The Federal Reserve and foreign central banks moved Monday to pump billions of dollars to cash-strapped banks at home and abroad in a dramatic bid to break through a credit clog and spur lending.
The Fed said the action is intended to "expand significantly" the cash available to financial institutions, its latest effort to relieve the worst credit crisis since the Great Depression.
The goal is to boost the amount of quick cash available to banks and other financial institutions so that they'll feel more confident and inclined to lend not only to each other but also to people and businesses.
Credit is the economy's lifeblood. The global credit clog — which started a year ago and grew much more severe in the past few weeks — has made it increasingly difficult for people and businesses to borrow money. The crisis — if it persists — could plunge the economy into a recession, President Bush and Fed Chairman Ben Bernanke have warned.
The Fed action came hours before the House defeated a $700 billion financial bailout plan, ignoring urgent pleas by Bush and Bernanke to move swiftly.
The plan was designed to break through a dangerous credit clog that has threatened to freeze up the entire financial system and throw the economy into a recession. At the heart of the plan, the government would buy bad mortgages and other dodgy debts held by banks and other financial institutions. By getting those rotten assets off their books, financial institutions should be in a better position to raise capital and boost lending, supporters contend.
The Fed's action on Monday expands programs already in place. It is unclear whether it will break through the credit bottlenecks. Its previous actions — including steps along these lines — have provided relief, but haven't halted the crisis.
Against this backdrop, central banks will continue to work closely and are prepared to take "appropriate steps as needed" to ease the crisis and get banks lending again, the Fed said.
On Wall Street, stocks dropped sharply even after the Fed's announcement. The Dow Jones industrials plunged 777 points — their largest point drop ever — or almost 7 percent. The Standard & Poor's 500 index declined 8.51 percent and the technology-heavy Nasdaq composite index fell 9.14 percent.
Under one new step, the Fed will boost the amount of 84-day cash loans available to U.S. banks. The Fed is increasing the amount to $75 billion, up from the current $25 billion starting on Oct. 6. Banks bid on a slice of the loans at an auction.
That move will triple the supply of 84-day loans to $225 billion, from $75 billion, the Fed said.
Meanwhile, the Fed will continue to make $75 billion worth of shorter, 28-day loans available to banks.
All told, the total amount of cash loans — 84-day and 28-day — available to banks will double to $300 billion from $150 billion, the Fed said.
source : http://economictimes.indiatimes.com/
Tuesday, September 30, 2008
Wednesday, July 16, 2008
AR Cash Flow’s views on factoring and bank loans
AR Cash Flow has outlined its views on factoring and bank loans.
Usually, the first thought for a business owner is to seek funds from a bank. Historically, invoice factoring is rarely the first thought of when attempting to overcome a working capital shortage. When first introduced to the idea of factoring, it is common for a business owner to compare all terms, costs and conditions with a traditional bank loan.
Very often, the business seeking working capital will look for a specific amount of money commonly referred to as its credit line or credit limit. Traditionally, the banks dictate a limit on funds available based on the assets (real estate, business equipment, etc.) being pledged as collateral.
Unlimited availability of funds is uncommon in the finance industry and sometimes cannot be grasped by a potential client. In factoring, a client's credit facility is based on his ability to deliver product (or services) and generate an invoice reflecting completion of delivery or service. Elasticity of funds is an unlimited line of funds that grows with the business and provides true cash flow as opposed to cash infusion.
A business must weigh the costs of factoring against not having the immediate cash flow. Most often the choice is between factoring and putting up with severe cash flow problems and missed sales opportunities.
Usually, the first thought for a business owner is to seek funds from a bank. Historically, invoice factoring is rarely the first thought of when attempting to overcome a working capital shortage. When first introduced to the idea of factoring, it is common for a business owner to compare all terms, costs and conditions with a traditional bank loan.
Very often, the business seeking working capital will look for a specific amount of money commonly referred to as its credit line or credit limit. Traditionally, the banks dictate a limit on funds available based on the assets (real estate, business equipment, etc.) being pledged as collateral.
Unlimited availability of funds is uncommon in the finance industry and sometimes cannot be grasped by a potential client. In factoring, a client's credit facility is based on his ability to deliver product (or services) and generate an invoice reflecting completion of delivery or service. Elasticity of funds is an unlimited line of funds that grows with the business and provides true cash flow as opposed to cash infusion.
A business must weigh the costs of factoring against not having the immediate cash flow. Most often the choice is between factoring and putting up with severe cash flow problems and missed sales opportunities.
Friday, June 27, 2008
Don't pay through the nose for quick cash
A fifth of adults would struggle to lay their hands on £100, while a third would have to dip into savings to cover household emergencies. This might explain why thousands of households are turning to expensive short-term loans in an attempt to keep up with debt repayments and pay bills.
Research by Moneysupermarket.com, the comparison website, shows that there has been a 130 per cent increase in applications for such loans since last August. So-called payday loans can be credited to a bank account within 24 hours, but they come with exorbitant interest rates. Borrowing £100 for 30 days costs £25 - an AER (annual equivalent rate) of 1,286 per cent.
Even consumers with the healthiest of incomes can get caught out occasionally, but there are cheaper ways to get hold of cash in a hurry. Here Times Money highlights some of the alternatives.
As long as you do not ask too often, your nearest and dearest should be happy to help you out of a tight spot without charging hefty fees or a penny in interest. Tim Moss, head of loans at Moneysupermarket.com, says: “You should swallow your pride and ask parents or friends for money before considering the alternatives. Informal borrowing is the most common way that people get hold of cash quickly, and if your relatives are nice enough it should not cost you anything”.
news source : http://business.timesonline.co.uk/
Research by Moneysupermarket.com, the comparison website, shows that there has been a 130 per cent increase in applications for such loans since last August. So-called payday loans can be credited to a bank account within 24 hours, but they come with exorbitant interest rates. Borrowing £100 for 30 days costs £25 - an AER (annual equivalent rate) of 1,286 per cent.
Even consumers with the healthiest of incomes can get caught out occasionally, but there are cheaper ways to get hold of cash in a hurry. Here Times Money highlights some of the alternatives.
As long as you do not ask too often, your nearest and dearest should be happy to help you out of a tight spot without charging hefty fees or a penny in interest. Tim Moss, head of loans at Moneysupermarket.com, says: “You should swallow your pride and ask parents or friends for money before considering the alternatives. Informal borrowing is the most common way that people get hold of cash quickly, and if your relatives are nice enough it should not cost you anything”.
news source : http://business.timesonline.co.uk/
Wednesday, May 28, 2008
Maltese company offers cash-strapped Britons loans, at 2,255% APR
loans to desperate borrowers of up to £1,000, but which often result in the addition of hundreds of pounds as interest. This particular service is only available to UK residents.
The company, run by Northway Broker Ltd, makes 31-day loans with an attached fee of £29.98 for every £100 borrowed, which is to be paid in full upon the loan’s repayment.
While it appears there is nothing illegal about the business, which is licensed by the Malta Financial Services Authority (MFSA) to provide money broking services, the operation is certainly not short of criticisms.
Loans are granted for a maximum 31-day period and on the date the loan is to be repaid, the company directly debits the loan amount plus fees from the loan recipient’s bank account. A client’s first loan limit is capped at £200, after which one can borrow up to £1,000, as soon as the first loan is repaid.
Eligibility for the costly loans is simple: one must be 18 years old, reside and be employed in the UK, have your salary paid directly into your bank account, and have a minimum take-home pay of £333.50 per month.
According to the MFSA, the company was licensed in Malta in 2005 to “carry out the business of lending, specialising in short-term unsecured loans known as payday loans”. A second financial institution licence was also issued to Northway Broker Limited to carry out the business of money broking.
Both institutions are subsidiaries of Northway Financial s.a.r.l., a company based in Luxembourg, which in turn forms part of the Canadian NDG Group. The NDG Group was founded in 1995 and specialises in providing unsecured short-term loans over the Internet to US, Canadian, Irish and UK consumers. Since then, Australian consumers have also been added to the growing list – through a company called Payday Mate, which offers the same conditions as Pounds Till Payday and is also operated out of an office in Sliema.
In addition to Malta, the company has three other operating locations in Canada and one in Dublin.
The website of the Pounds Till Payday, based on the eighth floor of the Plaza Centre, states, “Since its inception in 2005, Northway Broker Ltd is increasingly holding various brands well-known in the international money lending industry. From its office in the buzzing heart of Sliema, core activities carried out are the provision of excellent customer care services to its clients and customer base in Europe and North America, as well as extensive back office duties related to the online money lending process.”
Internet consumer fora however, are rife with criticisms of the business including warnings each time the NDG Group sets up another business, while a report on the phenomenon in the British press recently likened such companies, singling out Pounds Till Payday, to loan sharks.
News Source : http://www.independent.com.mt/
The company, run by Northway Broker Ltd, makes 31-day loans with an attached fee of £29.98 for every £100 borrowed, which is to be paid in full upon the loan’s repayment.
While it appears there is nothing illegal about the business, which is licensed by the Malta Financial Services Authority (MFSA) to provide money broking services, the operation is certainly not short of criticisms.
Loans are granted for a maximum 31-day period and on the date the loan is to be repaid, the company directly debits the loan amount plus fees from the loan recipient’s bank account. A client’s first loan limit is capped at £200, after which one can borrow up to £1,000, as soon as the first loan is repaid.
Eligibility for the costly loans is simple: one must be 18 years old, reside and be employed in the UK, have your salary paid directly into your bank account, and have a minimum take-home pay of £333.50 per month.
According to the MFSA, the company was licensed in Malta in 2005 to “carry out the business of lending, specialising in short-term unsecured loans known as payday loans”. A second financial institution licence was also issued to Northway Broker Limited to carry out the business of money broking.
Both institutions are subsidiaries of Northway Financial s.a.r.l., a company based in Luxembourg, which in turn forms part of the Canadian NDG Group. The NDG Group was founded in 1995 and specialises in providing unsecured short-term loans over the Internet to US, Canadian, Irish and UK consumers. Since then, Australian consumers have also been added to the growing list – through a company called Payday Mate, which offers the same conditions as Pounds Till Payday and is also operated out of an office in Sliema.
In addition to Malta, the company has three other operating locations in Canada and one in Dublin.
The website of the Pounds Till Payday, based on the eighth floor of the Plaza Centre, states, “Since its inception in 2005, Northway Broker Ltd is increasingly holding various brands well-known in the international money lending industry. From its office in the buzzing heart of Sliema, core activities carried out are the provision of excellent customer care services to its clients and customer base in Europe and North America, as well as extensive back office duties related to the online money lending process.”
Internet consumer fora however, are rife with criticisms of the business including warnings each time the NDG Group sets up another business, while a report on the phenomenon in the British press recently likened such companies, singling out Pounds Till Payday, to loan sharks.
News Source : http://www.independent.com.mt/
Wednesday, May 21, 2008
Personal loan rates up 1%
Research by moneyexpert.com reveals the average rate for a £5,000 loan is now 10.16 per cent compared with 9.45 per cent in November 2007, while the average rate for a £7,500 loan has increased by 0.91 per cent to 8.88 per cent, compared with 7.97 per cent in November 2007.
The credit crunch is not only making personal unsecured loans more expensive, but also harder to come by as lenders become more picky about who can borrow.
Some 1.38 million people have had loan application turned down in the past six months.
Sean Gardner at MoneyExpert said: "The Bank of England has a battle on its hands to restore confidence in the credit markets when lenders react to three rate cuts totalling 0.75 per cent by actually increasing rates.
"The unsecured loans market is almost mirroring the mortgage market where the issue is not so much rates but availability - whether or not lenders will let you have the cash."
However, Mr Gardner added creditworthy customers can still access competitive deals and borrowers should research the market carefully before making an application.
"And you will pay lower rates on average if you borrow more," he added.
"Lenders take the view that those borrowing more are generally a better risk than those borrowing less and offer better deals as a consequence."
The best deals for a loan of £5,000 is with Your Personal Loan, which is only available to homeowners, at 6.9 per cent or Wesleyan Personal Loan at 7.4 per cent and Moneyback Loan at 7.9 per cent.
At £7,500 the most competitive deals include ASDA Personal Loan at 6.9 per cent or Tesco and Moneyback at 7.2 per cent.
These compare with the worst rates on the market of 29.9 per cent on a Citi Financial Loan and others charging 13.4 per cent and 16.9 per cent on £5,000 loans while at £7,500 rates go to between 10.9 per cent and 11.9 per cent at the top end.
news source : http://www.myfinances.co.uk/
The credit crunch is not only making personal unsecured loans more expensive, but also harder to come by as lenders become more picky about who can borrow.
Some 1.38 million people have had loan application turned down in the past six months.
Sean Gardner at MoneyExpert said: "The Bank of England has a battle on its hands to restore confidence in the credit markets when lenders react to three rate cuts totalling 0.75 per cent by actually increasing rates.
"The unsecured loans market is almost mirroring the mortgage market where the issue is not so much rates but availability - whether or not lenders will let you have the cash."
However, Mr Gardner added creditworthy customers can still access competitive deals and borrowers should research the market carefully before making an application.
"And you will pay lower rates on average if you borrow more," he added.
"Lenders take the view that those borrowing more are generally a better risk than those borrowing less and offer better deals as a consequence."
The best deals for a loan of £5,000 is with Your Personal Loan, which is only available to homeowners, at 6.9 per cent or Wesleyan Personal Loan at 7.4 per cent and Moneyback Loan at 7.9 per cent.
At £7,500 the most competitive deals include ASDA Personal Loan at 6.9 per cent or Tesco and Moneyback at 7.2 per cent.
These compare with the worst rates on the market of 29.9 per cent on a Citi Financial Loan and others charging 13.4 per cent and 16.9 per cent on £5,000 loans while at £7,500 rates go to between 10.9 per cent and 11.9 per cent at the top end.
news source : http://www.myfinances.co.uk/
Thursday, May 15, 2008
Cash loan stores too close for comfort
Fearing more cash loans stores could pop up around town, city council considered a proposal Monday evening to restrict the businesses' growth and locations.
The plan would limit the number of stores to one per every 10,000 residents and restrict them from being closer than 1,000 feet apart.
"Restricting pay-day lending would undermine the principles of freedom of choice which is at the foundation of our country," said Hugh Utterback, who owns two Capital Cash Advance stores in the area. "Who will help people who find themselves short on cash if pay-day lenders are not there to provide short-term loans?"
Several residents who had taken loans spoke out in favor of the proposal.
"Having suffered through having to repay, I think $15 on a $100 (loan) is highway robbery," said C.J. Rains of Cuyahoga Falls.
Council members did not vote on the issue but could the next time they meet.
Still, Utterback hopes they consider the customers who benefit from the cash loans before making a blanket decision.
"The PayDay loan industry would not exist if people did not use and want it," he said.
news source : http://www.wkyc.com/
The plan would limit the number of stores to one per every 10,000 residents and restrict them from being closer than 1,000 feet apart.
"Restricting pay-day lending would undermine the principles of freedom of choice which is at the foundation of our country," said Hugh Utterback, who owns two Capital Cash Advance stores in the area. "Who will help people who find themselves short on cash if pay-day lenders are not there to provide short-term loans?"
Several residents who had taken loans spoke out in favor of the proposal.
"Having suffered through having to repay, I think $15 on a $100 (loan) is highway robbery," said C.J. Rains of Cuyahoga Falls.
Council members did not vote on the issue but could the next time they meet.
Still, Utterback hopes they consider the customers who benefit from the cash loans before making a blanket decision.
"The PayDay loan industry would not exist if people did not use and want it," he said.
news source : http://www.wkyc.com/
Wednesday, May 7, 2008
Cash Loans Available For Lawsuits
In a world where legal action and lawsuits abound, there is cash relief for victims of car accidents, personal injury, workers compensation, etc. in the form of a cash loan against their pending lawsuit.
A cash loan offers plaintiffs a way to finance their day to day living expenses with cash they will eventually claim against the outcome of their settlement. Many times those injured in accidents are the sole breadwinners. When their health and mobility is compromised, they’re unable to pay their bills.
Their options are limited: they could borrow from the bank, but the bank expects a monthly payment on a cash loan; they could max our their credit cards, but still, a check needs to be sent every four weeks to cover the costs; they could get a cash loan from friends and family, but that has the capacity to strain long-formed relationships. When there is no money to make monthly payments, plaintiff’s lapse into a crisis situation where a cash loan is essential!
When a cash loan is needed, help is available. By taking a cash loan against their pending lawsuit, plaintiffs can ease the strain of financial burden and not be out of pocket with money they don’t yet have! Best of all, the cash loan is non-recourse. If the plaintiff doesn’t win their lawsuit, they don’t have to pay anything back.
For most plaintiffs, a cash loan has saved them from losing their homes, helped them pay their medical bills, and kept them out of bankruptcy. A cash loan against one’s lawsuit is a little known service and plaintiffs need to understand that there’s a place to turn in their time of need.
News Source : http://www.skynewswire.com/
A cash loan offers plaintiffs a way to finance their day to day living expenses with cash they will eventually claim against the outcome of their settlement. Many times those injured in accidents are the sole breadwinners. When their health and mobility is compromised, they’re unable to pay their bills.
Their options are limited: they could borrow from the bank, but the bank expects a monthly payment on a cash loan; they could max our their credit cards, but still, a check needs to be sent every four weeks to cover the costs; they could get a cash loan from friends and family, but that has the capacity to strain long-formed relationships. When there is no money to make monthly payments, plaintiff’s lapse into a crisis situation where a cash loan is essential!
When a cash loan is needed, help is available. By taking a cash loan against their pending lawsuit, plaintiffs can ease the strain of financial burden and not be out of pocket with money they don’t yet have! Best of all, the cash loan is non-recourse. If the plaintiff doesn’t win their lawsuit, they don’t have to pay anything back.
For most plaintiffs, a cash loan has saved them from losing their homes, helped them pay their medical bills, and kept them out of bankruptcy. A cash loan against one’s lawsuit is a little known service and plaintiffs need to understand that there’s a place to turn in their time of need.
News Source : http://www.skynewswire.com/
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