Philwiper.caMortgage and Business Financing

Markets Jump After Fed Cuts Rate – Could this be Good News For Commercial Rates?

The U.S. Federal Reserve has cut the rate by three-quarters of a percentage point to a target rate of zero to 0.25 percent.

U.S. Commercial banks are now expected to lower the prime rate, this is the key rate for many loans to consumers. The current rate is 4%. That is the lowest level on record in the United States for the target rate.

The cut sparked jumps in the stock markets and a drop in the U.S. dollar against other currencies.

The Fed said U.S. labour markets conditions. consumer spending, business investments and industrial production are all falling.

CBC news reports, ” Financial markets conditions remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.”

The central bank commented that the economy is so bad that the rock-bottom rate is likely to continue for some time. They will continue to purchase large quantities of debt and mortgage-backed securities to support the mortgage and housing market.

Stocks Make Move Upward

The move provided a surge in the stock markets. In New York, the Dow Jones Industrial average gained 359 points to 8924. At the time of the announcement it had been up less than 100 points before the annoucement.

The S&P/TSX composite index rose to 8,724.

The U.S. Dollar fell against other currencies, including the Canadian dollar, which closed up 2.02 cents to 83.21 cents US.

The U.S. Labour Department reported that inflation in November fell a record 1.7 percent, the biggest drop since seasonally adjusted statistics were introduced in 1947. The drop in oil prices drove the decline.

The Fed cut was announced after a two-day meeting to consider its response to what some are calling the worst U.S. economic conditions since the 1930s.

Obtaining Business Financing for companies in Canada has always been a challenge. With today’s economic climate Bank Financing has become almost impossible to obtain and there are very few alternative sources.

Factoring or Accounts Receivable Financing has been gaining popularity in Canada as an Alternative source to conventional bank financing. Using the companies strongest asset, the customer as security. Factoring has a number of advantages of bank financing.

Top 10 Reasons to Use Factoring:

1-    Fast and Easy Process – unlike conventional bank financing, the application process is relatively easy and answers can be obtained quickly.
2-    Cash Received for Your Invoices in 24 Hours or Less – Once you have been approved Factoring can provide you with the ability to meet you cash flows need NOW!
3-    Add Capital to Your Business That is Not a Loan - Loans require collateral limited by your hard assets. Factoring is NOT a loan, so there is no debt to repay. A factoring company purchases your invoices at a discount. This enhances the financial ratios often used to determine your credit worthiness in obtaining other types of financing. Your balance sheet is more attractive and your financial position is strengthened.
4-    Invoice Processing – You can greatly reduce your cost of processing invoices because factors can handle much of the work.
5-    High Advance rate – Our participating factors provide Higher Advance Rates which means you factor fewer invoices to meet your cash flow needs, which also means YOU WILL SAVE MONEY.
6-    No Financial Statement required – In many cases, no business or personal financial statements or tax returns requested. Clean personal credit is not required.
7-    Increased Productivity – Business owners often spend more than half of their time work in their business not on their business, with such duties as collections, administration, bookkeeping, warding off creditors and searching for additional capital. Factoring can help eliminate this unproductive time.
8-    Enhance Your Credit – Once you begin factoring, the increased cash flow will provide the liquidity to pay your vendors on time. This will allow you to take advantage of early payment discounts that may be offered. Making timely payments to vendors positively affects your credit rating and allows you to obtain credit from other vendors and financial institutions.
9-    No Loss of Business Ownership or Equity – Ownership percentages remain unchanged with invoice factoring.
10-    Reduce Overhead – outsourcing your Accounts Receivable – Factoring Companies handle collections in a professional manner. Factors are not collection agencies. They understand the importance of business relationships and treat each debtor as though it is your best customer.

Although there are many more reasons that your business should be using accounts receivable financing, Dominion Leasing believes that these 10 reasons are the most important in your decision to work with an accounts receivable factoring company.

The markets were surprised today when The Bank of Canada cut the key interest rate by three-quarters of a percentage point on Tuesday as it warned that Canada is entering a recession, the rate was cut by 75 basis points to 1.5% a 50 year low.
With the interest rate cut the bank of Canada matched the deep rate cut made on October 21, 2001, to deal from the September 11 terrorist attacks in New York and Washington.
The CBC news reports “Canada’s economy evolved largely as expected during the summer and early autumn, it is now entering a recession as a result of the weakness in global economic activity”.
As a result, the bank of canada has lowered the key lending rate by a combined 150 basis points in the span of two months.

When a purchase agreement is signed between a buyer and a seller, the buyer is asked for some amount of money to be paid up front. This amount will be placed in a trust account. This deposit is known as “earnest money.”

The buyer and seller can negotiate the actual amount of earnest money. The amount may differ among contracts. It could be as low as $500 or possibly as high as 10% of the purchase price.

Some factors that can influence earnest money amounts include:

*Seller psychology: an uncertain seller may request more earnest money

*Market conditions: a stronger market may result in more earnest money

*Buyer economics: first time buyers may be asked for less earnest money

This particular financial transaction is a confirmation made in “good faith” by the buyer to show that he intends to complete the agreement. How much or little is paid doesn’t matter.

If it should happen that, during the process, the buyer violates the terms of the purchase agreement or backs out of the deal, the earnest money can be kept by the seller. This does not occur much because, when the purchase agreement s are written , there are “escapes” for the buyer, called “contingencies” written into the original agreement.

A typical contingency is that the seller must provide a clean title policy to the buyer, or that the buyer must secure financing prior to given date, or that the home must pass a satisfactory inspection.

Earnest money will be returned to the buyer if any of the above contingencies cannot be met. Such failure with regard to the contingencies will void the contract.

When contingencies are met, however, earnest money becomes a deposit and is applied directly to the buyer’s bottom line at settlement. If the buyer is expected to have $50,0000 for the closing, for example, the true bottom line is $50,000 minus the earnest money deposit.

Earnest money customs vary from state to state, city to city, and even locale to locale. Be sure to ask your real estate agent and/or real estate attorney for professional counsel before signing purchase contracts. The earnest money you save may be your own.

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Author: Navneet MaheshwariIt

It is feasible to always take help from professional real estate agent to make a lucrative deal. Real estate brokers provide every kind of help to sellers as well as buyers. Without a nice real estate agent, you may never get an implausible deal. There are various ways to find the best real estate agent in your desired area. Real estate agent can be a person as well as a firm that helps you in selling/buying real estate. Checking the local bulletin boards might also provide you with various real estate agents. With the aim to sort out the best from such a huge list, you should ask your family or friends regarding their experience with the real estate agents.

Real estate broker tells you the current value of real estate. Lots of your friends or family might have gone through the exact situation and could recommend a preferred real estate agent to you. Nowadays broker performs all essential business activities. Real estate broker deals with industrial, residential as well as commercial real estate.

Always remember to short list several real estate agents before finalizing the one. Call two or more agents for interview and then ask some questions about the firms where they worked for some time, Once you have short listed few realtors, the next thing to do is to contact the real estate agents in person. Agent can provide help for any kind of real estate. Broker gives suggestions to sellers to increase the cost of assets and also about finest piece of land to the buyers. Without getting the proper information and nice price about your house or the property you want to buy, you may have no illusion where exactly to look. Dealing with which type of customers, how long they’re in sell/purchase business and also ask about active number of clients.

There are few real estate agents who will tell you the true price and might aim to fetch as much money as they can from you, thus look out for the real estate agent that offers you the best property at best price or best deal to sell your property.

This can only be achieved by meeting several agents and then comparing the deal offered by all. Generally real estate agents don’t work as lawyers for the parties but they provide the best services for the sellers as well as buyers. Also look at the number of resources real estate agent has and a large market plan, in order to make the best deal with the best customer. For buyers, real estate agent finds the better real estate as per buyers’ requirements.

Anand is a real estate professional for http://usa.b4uindia.com/realestate/