amount of cash under a quicker repayment schedule, with a higher interest rate than you'd normally get with a loan that uses your house as collateral.
Redesign projects often don't go as planned. With all the surprises you're in store for, the last thing you'll want is a surprise in your financing plan. Take your time in researching your options, and you should be able to secure financing for any size bathroom redesign project.

Financing A Fixer Upper Short Sale or Foreclosure

One problem with the non-existent real estate recovery is the fact that many if not most of the short sales and foreclosures on the market are fixer uppers in need of repair.
For whatever reason these homes almost always have something wrong with them that will put them in this fixer-upper category. This is not surprising since there are many factors rendering these properties in poor repair. Possibly, the previous owners had money troubles with their mortgage and couldn't sink their last pennies in to the house they would lose anyway. More often, these homes sit vacant and get vandalized or the pipes freeze over the winter. The banks hire companies that secure the properties and sometimes won't allow the utilities to be turned on for inspections rendering them un-financeable in another way.
One would think there would be plenty of house fixer-upper/flipper investor types out there that could just be buying, fixing,flipping and selling for a profit. It is not that simple if they can't get any financing even if they are well qualified. If one is a normal owner-occupied home purchaser and wants to jump through the proper hoops, fixer-upper or rehab loans are available (to get around the fact that banks aren't dealing with the condition of their foreclosure portfolios). These loans are helping our economy process these properties, but there is not much out there for those wanting to get a rehab loan on a non-owner occupied home.
The problem is to get enough of these houses sold to help the housing market recover, we need the help of the American investor, who unfortunately is out of cash and needs to finance these projects. Maybe there is a landlord or property manager that would like to pick up a few more of these homes for their portfolio. They will run into the same road block if they want to finance a rehab project. Government insured loans and other programs were restricted to owner occupied purchasers in order to protect the consumer from too much investor competition, but now it is time to open the flood gates and let individual american investors make some money and take the profits back from the 1%. For now these foreclosures will continue to grow grass in their gutters until there is something promoting the rehabbing of our housing infrastructure not just by homeowners, but by the small time investor as well.

Home Financing Loans

There are many home financing loans, so choosing the right one is important. Educating yourself is the wisest investment you can make. So, be sure to fully educate yourself on home financing loans. You should learn: what APR means, what "fixed" means as opposed to "variable," the different types of loans, the loans for which you qualify, the current rates, how many years you want to pay off your house and the total cost to move into your home.

Home is what you make it, and so are home financing loans. Before you apply for a mortgage, obtain your credit report. This information is very important for the application process. First, you will need to decide on a lender and sign a purchase contract. Next, you get a credit approval which verifies your income, your ability to pay the loan and any liabilities you may have. Then, present all proof of income, assets, and debts to the lender. This information is essential for the application process. You may be charged an application fee. Inquire about this before your appointment with the lender. The total application process can take between one and eight weeks.

The market fluctuates so much that interest rates can go up or down within a day and even within an hour. You have the option to lock in your interest rate. Make sure that the lock-in period will not expire before you close on escrow. Most often, you can lock in this rate on home financing loans between 30 and 60 days. Be sure to ask whether there is a fee for this option and whether it is refundable.

Home financing loans vary, but they are either fixed or adjustable. A fixed rate means that the rate does not change. Conversely, an adjustable rate does change. Adjustable rates are typically lower, but these types of loans are more risky because the rate can drastically increase.

The APR is the annual percentage rate. The APR and the interest rate are not the same. The APR takes into account the cost of the loan on a yearly basis, which includes interest, any origination fees, and insurance. For example, as of the date of this article, a 30 Year Fixed Rate for the market is at 3.75% for the interest rate and 3.88% for the APR.

It is possible to "buy down" your interest rate. You pay in points. A point is 1 percent of the loan amount. For example, one point on a loan of $100,000 is $1,000. Naturally, whether this is a good investment depends on how long you intend to live in your home. The longer you live there, the more financial sense it makes to choose this option.

Ask your lender specific questions. Find out the interest rate of the loan. Ask whether you will have to pay any points to "buy down" your interest rate. Find out what costs you will have to pay for, e.g. the closing costs. Ask whether there is a prepayment penalty.

There are many types of home financing loans, the following are a few basics. FHA mortgage loans are insured by the government, allow you to pay a low down payment and can also decrease closing costs. VA loans are available to veterans and/or widows and widowers; they do not require a down payment. Additionally, an ARM loan, or adjustable rate mortgage loan, has a fluctuating interest rate which may rise or fall from day to day.

How to Get Home Loans With Poor Credit

If you have bad credit it may not be very easy to get a home loan. Though there are several companies and agencies which lend to such people, the rate of interest and other penalties will often be very high. Many people who have taken such loans have found it very difficult to make the repayments. However, if you want to get one of the home loans with poor credit, you can follow some simple steps to avoid problems down the road.
Before shopping for a home loan, you have to check your credit rating. Sometimes, you may not have a very bad rating. A score under 620 is considered poor. A score below 680 but above 620 means that there is a good chance that you can get a loan. When you have bad credit the best idea is to raise the score by making some repayments and keeping your account as current as possible. Also make a budget to identify how much you can pay off in monthly installments.
However, if you have too many debts, you will not be able to qualify for home loans with poor credit. So you will have to save some money for a larger down payment. The more you can pay the better the terms you will receive for your home loan even if you have a bad credit score.
By making a large down payment you will be in a position to show the lender that you have some responsibility in order to lower the monthly payment. You may have to pay a high rate of interest because of your low credit score. The only way of lowering the rate of interest is by making a large down payment.
Whenever you are offered any kind of loan you need to look at all of the points, closing costs, fees and penalties. That will help you to assess the total cost of a loan. If you have an extremely poor credit rating you can ask someone to co-sign. The person should have good credit. Do not fall into temptation and get something like an ARM, or adjustable rate mortgage loan. They have low monthly rates in the beginning which increase as national interest rates increase. You may have to pay larger amounts in the following years.
Before you decide on one of the offered home loans with poor credit, shop around to gather details, compare the terms of different lenders, and choose one which has a fixed rate of interest. Also, check the other fees and charges which need to be affordable for your particular budget.

Armed Forces Military Loans

Having a job in the military is unlike having a job anywhere else. The pay is steady but not quite up to the real demands of military life. That is why there is a class of lenders who specialize in military loans. Many of these lenders are staffed by former military personnel so they know the situation of the military borrower first-hand.
No matter what kind of loan you are seeking, you will be looking for the lowest interest rates and the most comfortable repayment terms. And, there are scofflaws in every business; you have to be careful about whom you choose for a lender. Sometimes various military loans are referred to by different names: disaster relief loan, bereavement loan, career service loan, leadership VIP loan, premier loan and senior leadership VIP loan.
Preparing to Apply for a Military Loan
You first step should be to build a budget. You may want to get one of the free budget calculators available online. You need to arrive at a good income-to-debt ratio. After you have subtracted all your necessary monthly obligations, do you have enough money left over to make a monthly payment without putting yourself into hardship? Your lender may consider your credit scores, but your salary and debts will ultimately be the determining factor. You might want to go ahead and pull your credit scores so you can see how a lender looks at you financially and to see if there are any errors.
You will need some documentation when you apply for a military loan. Have it ready to go so as not to delay your application process. A lender will want to see your military identification along with proof of your rank and salary. You will need to present proof of residence or duty station. You will also require a bank account; checking with direct deposit is preferred so the lender can put the loan funds directly into your account. Since you are making the application online, these documents can usually be scanned or faxed to the lender.
Shopping for a Military Loan
Point your browser to Military Loans and you will be pleased to see pages and pages of lenders who may be willing to lend to you. Visit their sites and find four or five who have interest rates, loan amounts and repayment terms that look good to you. Then check each of those lenders with the online Better Business Bureau listings. You should find each lender graded and see feedback from previous customers. You should also check online personal finance forums and ask others about experiences they have had with certain lenders. Be sure any website where you divulge personal or financial information is secure.
Military loans are offered two ways - secured and unsecured. A secured loan has the borrower put up valuable property such as real estate or a car or boat as collateral on the loan. Should you default on the loan the lender can seize the property and sell it to cover the cost of the loan. These loans usually grant larger loan amounts with lower interest rates. Unsecured loans have only your promise and your signature. Since these loans present more risk, the loan amounts tend to be smaller and the interest rates higher.
Military Life Sometimes Similar to Civilian Life
Military folks, just like civilian folks, can get into a situation where they need or want a little extra cash. A military loan exists for that purpose. Retirees and other government employed folks can find loans similar to military loans. With a little care, you should be able to enjoy the benefits of a military loan without all the hassle a civilian might face.

Personal Loans, Poor Credit - Yes, You Can Still Borrow

More and more people in today's world are finding themselves in a poor credit situation. Debt can mount up very quickly and you can be given a poor credit rating which will badly affect the way you live. Personal loans poor credit can give you the opportunity to start rectifying the situation.
If you're a home owner there is always a possibility of re-mortgaging your house. However, if you've had difficulty in keeping up with the mortgage payments, this may not be the answer, unless of course you can arrange for longer repayment terms.
Certainly many lenders require some form of collateral to secure the loan, so it's important to bear in mind that such loans must be repaid on a regular basis or you may lose your home.
There are many lenders who are prepared to offer unsecured loans. If you're living in a rented house or flat, living with your parents, have a bad credit history, or even if you have County Court Judgments against you, these lenders will give you a loan.
In either case it's essential to have all the information about your financial situation available so that they can assess your requirements. When offering an unsecured loan they will need to know your earnings and what your outgoings are.
The more prepared you are when seeking a loan, the better your chances of getting reasonable rates of interest, and better terms.
Try to organize your finances in such a way as to show you're capable of paying the monthly loan. This will help the lender to decide how much they're prepared to loan, and the repayment terms.
Discussion with the proposed lenders will enable you to come to a mutually agreeable arrangement, giving you the best possible way in which to reduce your debt.
Many reputable lenders can be found on the internet, and they can give you a great deal of information which will assist you in applying for a loan. Whatever your history there are lenders who will consider you, so have all your information to hand, including the reason for the loan, and you will be processed quickly.
A poor credit situation can cause endless hours of worry and a great deal of distress, but the situation is never irreversible. By talking to the right people and being honest personal loans poor credit need not be an issue for you or your family any longer.

Student Loans in the US and the Gods of Educational Debt

Student loan defaults are rising in the United States (and so are the debt rates) and we should wonder: are we be really surprised by all this?
Everybody knows what a student (or college) loan is: it is very simple, it is just "another loan" that is in fact designed to help college students pay for their tuition, living expenses, books, and the likes. The difference from other types of loans is that (i) the interest rate is quite lower with respect to a "standard loan" (the one you could get to buy a car for instance) and (ii) the repayment schedule is deferred for the entire duration of the education. Accepting a student loan, of any kind, should be done with extreme care, and the student should be aware of the basic facts and total US figures: - The current outstanding student loan debt in the United States stands at more that $830 billion; - Almost 14.5 millions are the undergraduates who enroll for college; - Each college student in higher education pays (but this is just an average figure) almost $11,000 to attend university education.
The figures above are impressive and we may wonder how the US can keep up this huge higher education loan deficit that appears to be getting wider and wider... Anyway, for sure a student loan has some advantages as said, in particular, the 2 major advantages of a student loan over conventional loans are: 1) Lower interest rates; 2) Easier repayment terms.
You can have a private student loan or a federal student loan. In the case of a federal student loan, Federal Direct Student Loan Program, also called Direct Loan Program or FLDP provides low interest loans for students (and parents) to help pay for the cost of college education after high school. The lender, in this case, is the U.S. Department of Education and not a bank or a financial institution, such as SallieMae for instance (and in this case we would be talking of private loan). For sake of clarity, also consider that until recently, there was the Federal Family Education Loan or FFEL Program, the second largest of the US higher education loan programs initiated by the Higher Education Act of 1965 and funded through a public/private partnership. Following the passage of the Health Care and Education Reconciliation Act of 2010 on March 26, 2010 FFEL Program was eliminated, and no subsequent loans were permitted to be made under the program after June 30, 2010. In other words, following the passage of the Health Education Reconciliation Act of 2010, the Federal Direct Loan Program is the sole government-backed loan program in the United States.

Seek Assistance of Experienced Subsidy Consultants for Profit

If you are running a business, you may require assistance for various issues like bank finance, TUF interest subsidy and many more. There are many consultants who will provide you with consultation on these matters and will guide you throughout the process. These consultants are highly experienced individuals in subsidy consultation and have clear knowledge about the rules and regulations of the process. There may be many startup businesses that may need assistance with TUF (technology upgradation fund) loan. The consultants here are well versed with the TUFS and the latest occurring and developments regarding the same. The consultancies also offer a variety of other services, such as Project Finance, Home Loan, Foreign currency loan, Textile Subsidy and more.
The consultancies aim to serve their clients with passion and quality and ensure that all their needs are met. They offer quality loans and subsidies that ensure long-term returns. They offer services that create an extraordinary productive network with their customers. The primary concern of TUFS Consultants India is customer satisfaction and they try their level best to achieve that. Some consultants have years of experience in this field and know different ways to keep their clients satisfied.
In order to cater to the different types of financial services, a reliable company has a team that includes successful individuals from various fields, like MBA, C.A as well as Ex-Bankers. They are always willing to provide you all the financial services at a competitive rate along with customer service. They also offer consultation on capital subsidy for all industries. There are many textiles companies that can enjoy the benefits of the subsidies. Your textile interest can get different rates on TUF interest subsidy as well as on capital subsidy. You will be suggested the best course of action that will also be financially profitable. You can also seek guidance in regards to exemption from electricity duty. You can get all the necessary assistance and consultancy at competitive prices.

SBA Lending Increasing, Driving Up Demand For Business Valuations

Changes under the American Recovery and Reinvestment Act (ARRA) to Small Business Administration (SBA) loan programs have recently led to a rebound in SBA-backed loans for small businesses, many of which require the lender to obtain an independent business valuation from a qualified source. Learn how an increase in SBA lending has driven up demand for business valuations.
To begin, let's take a more in'depth look at the two most common SBA loan guarantee programs: 7(a) and 504 loans. These two guarantee programs have distinct characteristics and requirements.
7(a) Loan Guarantee Program
The 7(a) Loan Guarantee Program is the SBA's primary program to help start-up and existing small businesses obtain financing when they might not be eligible for business loans through normal lending channels. The name comes from Section 7(a) of the Small Business Act, which authorizes the SBA to provide business loans to American-owned small businesses. The SBA itself does not make the loans, but rather it guarantees a portion of the loans that are administered by commercial lending institutions.
There are four major 7(a) loans:
- Express Programs
- Export Loan Programs
- The Rural Lender Advantage Program
- The Special Purpose Loans Program.
In order to be eligible for a 7(a) loan, the Small Business Applicant must be: an operating business; organized for profit; located in the United States (includes territories and possessions); be able to meet the SBA definition of "small"; and be able to demonstrate a need for the desired credit.
504 Loan Guarantee Program
The 504 Loan Guarantee Program is a long-term financing tool for economic development within a community. It provides small businesses requiring "brick and mortar" financing with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization. A Certified Development Company (CDC) is a private, non-profit corporation set up to contribute to the economic development of its community. CDCs work with the SBA and private sector lenders to provide this financing to small businesses.
Typically, a 504 project includes:
- A loan secured from a private sector lender, with a senior lien covering up to 50% of the project cost;
- a loan secured from a CDC (backed by a 100% SBA-guaranteed debenture with a junior lien covering up to 40% of the total cost; and
- a contribution from the borrower of at least 10% of the equity.
Proceeds from 504 loans must be used for fixed asset projects, such as:
- Purchasing land and improvements, (including existing buildings, grading, street improvements, utilities, parking lots and landscaping);
- construction of new facilities or modernizing, renovating or converting existing facilities; and
- purchasing long-term machinery and equipment.
The 504 program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing.
In order to be eligible for a 504 loan, the business must be operated for profit and fall within the size standards set by the SBA. Under the 504 program, the business qualifies as "small" if it does not have a tangible net worth in excess of $7.5 million and does not have an average net income in excess of $2.5 million, after taxes, for the preceding two years. Loans cannot be made to businesses engaged in speculation or investment in rental real estate.
Deal Volume has Increased Substantially in Response to Federal Support
As part of the American Recovery and Reinvestment Act (ARRA), the SBA received $730 million to help small businesses. These initial funds were issued on February 17, 2009, and were exhausted within nine months, on November 23, 2009. A second allocation of $125 million was provided by Congress in December 2009 that was exhausted by late February 2010, at which point an additional $60 million was provided. This subsequent extension allowed the SBA to continue to waive loan fees and provide higher guarantee levels through April 30, 2010. This also culminated in a weekly SBA loan dollar volume increase of more than 90% in the SBA's 7(a) and 504 programs over the period from February 17, 2009 to April 23, 2010.
This additional funding and encouragement through ARRA resulted in more than 1,253 additional lenders providing SBA-guaranteed loans during the time period of February 17, 2009 through April 23, 2010. These were lenders that had previously issued SBA-guaranteed loans but had been inactive since 2007 or earlier. The SBA has also expanded 7(a) loan eligibility to more than 70,000 small businesses through a temporary alternate size standard.
After months of reduced activity and lower premiums, SBA data suggests that the 7(a) secondary market is picking up and premiums are beginning to recover. From June 2009 to March 2010, the average monthly loan volume settled from lenders to broker-dealers in the 7(a) secondary market has been $340 million. This has provided lenders with additional liquidity to increase lending. This deal volume means additional work for lenders and business valuations appraisers.

SBA 7a Vs 504 Loan Programs - How To Decide Which Loan Program Is Best For You And Your Business?

As a small business owner who is ready to purchase a commercial property for your business, you might find yourself faced with a seemingly difficult choice between the SBA 7a loan program, or the SBA 504 loan program.
As you make your decision about the sba 7a vs 504 loan option, chances are you are receiving conflicting advice and information. In fact, its entirely possible that your lender might be offering both of these commercial mortgage programs to you - and they might even try to convince you that the SBA 7a loan is the better option.
In reality, the sba 7a vs 504 debate isn't even a contest. The SBA 504 commercial mortgage program is by far the better commercial mortgage program for a small business owner, for a number of reasons. If your lender tells you that a SBA 7a loan is the better option, they are likely doing so because they have an agenda that doesn't match your own.
When comparing the sba 7a vs 504 loan programs, the biggest difference you'll find is that the SBA 504 program was actually designed for use by small business owners to finance commercial real estate properties that they buy for their businesses, while the SBA 7a program was not.
The SBA 7a program was originally intended for use in financing business acquisitions, FF&E, working capital loans, and other high-risk loans. However, because of a few unique qualities found in the SBA 7(a) loan program that benefit the lender (and NOT you), greedy bankers began using this program to finance real estate properties, even though it is a dangerous loan for the borrower.
The SBA 7a loan program can be very dangerous for you and your business, while the SBA 504 loan program is very beneficial.
Some of the key advantages of the SBA 504 loan program include:
1. Long-term fixed rates - with fixed rates up to 20 years
2. Ability to finance up to 90% of the total project costs
3. Ability to include closing costs and loan fees in the financing
These are just a few of the many advantages made possible through the SBA 504 program.
And unfortunately, there are several drawbacks to an SBA 7a loan.
If you are currently deciding between the sba 7a vs 504 loan programs, then it is absolutely vital that you educate yourself about the dangers inherent to the SBA 7a commercial mortgage program, and why the 504 commercial mortgage program is a much better and SAFER loan option for you and your business.

Construction Loans and Home Improvement Financing

For many individuals, adding a pool, an addition to the home or making repairs, requires the use of a mortgage. There are many ways that you can use your home to finance construction projects and home renovations. Obtaining a mortgage loan to finance your construction project or home renovation is often the most affordable route offering the most flexible financing options.
If you are thinking about seeking a construction loan, home renovation loan or mortgage, here are variables that you should consider:
1. Depending on the required loan amount, a home-equity line of credit (HELOC) may be the most cost-effective option. Home equity lines of credit; typically carry lower interest rates when the loan is less than 75% of the home value. A fixed rate loan program is available at higher interest rates and is available to 90% of the home's value. For this reason, home equity lines of credit and some fixed rate second mortgage financing work best for smaller loan amounts that will be paid off in a reasonably short period of time.
2. Borrowers who need larger loan amounts and who intend to keep the outstanding balance for a longer period of time may want to consider refinancing their first mortgage, paying off the existing balance and increasing the loan in an amount sufficient to pay for the improvements. While this option will most likely require the borrower to pay closing costs, the benefit of this option is usually a lower interest rate over an extended period of time than is typically offered by other Home Improvement loans.
3. Construction or Construction/Permanent loans are best suited for extensive renovations requiring multiple draws to contractors or labourers. Draws are usually set up monthly and are subject to at least a 10% holdback of funds in accordance with "construction liens" laws. In addition, many lenders prefer to fund these draws on a cost-to-complete formula where the funding program insures that there is always enough money remaining after each draw to complete the project in the event of a problem or default. Each time the contractor requires a draw an architect, engineer or appraiser is called in to determine the value of the work in place and the remaining work to be completed. The lender will use this information to determine the amount of the draw that will be advanced. These loans are usually set at a float rate of 1 to 3 above bank prime for non-private funding and may contain a permanent (take-out) mortgage which comes into effect once the construction is complete and beyond the 45 day construction liens period.
In many instances, the lender will require plans and specification for improvements. Lenders will also require an appraisal of the subject property reflecting the value of the improvements in the new valuation.
There are so many lenders out there that include banks, finance companies, mortgage investment corporations and private lenders. Depending on your credit standing and the equity in your property, if you are planning a construction project or a home renovation, you likely have many financing options.

Finding A Business Loan In Illinois

Illinois Finance Authority:
If you run an Illinois-based business and mulling over its expansion plans, then Illinois Finance Authority (IFA) offers you cost-effective solutions. As the state's investment banking arm, IFA enjoys the position of the most recommended low-cost financing source. The self-financed body works in coordination with various Illinois agencies, financial institutions, and lenders to issue tax-exempt and taxable bonds, provide loans, and investment capital to businessmen, non-profit corporations, and statewide government and agricultural units. Every year, IFA approves nearly $3 billion project finance applications, thereby, plays an important role in economic development of the state and creation of jobs in it.
Programs Offered by IFA:
IFA offers several programs aimed at assisting the business community in Illinois by giving them easy capital and affordable finances, which result in development of the economy and retention of jobs in the state. These programs include: Community Service Block Grant (CSBG), Illinois Capital Access Program (CAP), Enterprise Zone Participation Loan Program (EZPLP), Manufacturing Modernization Loan Program (MMLP), Minority Women and Disabled Participation Loan Program (MWDPLP), and Participation Loan Program (PLP).
Benefits from these Programs:
CSBG offers financing at fixed rates over the long-term for business establishment or expansion, creating employment opportunities for the low-income group. Such loans constitute 20-49% of a loan project and charge interest rates ranging from 5% to 7%; CAP motivates financial institutions to develop loan products for small-scale new business that do not qualify conventional lending parameters. CAP is a type of insurance for loan portfolio, which gives the lender additional reserve coverage. In case, the borrower defaults; EZPLP offers small businesses special loan rates that are lower than the rates offered by conventional PLPs. MMLP provides finances to manufacturers who intend to modernize or upgrade their facilities or equipment to achieve greater operating efficiencies. MWDPLP provides loan facilities to small-scale businesses that are 51% held by minorities comprising women or disabled. Such loans can comprise 50% of the total project cost; PLP offers financial assistance through banks and other financial instructions to the small businesses that provide employment to Illinois workers. Such loans do not exceed 25% of the entire project cost.
Eligibility Criteria for these Programs:
All the privately owned businesses that are based in Illinois, which have less than 50 employees can benefit from such programs. Such companies, must be however, engaged in development or commercialization of a technology or invention. Finances are available for carrying out research, testing, marketing, and development of technological products. Such funds obtained from the financial institution must be used for acquiring fixed assets for the set-up of expansion of the business.
IFA does not charge any fees for provision of such loan programs.

How To Use Construction Mortgage Loans To Finance A New Home Building Project

Construction mortgage loans are a short term loan that finances the cost of constructing a new building. Once the building is completed the construction loan is paid off. Construction loans are meant to cover only the cost of building a new building. The loan is paid off once building is finished. The construction is usually paid from the proceeds of a conventional mortgage loan.
Usually you only pay interest during the construction phase. When the construction is completed the balance of the loan is due. A certificate of occupancy will then be issued. A certificate of occupancy is issued by the local government. It certifies that the building meets all the building and zoning laws and is ready to be occupied.
When building a new home the loan is usually part of a construction-to-permanent financing program. With these the loan automatically turns into a mortgage loan once the certificate of occupancy is issued. With construction-to-permanent financing there is only one application and one closing.
Construction loans typically have a variable rate of interest. The interest rate is often tied to the prime rate or a similar short term interest rate. During construction you will only have to make interest payments. If you already own the land that the building is going to be built on then you can use the land as equity on the loan.
If you currently own a home that you are selling you can use a bridge loan to raise the funds for a down payment on your new home. A bridge loan is a temporary loan. A bridge loan bridges the gap between the price of your new home and your new mortgage in case your current home has not sold yet. Your existing home is used to secure the bridge loan.
When you take out a construction loan you and the builder will agree to a draw schedule. The draw schedule is the schedule of payments that the builder will receive. The draw schedule will be based on the different phases of the building process.
Construction mortgage loans makes the building of new homes possible. Without them there would not be sufficient capital to finance new development. These loans are the mechanism that keeps the building industry viable. If you need a loan consult with your banker and your construction company to come up with a loan plan for your project.

Analysis of Risks to a Project

• Project Finance has become an increasingly attractive technique for financing infrastructure projects in developing countries over the last twenty years. Furthermore, the use of project financing raises difficult legal issues with respect to the ability of developing countries' governments to control the provision of public services that are intimately connected to these infrastructure projects. Project finance has several advantages, such as the opportunity for investors to participate directly in an otherwise inaccessible and lucrative-albeit risky-market and the ability to participate in high-risk investments without diminishing creditworthiness. Lenders for projects are primarily large international commercial banks, such as ABN Amro and Citibank, or multilateral lending agencies, such as the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD). They will in no doubt, therefore, seek to put in some issues in a term sheet.
• The first step in setting up a project financing usually involves the sponsors or developers forming a project company known as a special purpose vehicle or entity, which is designed to construct, own, and operate the project facility. Thus project finance benefits sectors or industries in which projects can primarily be structured as a separate entity from their sponsors or developers.
  Thus it is the project company, which is the entity that is borrowing funds for the project. The lenders loan money to the project company with the assets and cash flow of the project acting as the security interest for the project loans.
• Definitions and Meanings
  European Investment Bank defines project finance as "a loan made primarily against cash flows generated by the project, rather than relying on a corporate balance sheet, the security value of the physical assets or other forms of security".
• A project developer is the sponsor or the borrower for the project.
• A power purchase agreement (PPA) is an agreement which serves as one of the pre-requisites for the lender to borrow funds for a project. It is a contract that "there will be ready market for the project on completion".
• A term sheet is an outline of the principal terms and conditions proposed for the project and investment. It is not in itself a legal document but a sort of draft proposals subject for approval by all parties involved.
• Types of Risks
  In project transactions, there are typically numerous parties from different jurisdictions involved, and accordingly, the laws of many different jurisdictions are potentially applicable to any given transaction. Thus the uncertainties or fears expressed by each party translate to a risk of a sort. It becomes important that the terms sheet or the PPA or the PSA be analysed accordingly and where necessary, find the appropriate legal regulations or instruments to mitigate any risks.
• Risks are different for each project - they are often country-specific, and differ depending on the kind of project one wishes to undertake.
• There are, generally different kinds of risks with the magnitude being different from one project to another project. Some of the acceptable forms of risks that should be considered at all costs are as follows:
  - Sponsor risks
  - Pre-completion risks
  - Inflation and foreign exchange risk
  - Operating risks
  - Technological risks
  - Completion risk
  - Input risk
  - Approvals, regulatory and environmental risk
  - Offtake and sales risk
  - Political risks
• Believe it or not, when all the risks-financial, construction & completion risks, technology & performance risks, foreign exchange & availability risks- are critically analysed, it could be deduced that they are to a greater extent linked to government's policies; in other words, political activities or ideologies. Linking political risk to regulatory risk in most of his study, Louis T. Wells, Jr described Political and regulatory risks as a key impediment to private investment in the infrastructure sectors of developing and transition economies; and are defined as" threats to the profitability of a project that derive from some sort of governmental action or inaction rather than from changes in economic conditions in the marketplace: in each case, action or inaction by political authorities or their agents, rather than changes in supply and demand of goods and services, must be the proximate cause of the change in profitability"(Moran H Theodore ,1999). Planning and political risk occurs due to the long gestation periods of infrastructure projects. During these long periods, projects are vulnerable to changes in policy (Vickerman, 2002).
• Despite the appeal of project finance, the extensive amount of political risk associated with it is very high. For this report, political risk is going to be mentioned and analysed most as the main risk to the project developer.
• Political risk:
• Generally, the main known political risks are the following:
• -Expropriation:
  The act of taking something from its owner for public use. There are many instances in the former eastern Europe and especially in Africa, where governments decide at the break of the day to take something from a private individual for the use and benefit of the public in the name of what they term as "people's power" ," revolution" and so on. This is very upsetting and makes project development a high risk to a project developer.
• -Nationalisation:
• Transfer of business from private to state ownership. This is not usually experienced in the west as in South America and Africa. Political ideologies in most part of these continents are influenced by one-party state cronies who believe in nationalism than in capitalism. There is the saying that "once bitten, twice shy"; most of these governments are in the developing countries and have the fear that as the west colonised them in the past it could happen again.
• -Change of law:
  The host government can change the laws overnight and this can affect a project. Sometimes for economic and political reasons, tax laws are enacted which might not be to the advantage of the project developer in terms of the cost increase to certain elements which could increase the purchase price of the product on completion and can jeopardise the PPA.For example an increase in the fuel tax can affect the supply of fuel to the project. Environmental-related issues are also to be blamed for reasons in change of law to please environmentalist pressure group and sometimes for political reasons. Any or all of these could one way or the other affect the project developer in an on-going project or proposed project.
• Furthermore, there could be a breach of contract for political reasons.
• Thus accordingly, Theodore, (1999) divided the political and regulatory risks that private infrastructure investments and for that matter the project developer are exposed to, into three overlapping categories:
  a) Parastatal performance risks: risks of non-compliance with supplier agreements or purchase agreements by the government or government entities leading to political risk. This is to say that government agents or authorities will fail to honour their part of the obligation thereby politicizing the issue.
• b) Traditional political risks: risks relating to political uncertainty, lack of Government support, delay in clearances (which primarily have to be taken from government authorities), currency convertibility and transferability, expropriation and breach of investment agreement. This could take any form from delaying permits to failing to sign licenses on time because someone is not happy because no gifts might have "passed under the bridge". There is therefore, the tendency that the project developer will face this exposure, which lenders would not be happy with.
• c) Regulatory risks: risks arising from the application and enforcement of regulatory rules, both at the economy-wide and the industry- or project-specific level. They overlap because they affect one or the other politically. Within emerging economies and under developing countries, regulatory bodies are being set up as independent bodies to minimise the political risk faced by the investors. However, in many instances, these so called independent bodies may come under tremendous pressures from their governments and tend to get influenced. For instance, a regulator, for political reasons, may make decisions relating to tariffs that render a project unattractive to investors, sometimes with the view to transfer the deal to a family friend or a political crony. This is a very common practice in Ghana.
• Furthermore, infrastructure projects are subject to continuous interface with various other regulatory authorities that expose them to possible regulatory actions thus affecting their profitability. It is conceivable that explicit tariff formulae ensuring remunerative pricing at the start of the project can be negated subsequently by regulatory authorities on the grounds that tariff was too high. This issue is also very common in Ghana where the term "big elephant" has become synonymous with projects that have been abandoned over the years due to the above political reasons.
• Nonetheless, the following risks can be argued to have their roots in one political activity or the other.
• Legal risks
• Following change of law in political risk discussed above, possible legal risks to a project developer include inadequate legal, legislative, and regulatory framework on sales tax, export & import restrictions, pensions, health and safety rules and penalties for non-compliance. Sometimes the case and administrative laws in the country concerned are not developed. These issues are of great concern to lenders and for that matter the project developer will have to deal with this risk.
• Construction & completion risk
• Another key risk is construction and completion risk. In the event when construction of the project is delayed for any reason whatsoever, the completion date might be affected.Levnders, therefore, focus upon cost & schedule overruns and time-delay risks of the project in great detail.
• Sponsor risks
• This risk deals with n two significant issues which banks are so much concern with. They are equity commitment and corporate substance (i.e. corporate strengths and experience).On corporate substance; banks consider that sponsor risk has something to do with completion date and for that matter completion risk. For this reason, whether or not the sponsor or project developer has sought pre-completion guarantees, the banks looks further by working with corporate sponsors with substantial technical expertise and financial depth. because of the belief that "one puts his money where his heart belongs", regarding equity, lenders will normally require a contribution between 15% to 50% of the project cost to ensure the sponsor is committed to complete the project on schedule.
• Financial risks
• Financial risks usually cover interest rates, foreign exchange rate & availability risk, currency and inflation. Inflation really affects the project developer in a PPA for reasons like raising the cost of the project which can delay its completion due to lack of funds. Some governments are also skeptical about foreign investment in their country and sometimes prevent the repatriation of funds by foreigners outside. Devaluation and interest rate just like inflation can also affect the projects negatively especially when provision has not been made in the PPA for that. International funds are often cheaper than local ones, but given the fact that the energy generated is sold locally, and paid in local currency, using foreign loans creates exposure to the risk of currency depreciation.
• Environmental risks
• Global warming is becoming 'national word' if not a household word. Thus environmental risk is of great concern to both the government and a project developer because of the aftermath of certain projects like land degradation, pollution of rivers, and air. Lenders are concerned about their liability to meet vast claims arising out of pollution caused by borrowers and so demand high in a PPA.In a PPA, for example, the sponsor or the project developer is responsible to provide "reasonable and customary measures within its control required to ensure the protection and security of the site". This goes to say that the project developer is responsible to secure regulatory and other approvals like licences and other local permits needed for the project. The significance of this is that until recently, project developers leave land unattended after exploratory activities and corporate social responsibility was not known to corporate bodies but now it is gaining roots. To please the locals, corporate bodies have to take extra responsibilities because of the aftermath of certain projects. This could even serve as guarantee for borrowers.
• Offtake and sales risk
• The uncertainty that the project will fail to take off and bring in adequate income to offset the cost of the project is known as Offtake and sales risk. When a project fails to generate the required income, lenders cannot be repaid. Sometimes the selling of the output to the market is also uncertain. Banks in effect have high interest in anything that might affect this risk and so will look for assurances in the business plan of the project developer. The onus of this risk is that the project developer had to make extensive market analysis to get to know the market demand for the product or output. It could be energy alright but if the macroeconomic situation of the country concerned is not sound, the income generated could not meet the investment. Ghana had a similar experience in the late 90s when the government in power decided to extend electricity grid to the rural areas where .It became a big issue as the villagers could not afford the payment of the tariff , the government could not pay either and the electricity corporation had to run a huge debt.
• Technology & operation risk:
• Technology risk is usually when the technology being applied or proposed for the project is "very new" and not really known by the lenders. Lenders are particularly concerned about such projects and will do anything to minimise such risk. Operation risk deals with the aftermath of the project and it running.i.e the risk that forecasted cash flows arising from the failure of operations of the project. Banks are not only concerned with the competency and financial capability of the contractor but also those who are going to run the project must apply the relevant technology for its day to day activities in order to generate the required cashflow.
• - Others like local knowledge, customs of the local people, for example if it has to deal with hydro-related project, some river deities have to be pacified and the project could be delayed for the mere reason that some chiefs or local leaders might politicised the whole customary rites to the extent that the project cost might swell or even be called off.
• Even though we are not analysing the responsibilities of the seller and buyer in a PPA, suffice it to say that both parties' responsibilities are considered vital hence the need to have proper enabling environment especially politically in order to execute the project successfully. This will have to come about with the help of the Government in power.
• Actually, developers have built up experience in negotiating PPAs and factor in time for negotiations which are necessary to get a satisfactory deal. Wind energy schemes are generally seen as a low risk technology, compared to other renewable energy technologies.
• Nevertheless some developers have noted that PPAs are generally not long enough and that it takes time to find a suitable solution which can lead to delays. Most comments in relation to PPAs focused on the need to maintain certainty in the Renewable Obligation in order to avoid destabilising the market. One smaller developer noted that 'political change is a big worry...we wouldn't be able to finance projects if the RO changed'.
• The minimum investment criteria for renewable energy projects varied from respondent to respondent, but typically investors do not want to commit to projects until financial close or beyond, when all project risks have been satisfactorily mitigated in terms of planning, technology, performance and long-term revenue security (PPA). Some investors will look for a minimum project size, in terms of installed capacity or output per annum, whilst others will look for a minimum amount of debt to be provided at an internally acceptable rate of return.
• Mitigating the Risks
• In the World Report 2006 by UNCTAD,some key causes of delay were discussed.
• Although of the perceived risks, no single element was unanimously highlighted from the responses as the most significant cause for delay. It was reported that, beyond planning approval, mitigating risks to enable finance and insurance to be secured is the next most significant barrier highlighted by all of the developers. The ability for a developer to raise finance is greatly affected by the perceived risks of the project and or the developer himself. Financial investors or lenders will typically require all risks associated with fuel supply, planning conditions, construction & completion, and wayleave rights, power purchase agreements, technology and the EPC contract mitigated prior to their participation, which would normally not be before project financial close has been reached. This will also inevitably be a concern to a project developer.
• Nonetheless, the following approaches have been suggested as ways and means to reduce or eliminate the risks mentioned above. Among them are:
• Track record of country:
  With regard to political risk, the solution lies in having a stable political atmosphere in the country in which the project developer is investing. And because of the way some political leaders influence the populace with their ideologies, it id expedient that there is a sound legal framework like rule of law in place to combat the way issues are politicised.Sometimes it is clear that personal ideologies are made to take precedence over what will benefit the whole nation. Another mitigating approach is to have proper laid down investment and other financial regulations in place which can help out project developers reduce or eliminate political risk in a PPA.Local knowledge is also very important. A recent issue reported in the News and the Financial Times about locals in Ethiopia killing 9 Chinese workers among 74 people working in an exploration site in Ethiopia because of what the locals described as "not having their permission to mine in their territory". This kind of issue could have been avoided should the Chinese knew about the local perception about their presence with regard to the project and adhered to. In most instances, sound macro-economic indicators i.e. sovereign credit rating, for reserves, trade balance, future government obligations are very important to lenders and provide guarantee to the project risks being minimised.
• Insurance by World bank or credit export agencies:
  The risks of a Government changing its position in terms of law could be covered on the political risk insurance market. Occasionally, export credit agencies enabled equipment suppliers to sell on credit by covering most of the buyers' credit risk. The market for political risk insurance in developing countries is still small. This is because; first, significant South-South FDI is a recent phenomenon, and as a result, demands for political risk insurance from developing-country. Traditionally focusing on trade, export credit agencies (ECAs) in developing countries have not yet fully developed political risk insurance services for investors and their capacity to underwrite is limited. There are, however, indications that concerns about political risk and awareness of risk mitigators are growing as investors from developing countries seek out business opportunities in other developing countries.
• Occasionally, export credit agencies enabled equipment suppliers to sell on credit by covering most of the buyers' credit risk. But in recent years, several new risk mitigation instruments have become available.
• Lease-purchase scheme:
  The full package of risk mitigants used in typical project finance can carry a high cost, too high for smaller projects. But some of the concepts of project finance can be used even in rather small projects in order to reduce risks. For example, the "limited recourse" aspect of project finance has been used in a lease-purchase scheme for small hydropower plants in Cambodia. It works like this; local entrepreneurs prepare the project, showing that the proposed plant is economically and financially viable. On the basis of this feasibility study, they can then negotiate a power purchase agreement with the national utility, Electricité de Cambodge (EdC), and they would also sign a lease-purchase agreement for the hydropower plant; both will come into operation only once the plant has actually been constructed. On the basis of these two agreements, the entrepreneur can then obtain short-term construction loans from local banks and equipment suppliers - in other words, until the plant is constructed, the entrepreneur takes all the risks.
• However, once the plant is operational, the lease-purchase agreement becomes operational: EdC buys the plant from the entrepreneur for the total of his construction loans, which can then be reimbursed. EdC leases back the plant to the entrepreneur, and deducts the payments due for the lease from the electricity payments it makes under the PPA. After a fixed lease period, the entrepreneur can buy the plant from EdC for a symbolic US$ 1. This scheme considerably reduces financing risks and, therefore, costs, and makes this form of renewable energy competitive with conventional energy sources. This scheme in my opinion will work not for small projects but also many projects in general considering the fact that the lease-purchase scheme becomes operational after the project has been completed.
• Receivable-based finance:
• The crux of the receivables-based financing structure lies in leveraging contractual obligations within the value chain. Receivables from the power purchaser or receivables from other partners in the chain can be used either as security or for directly meeting the financial obligations related to the renewable energy project.
• Structured finance techniques:
  Structured finance can help overcome some of these barriers and manage many of the risks, though not all (policy-and regulation-related issues need to be dealt with by Governments; limited local managerial capacity or poor understanding of renewable energy projects in local banks can be tackled by donor-funded capacity-building programs, etc.). Financial risks can be mitigated through the incorporation of certain elements into the financing structure (e.g. escrow accounts), while others can be shifted to third parties. The possibilities for shifting risk are improving. For example, the possibilities to shift risk to the capital market, through securitization, have much improved.
• Structured finance techniques, which are widely used by financiers in the commodity sector to mitigate a series of risks, can help to reduce the "funding gap" for renewable energy projects, and can help Governments and aid agencies to improve the leverage that they achieve with their financial support. Several case studies illustrate how this can lead to successful projects. Renewable energy is a sector in full expansion -even though it is still far from replacing hydrocarbons as the major source of energy. Renewable energy offers great opportunities for developing countries, in particular for areas that are not immediately adjacent to existing electricity grids. However, private sector financiers are often wary of funding renewable energy projects - a sector with which they are often not very familiar and which carries certain risks. Governments and aid donors support the expansion of the sector, but often have difficulty finding sustainable models.
• UNCTAD has done considerable work on the use of structured finance techniques in developing countries, particularly for the commodity sector. Use of such techniques reduces the risks taken by the financier, including by shifting risk from the borrower to other parties who are more creditworthy, leaving the financier with performance risks rather than credit risks on the borrower. The general principles of structured finance and its potential uses for developing countries are discussed in several UNCTAD reports, as are some particular applications (e.g. warehouse receipt finance).
• Turnkey construction contract:
  With regard to construction & completion risks, a strong Turnkey construction contract is recommended with performance LDs to overcome cost and schedule overruns which could affect the project construction & completion. Lenders can also minimise this risk by analysing whether or not the various contractors' area financially capable and that their obligations are covered by performance bonds or other third party sureties. In another report , another suggestion of fixed price EPC contract with delay LDs was provided to combat cost and schedule overruns. It further indicated that, a World Bank Study of 80 hydro projects studied, 76 projects exceeded their final budgets, with half of those exceeding the cost by at least a quarter. With a strong turnkey construction contract, this risk could be avoided. Another solution is putting in place a sponsor completion support in form of contingency facility, stand-by equity or credit by a credit agency.
• Guaranteed-price PPA:
  There should be long-term guaranteed power purchase agreement or contracts for projects to serve as a key element that can eliminate the price and volume risks from energy projects for example. Contracts could also be drawn such that banks are offered an outstanding Offtake agreement if the other party's (purchaser) financial standing is not certain and the generator has the ability to set output pricing for the whole time of the contract. Finally on Offtake and sales risks, it is recommended that sponsors consider the fact that lenders will wish to take security to guarantee power and heat sale contract. Lenders could also be assured that should the volume and price risk surface again, the sponsor will be prepared to consider paying a portion of the debt.
• On sponsor risks, the effect of reducing this risk is that an invitation could be extended to a more credit worthy sponsor for partnership in the project. Furthermore, smaller sponsors can have their governments guarantee some projects or approach a bank for structured finance after asking for a credit rating form a recognised agency and transfer the risk to a third party.
• With regard to technology & operations risk, the project developer must try to reduce these risks and so must show that the technology is not new and has a high success rating. It should also be demonstrated that the contractor in charge of the building of the project is competent and conversant with the mtechnology.Operations and Maintenance of the project on completion must also be assured ion addition to the fact that warranties and guarantees have been thoroughly negotiated. This could be achieved by engaging the services of a recognised contractor with the relevant skills and competency. This is known to be highly acceptable by banks as reduced operation and technology risk.
• Ghana has recently celebrated its golden jubilee of becoming an independent state dealing with its own affairs so to speak; however, politics has not changed much because politics is the ideologies of individuals. For that reason, so many people within one political party or government can bring different ideas to bear on the politics of a nation affecting project finance one way or the other. It is the inability of the synchronization or blending of these ideas that is really a matter of concern for political risk in project financing. If these could be suppressed or eliminated, then political risk and all the related risks can be mitigated. The list for project risk could be endless considering the fact that people as well as governments' fear and anticipation are very uncertain.However; the risks could be somewhat minimised or eliminated.
• Reference
• 1. Evaluation of PPP by EIB by (on line) (accessed on 10th February,2007)
  2. Hoffman, S.L. (2001) the Law and Business of International Project Finance-a Resource for Governments, Sponsors, Lenders, Lawyers and Project Participants.2nd Edition, New York, Transnational Publishers.
  3. HWWA Discussion Paper 263,January 2004 "Measuring The Potential Of Unilateral CDM-A Pilot Study"(on line) available from hm-treasury.gov.uk/media (accessed 10th February,2007)
  4. Yescombe, E.R. (2002) Principles of Project Finance.UK, Academic Press.
  5. "Proposed Credit to Bosnia and Herzegovina for 3rd Electric Power Reconstruction Project" available on www-wds.worldbank.org/servlet/WDS content. Accessed on 10th February,2007)
  6. abnamro.com/btcpipeline (accessed on 10th February,2007)
  7. member.aol.com/projectfinance/ (accessed on 10th February,2007)
  8. World Investment Report 2006.FDI from Developing and Transition Economies: Implications for development. available online (accessed on 10-02-2007)
  9. "Barriers to commissioning Projects" 2005 by Land Use Consultants in association with IT Power for DTI & Renewable Advisory Board. available online(accessed on 20-04-07)
  10. "Encouraging investment in infrastructure services: political and regulatory risks" by S.K Sarkar & Vivek Sharma, online

Bank Instrument Financing For Project Funding

Arriving at successful project financing is not an easily achieved task in today's banking environment. Companies have gone away from traditional institutional financing in search of other more reliable channels of funds. This is where the advent of using bank instruments as a direct source of creating capital for project finance has opened up.
While it is true that a financial instrument is used for credit enhancement such as in the complicated structured financing employing collateralized debt; bank instruments can be used in a much more simplified fashion to unleash the power of bank credit lines needed to complete project finance.
Most any bank instrument with cash backed value can be monetized to provide the necessary collateral and security a bank lender needs when making a loan. So long as the underlying assets of the instrument is indeed cash or cash equivalent, and the cash asset and the bank issuing the instrument is rated high enough to achieve comfort, many different types of financial instruments can be used for financing.
It is important to stay away from financial assets that are given value by complicated credit valuations with multiple tiers of debt securitization such as mortgage-backed securities, collateralized debt obligations, and securities and bonds backed by corporate debt and other over-valued assets outside of cash backed assets or cash equivalent assets. These types of instruments used in complex investment derivatives helped plunged the financial world into disarray over the last decade, a mess which will take another decade at least to recover from.
Cash backed assets, such as those in the form of bank guarantees, letters of credit, standby letters, certificates of deposit, cash collateral accounts, and other more easy to understand financial assets make financing simple and straight forward. When these types of instruments are used as primary or secondary collateral in connection with a viable project, bankers have an easier time making loans for project financing.
However, if you are not a tycoon big name client with multiple lines of credit and long-standing financial history with top-tier banks most companies and individuals can forget making an attempt to acquire loans of the great magnitude needed for major developments and projects. This is where financial partners with credible financial services companies become important to companies on Main Street.
While the ability to issue top-tier bank instruments as collateral for financing is a crucial piece of the financing process, this does not preclude the importance of ensuring you have solid relationships with lending institutions that can ensure the safekeeping and ultimate return of the bank instrument. This means one must be able to provide a solid bank undertaking, which strengthens the trust and confidence of the investors and asset holders involved to know the lending process will not put the instrument and their cash assets in jeopardy should a default occur.
If you feel you have everything it takes to get financing, but only lack the right cash-backed security and guarantees necessary, seek a competent financial services company to help complete the cycle with you.