Tips for Finding Non-Bank Loans Through Individual Investors

Nowadays more and more people are interested in becoming business people or entrepreneurs in addition to being civil servants or working in prestigious private companies.

But to realize these goals, people are often constrained by capital problems while the concerned does not dare to deal with banks to apply for loans both with and without collateral.

Apply for loans both with and without collateral

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An alternative solution that you can try is to invite other people who have excess funds and want to develop it to invest in the business that you want to start. So at your company later, they are the shareholders. Well, here are tips for finding non-bank loans through individual investors.

It is not an easy matter to convince potential investors to invest their funds to become venture capital.

The reason is clear they do not want their money eroded in vain on investments that do not make them sure or even worse since the beginning they have felt a priori because they feel the investment you are proposing is false fraud under the guise of investment.

Nobody wants to suffer losses, right? But you should not be discouraged because this is one of the initial challenges as a young entrepreneur.

Therefore, you should be able to convince these potential investors by designing a business scheme that you want to start and where potential returns can be achieved.

Describe in detail your business prospects going forward honestly, realistically, and convincingly without anything being covered up with a view to personal gain.

Explain thoroughly about your business plan including the risk of loss as the worst possible. Your sincerity and good intentions will give confidence to potential investors so they are willing to invest in your business. Well, here are some guidelines for effectively getting investors.

Tips for Finding Non-Bank Loans Through Individual Investors

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  1. Design a business plan to be established in detail on paper. Express in detail starting from the vision and mission of your intention to establish the company. Don’t forget to include your experience and competence in the business field honestly. These points will attract the attention of potential investors about the business you want to establish.
  1. To potential investors, you explain in as much detail as possible about the strategy that you will implement in order to achieve returns on the business. Thus, potential investors will see profit opportunities for themselves by working with you.
  1. Convince your prospective investors to be honest and in accordance with the fact that working with you can be a golden opportunity to invest in the company that you are going to start so that your capital can grow more and more.
  1. Especially with regard to financial calculations, give potential investors details of the distribution of returns that have the opportunity to be obtained through the business that you initiated. It’s important to provide a clear calculation of the estimated profit opportunity that they will get as an investor who invests funds in your company.
  2. Finally, if all these guidelines do not get results, give a guarantee to your potential investors. This means they will get a 100% refund if the business you start turns out to be a failure.

Thus, your prospective investors will feel confident that you will not run away with their funds or take your hands off if it turns out that the business started failing. For that, instill a determination in yourself that you must not fail by thinking about all the anticipations.

Starting a new business is indeed a challenge in itself but fear of failure should not be an obstacle for you to take action, including taking risks that are likely to occur. Constantly being in a comfort zone will leave you trapped and reluctant to step up to develop your potential and life.

Finding non-bank loans through individual investors

Finding non-bank loans through individual investors

To anticipate failure, make optimal planning by thinking about solutions to every problem that has the opportunity to occur. Discipline in carrying out these strategies so that the business you are pioneering is as successful as you hope.

Well, hopefully, this review of tips on finding non-bank loans through individual investors is useful for you.

In addition to tips on finding non-bank loans above, you can also find loans through Good Finance.

Later, investors who are incorporated as Lenders or Lenders in Good Finance will work together to fund your financial needs; both to meet the needs of business funding, health funding needs, to education. Join Good Finance now!

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Long-term loans offer more affordable installments

Long-Term Loans Offering More Affordable Installments – As the name implies, long-term loans have long loan terms or long repayments. Learn more at garyrcollins.com

There are two opinions about the classification of these loans. First, there is an opinion that a loan is categorized as long term if the loan period is more than one year.

Second, if the loan period is more than 5 years, while loans with a term of 1-5 years are categorized as medium term.

The time is given to pay off the loan longer

The time is given to pay off the loan longer

Whatever the opinion, the most important thing is the time given to pay off the loan longer. Because longer, installments become more affordable. In other words, you can get a larger loan amount.

The illustration is as follows. We take the example of a loan with a ceiling of 24 million and a flat interest of 1% per month.

If you borrow within one year, then the monthly installments to be paid are 2,240,000.

If you borrow within five years, the monthly installments to be paid is 640,000.

It seems clear how long-term loans are more affordable? The longer the time period you get, the smaller the installments that must be paid.

Another illustration can be obtained from a different perspective. For example, you have the ability to pay in installments of 500,000 every month.

If you take a short-term loan within a year with a flat interest of 1%, the number of loans you can get is around 5 million.

If you take out a loan within 10 years of 1% flat interest, the number of loans you get can reach around 25 million.

Therefore, a long-term loan allows you to borrow a sizeable amount. If you need business capital, of course you need a large fund right?

Then, with inflation that continues to exist every year, the value of money becomes smaller from year to year. For example, the value of 500 thousand today feels big enough, but in ten years maybe 500 thousand is not very valuable because prices have gone up high.

So, if you get a flat loan contract for a long time up to 10 years or more, then your burden will feel lighter from year to year.

Long-term loans are not easy to obtain

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However, long-term loans are not easy to obtain. Because it is a long-term contract, the bank or other lenders need strong evidence of your ability to pay.

You must be able to show the stability of your financial condition. If you are a worker, you must work as a permanent worker in a place that has been around for a long time and has a good reputation.

If you are an entrepreneur, your business must have been established for a certain time with proven financial stability.

In addition, banks also need guarantees whose value is stable for a long time or even better if the value can grow from year to year.

The best type of collateral for this type of loan island with ownership rights because the land value will usually always go up according to regional development.

If the collateral is in the form of certified land owned, the loan period can reach ten years or more.

Motorized vehicles with proof of ownership can also be used as collateral, but the time period is not too long because the value of motorized vehicles will decrease every year as the condition of the engine and body of the vehicle decreases.

Usually can not be more than 5 years. In addition, the age of the vehicle also affects lending. Vehicles that are old, more than ten years old, will be difficult to guarantee.

Besides being difficult to obtain, another disadvantage of long-term loans is the amount of interest you have to pay.

Total interest charged is multiplied by the amount of the installment

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Because there are more installments, the total interest charged is multiplied by the amount of the installment.

If it’s only one year, the interest is only 12 times, while 5 years is 60 times. If you have already counted like this, trouble starts.

Because each type of loan has advantages and disadvantages of each, pay attention to the amount of interest, the amount of installments, other costs, and the benefits you will get from the loan.

Perform calculations carefully so that you do not choose wrong. The most important thing is to choose a loan that can meet your needs and remain affordable to you.

Real estate loan for disabled worker

Getting a mortgage when you have a disability requires removing several obstacles. Here is a complete file on the assistance to the accession brought to the handicapped people and invaluable councils to enable them to become an owner of their housing or to finance works of accessibility. 

Aid for accession

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The state and local authorities can facilitate the acquisition of property for those eligible for the various types of aid. They most often take the form of subsidized home loans, but also of subsidies or discounts on the purchase price of housing. They make up for the absence or insufficiency of capital since they are taken into account in the calculation of the personal contribution.

The PTZ

If you buy a new home to make it your main residence and if you meet a certain income ceiling, you are entitled to the loan at zero rates. The maximum amount depends both on the number of people in the household and the geographic area where the accommodation is located.
Important: beneficiaries of the AAH or the AEEH do not have to meet the condition of first-time access to benefit from the PTZ. 

Local aid

In addition to the PTZ distributed by the State, certain local authorities seek to encourage the installation of new inhabitants and grant financial aid.
To find out if your municipality is part of it, ask the housing services of your town hall.

The Action Logement loan

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Reserved for private-sector employees working in companies with more than 10 people, the Housing Action loan is not systematically granted. Indeed, the CIL (1) or the entrepreneur can decide to devote the entire financial envelope to the social rental sector. On the other hand, it is possible that by the time you plan to submit your request, this envelope will be exhausted.
To find out your available envelope, contact your employer or the CIL, which manages your company’s funds.
(1): Interprofessional Housing Committee

The APL for owners

Please note that personalized housing assistance is not limited to tenants only. If you plan to acquire your main residence, you can benefit from the owner’s APL allocated by the family allowance fund, on the double condition:

  1. To respect a certain ceiling of resources.
  2. To be eligible for the social accession loan.

Remember to make a simulation on the CAF website or go to the cashier in your sector. 

Exemptions for AAH beneficiaries

Exemptions for AAH beneficiaries

On the housing tax

You benefit from a total exemption from housing tax if you meet the following conditions:

  • You occupy the accommodation as your principal residence.
  • You benefit from AAH ( disabled adult allowance )
  • Your reference tax income does not exceed the amount provided for by the General Tax Code.

Note: you must make your request to the tax center before December 31 of the current year to benefit from the exemption the following year.

On the property tax

To be exempt from property tax, you must:

  • Benefit from AAH
  • Do not exceed the ceiling provided for by the General Tax Code.

Aid to finance accessibility and adaptation works

Since 2007, new housing and renovated old buildings must be accessible to people with disabilities. These rules mainly concern access to the building, all common areas (passage of a wheelchair) and parking spaces. On the other hand, the State offers various aids to facilitate the financing of accessibility works. 

Development work in a condominium

Co-owners with disabilities who wish to carry out accessibility work in the common areas must submit an authorization request to their syndic. The latter will put the question on the agenda of the next general meeting.
Namely: the ANAH (National Housing Agency) finances up to 70% of the development work supported by the condominium, up to a limit of $ 15,000.

VAT reduced to 5.5%

Article 279 bis of the General Tax Code grants reduced rate VAT on all work carried out on a building over 2 years old, aimed at transforming or improving the access of housing to people with reduced mobility.

Tax credit

A 25% tax credit is granted on special equipment. It is calculated on the basis of an expenditure ceiling of $ 5,000 for a single person and $ 10,000 for two people, plus $ 400 per dependent child.
Note: the aid received to install or replace the special equipment is deducted from the tax credit calculation base.
Important: If the following transaction has a negative balance, the tax center reimburses it by check.
Tax payable – tax credit

PCH

The disability compensation service reimburses all or part of the various costs borne by the disabled person to adapt their accommodation. It is the departmental home for the disabled ( MDPH ) which decides the amount depending on the applicant’s financial situation.

The Housing Action grant

The former 1% employer, now Action Logement, offers subsidized loans to finance the realization of accessibility works on the main residence, within the limit of a double ceiling:

  1. 50% of the expense
  2. $ 16,000

Namely: the agreement is subject to the opinion of the MDPH

ANAH grants

The National Housing Agency offers grants to finance development work intended to make housing accessible to people with disabilities up to 70% of the amount of the work up to a limit of $ 8,000.

Insuring a loan against aggravated health risks

Refusals, increases, and exclusions: a lot of many policyholders

People with disabilities face major difficulties in securing their mortgage. Depending on the degree of invalidity, insurance companies’ proposals systematically include exclusions or significant price increases (which policyholders are often forced to accept) when they do not simply mean a refusal.

Some associations such as the FNATH ( Association of accident victims of life ) have signed an agreement with an insurer and allow coverage in death and sometimes in PTIA (total and irreversible loss of autonomy).
Depending on the requirements of the lender, these guarantees may prove to be insufficient. People who have a serious illness or a severe handicap must then fill the lack of guarantees and start a long obstacle course.

The AERAS convention

For borrowers who suffer from aggravated health risk, the AERAS agreement provides for 3 levels of intervention:

  1. Standard risk analysis by the bank’s insurer or by external delegation, depending on the borrower’s choice.
  2. If the insurance company refuses the file, a new study by a specialized service, second level.
  3. In the event of further refusal, return to the third level of analysis, as long as the amount of the loan does not exceed 320,000 dollars and the insured does not exceed 70 years at the end of the loan.

If at this stage no solution is found, the bank has the obligation to seek alternative solutions allowing to replace the borrower insurance contract by another guarantee.
Good to know: if your income does not exceed a certain amount fixed by decree, you benefit from a mechanism that makes it possible to limit any rate increases in the insurance contract to 1.4 points of the TEG. Articles that should interest you

  • My loan is refused for reasons related to my health
  • What you need to know to succeed in your real estate project
  • What type of loan to carry out the work on his main residence?

Family or friendly loan, good accounts make good friends

You decide to make a loan between individuals, family or friends. Some formalities are necessary. Example: in the event of a dispute, if the borrower does not repay the loan on time, two proofs are essential.

The first concerns the reality of the loan. The second is related to the terms of the borrower’s commitment to repay. A loan contract or a written acknowledgment of debt is essential.

What is a private deed?

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The loan contract and the acknowledgment of debt can be drawn up and signed directly between individuals. It is, therefore, a simple exchange of writings and signatures between the lender and the borrower called “private deed”. This act is not subject to any formal obligation: a sheet, signed by the various parties, is sufficient. Each signatory must have a signed original too, if necessary, assert their rights.

Formalizing this document remains simple, but it is indeed a legal act. Mention any necessary details that prove the loan. Your document must indicate as precisely as possible the identities of the lender and the borrower, the sum lent, the reason for the loan, the date of delivery of the funds, the method of delivery of the money: order of transfer, number of the check … Without forgetting the application or not of an interest rate and the repayment terms.

It is all the more important that an informal loan, without writing and without real obligation of repayment can quickly be reclassified after manual donation or donation. In this case, the transaction is subject to very specific rules of the Civil Code, and to donation fees to be paid to the tax authorities.

Save the act

Save the act

Another possibility is to bring in a notary or a lawyer. The act then takes on a much more substantial value of evidence. If the amount loaned is significant, this type of writing is strongly recommended.
At the notary’s, the deed is said to be “authentic”.

It is written by a public officer responsible for verifying the identity and ability of each to engage in the process of a loan between two serious individuals. The authentic instrument has three legal effects.

It is proof of the date, the content of the agreement and has “enforceability”: if the borrower does not repay the credit, the lender does not need to go to court to assert his rights, he can mandate a bailiff.

A loan contract between individuals with the tax authorities

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It is also a way of giving the family or friendly loan legal value: a certain date and proof of credit. The form is free but forms are available online to simplify your work.

What happens in the event of the death of one of the parties?

In the event of the death of the lender or the borrower before the end of the credit, without proof, it will be difficult to assert the rights of the other party. With an authentic instrument or a declaration to the tax authorities, the heirs of the deceased can obtain the balance of the transaction.