Avail Ready Finance For Business Through Quick Commercial Loans

Business people always require finance either for starting a new venture or for expanding the older one. The finance must come to them easy and quick. Considering their urgent requirements, loan product quick commercial loans has been specifically designed. Business people can utilize quick commercial loans for making investments in infrastructure, buying products and services, starting new project or expanding the established one.

Business people are required to furnish some details of their business before the quick commercial loans deal takes place. They are supposed to give audited financial statement of last 3 years in case of starting a new business. For expanding the business, lenders may ask business financial statements, balance and profit-loss statements. Lenders would like details of owners, partners and stockholders of the business as well.

Business persons can avail quick commercial loans either in secured or unsecured form. To take secured quick commercial loans, also called commercial mortgages, borrowers should place commercial property with the lender as collateral. With the loan secured, lenders provide business people quick commercial loans anywhere in the range of £50,000 to £50,000,000. Larger loan will depend on the higher equity in the collateral.

Because of the secured nature of the loan, interest rate remains lower on quick commercial loans which infect can be brought down once the borrower compares different loan packages. The interest rate comes in variable and fixed options. Under fixed rate, interest rate and monthly installments amount are predetermined and borrowers know how much they have to pay and thus they can plan the loan. The interest rate in variable option can change any time according to the market and borrower may be paying higher rate if it goes up.

There is a larger and comfortable repayment period of 12 to 25 years to the borrowers in case of secured quick commercial loans. The loan amount and repayment duration, however, should be chosen carefully keeping one’s financial capacity in mind.

For availing unsecured quick commercial loans, borrowers should produce concrete proof of their repayment capacity and business profile. Credit score of these borrowers counts a lot in settling the loan deal.

Even if you are labeled as bad credit, availing quick commercial loans should be no problem provided you have a plan of loan repayment laid down before the lender to win his confidence. Make efforts to take your credit score closure to acceptable level of 720 in FICCO scale which ranges from 300 to 850. A credit score of 580 and below is considered as bad credit. Have your credit report checked and make it error free and also pay off your easy debts to show improvements in credit score.

Apply for quick commercial loans online as this way, out of numerous loan offers; you can pick up the one having lower interest rate.

Quick commercial loans become an instrument of sound financial health for business people if a lot of thought goes into availing it. Be particular in paying monthly installments at due date

Serving the Rural Community with Affordable Financial Services

In every society, access to financial services for every citizen is a vital part of sustained economic development. More emphasis should be given to the roots of society: the rural sectors and working-class. But most of the time, it is very hard to identify financial institutions that provide these needed services, which could improve the livelihoods and reduce risk. Most commercial financial institutions do not provide the proper services needed to support these sectors, as it is not viable to provide cheap services to these communities. They are also unable to provide their services directly to the target group because of high transaction costs coupled with small transaction size and the higher perceived risk of financing clients without collateral.

Therefore, may countries today use alternative approaches instead. The goal is to bring all people into the country’s financial system so that they will have continuous and permanent access to affordable financial services.

There are several categories of financial providers

1) Formal Financial Institution: Professional entities such as licensed banks.
Problems: The small profits that can be earned may not compensate for the significant cost and effort involved in tailoring products and delivery systems, especially low-income people. Nevertheless, banks interested in this niche have successfully created a separate unit within the bank, or established a separate affiliated company before.

2) Informal Providers: Small member-managed entities that are not licensed.

3) Semi-Formal Institutions: NGO, small financial cooperatives, and community-based financial organizations

a) Cooperative Financial Institutions (Cooperative banks, credit unions to small village based cooperative entities)

b) Microfinance Non-Governmental Organizations

c) Community Based Financial Organizations (village savings, loan associations, savings and credit associations, self-help groups)

d) Traditional village-based providers (money lenders, small shops and input suppliers who provide goods on credit, and informal savings and credit groups)

The formal financial institutions approach focuses on building strong, stable financial systems that serve the entire population. This is the preferred approach when there are Labor banks, microfinance institutions, and financial cooperative/ credit union networks that are interested in broadening their outreach to the low-income society. The community-based institutions approach focuses on building strong informal or semi-formal community financial institutions, and then linking them with the formal financial sector.

The Purpose of Microfinance:

Microfinance is the provision of financial services, including savings, credit, insurance and payment services, to low income people. Typically, low-income people, especially those living in rural areas, have been unable to obtain quality services at a reasonable price from the formal financial sector. Microfinance is best supported through financial sector programs, however, in many countries where social funds operate there are no financial sector programs with a strong emphasis on access to finance issues, nor are there many viable microfinance institutions.

The Purpose of Social Funds:

Social funds are demand-driven mechanisms that channel resources to the poor and support subprojects that respond directly to the priority needs of the low-income population. They have been used in a growing number of countries to alleviate the social and economic effects of economic crises, cushion the impact of adjustment programs, generate short-term employment, and finance small-scale investments in poor communities. Access to micro-credit is not sufficient, the poor also need access to savings, insurance and payment services. Several wide-scale studies have been conducted on identifying lessons, best practices, and potential pitfalls; they include Panama, Yemen, and Eritrea.

Example Bosnia and Herzegovin:

The overall aim was to jumpstart the process of establishing a strong microfinance sector so as to help raise incomes, create jobs, and develop the smallest businesses. To provide access to credit to the economically disadvantaged, specifically low-income micro-entrepreneurs who had no access to credit from the commercial banking sector.

Problems in the past:

Government policy is oriented more towards creating employment and improving income in response to a crisis than toward long-term objectives. As such, social fund activities were not geared towards strengthening or reforming the microfinance sector, but rather towards using existing microfinance programs as channels for expanding employment. Further problems range from governments and donors using these organizations to channel cheap credit to rural populations to mismanagement of funds.

The Purpose of Credit Unions:

A credit union is a community based financial institution with representation from all socioeconomic levels. Main purposes are the economic, social, and political promotion of democracy and securing of financial stability, and to provide competitive and quality financial services responsive to the needs of its members to improve their livelihood. All credit unions operate within a common bond, such as employment- all members must work for the same group of employers or industry or in the same occupation. Credit unions are for service rather than for profits.

What is the right approach?

Consulting with communities to identify the demand for and supply of financial services among the working-class and rural areas to be covered. What financial services are provided, by whom, and how? What are the gaps in coverage, in terms of types of customers served, types of services provided, and geographical reach? Consider ownership structure, governance and management structure, financial products, customer base, ability to cover costs and existing relationships with professional financial services intermediaries