Loans, Insurance & credit card information

If you’re in the business of originating commercial loans, you know how important it is to protect yourself. A commercial loan fee agreement is one of our most important tools. Going through the long and difficult process of underwriting and closing a commercial loan all to not get paid or only collect a portion of what you expected is one of the more painful and disappointing experiences you can go through in this industry.

We know. We have had several situations where we didn’t get paid, only got a portion of what we were told or did collect our fee, only after getting an attorney involved and going through a long and draining process.

Putting together a deal after hearing the funding bank saying something like “oh, we don’t have formal agreement with brokers, but we’ll pay you a point outside of closing” is like hoping to get paid back that $500 loan you gave to your high drop-out cousin. Sure, there is a chance you’ll get paid back.

Or if you’re working on a deal and not expecting to get any YSP from the bank and you’re depending on the borrower to finally sign that fee agreement, after they know who the bank is and what they are offering, is also a seriously weak position to be.

Unfortunately, we have had both “friends” as well as national lenders that we have work with for years short us at the end of the day. The reasons and stories behind these vary, but bottom-line – if you don’t have your agreement signed and in hand in the beginning of the process you are relying on their kindness to pay you. As my old boss used to say “I won’t walk across the street for a client without a contract”.

If you have been struggling to pay off your student loans then you may have questions about defaulting. Some people get into financial trouble and are unable to pay their monthly rates. This can get you into a heap of trouble. Your interest rates can be raised, you can be charged a lot of fees and your credit can be affected. You need to understand the terms of your loan and figure out how to avoid ruining your credit.

The first thing to figure out is what type of loan you have. There are Federal Student Loans, parent loans, private student loans and so forth. If you do not have a copy of your loan agreement then you should request it from your account management company.

One great feature of student loans is that they usually have special circumstance relief benefits built in. You may be able to suspend your payments until you are back on your feet without incurring a lot of fees or interest. You need to contact the company that manages your student loans as soon as possible. If you simply default or stop paying, then they can take steps to collect from you. This can be more severe than threatening letters in the mail. For some types of loans, they can garnish wages and get your tax refund before you to recoup the money that you owe them. Your credit will be ruined and your loan balance will steadily increase with every collection effort.

You may be able to get your student loans cancelled, deferred or you can go into forbearance.

Deferment has to be granted by your student loan lender. They only take special specific circumstances into consideration when deciding whether or not to grant you a deferment. Financial hardship, unemployment or returning to school are the three main reasons for companies to grant a deferment. This will only get you out of payments for a short time, but that could be long enough for you to get back on your feet.

Cancellation of your student loans means that you never have to pay them back. Only extreme circumstances qualify for loan cancellation. For example, if the person that is responsible for the loan dies, then it may be cancelled. If you are permanently disabled and are unable to work, then your loan can be cancelled. There really are not any other reasons that a company will consider if you want your loan cancelled, but if you have some other rare special circumstance, it does not hurt to ask.

Deferment stops your payments for a period of time where interest and fees are also halted. This is really your best bet for some payment relief. Some loans defer interest payments only where others defer all of your fees and payments. Ask your lender about what you may qualify for. If you do not qualify for deferment, forbearance is your next stop. Forbearance only stops your payments for a short period of time and interest always continues to mount during this time. Most people just having trouble making ends meet can usually get a forbearance granted. Deferment is a lot harder to qualify for.

Be sure to call your account manager when you have questions about your student loans.

The first thing I noticed about “Business Loans From Family & Friends: How to Ask, Make It Legal, & Make It Work” by Asheesh Advani was that the book had a foreword by Richard Branson. Having admired the founder and chairman of the Virgin Group, I figured if he’d endorsed it, I’d take a look. I was not disappointed.

The book covers a topic that you don’t see that often. Sure, there are books on entrepreneurship out there that suggest a source of funds may be family and friends, but this book delves into the subject matter at a much greater level and provides a lot of practical advice on the topic.

The book is divided into eleven chapters with the following titles:

Why Raising Money From Family and Friends Is For You and Yours
Checking Out All Your Financing Options
Basic Legal and Tax Issues of Business Loans From Family and Friends
Deciding Who to Ask for Money
Preparing Your Business Plan and Your Fundraising Request
Deciding Interest Rate, Repayment Schedule, and Other Loan Terms
Drafting a Loan Request Letter
Making the Kitchen Table Pitch
Preparing a Promissory Note, Security Agreement, and Other Loan Documents
How to Be Your Own Investor Relations Department
Handling Gifts From Family and Friends

For anyone who is looking for small business financing, this book may have just the information you need. There is a lot of useful information here, and one of the best things I believe is that it gets the reader thinking about costs and sources of money for their business venture.

The book also comes with a CD ROM that contains a number of forms and worksheets. These are also found in Appendix B. Sample promissory notes, security agreements, and letters are a few of the documents included.

Nolo does an excellent job at making legal information accessible to everyone, however, depending on your situation, you may still want to seek out legal advice regarding any loan agreement you enter. However, this book is a great start and a very good resource for anyone who is looking to finance a small business and needs to raise money from family or friends. Very good resource for small business financing!