Financial policy of powers - business, Medicaid, tax, real estate, personal property

What if I already have a power of attorney? How will the financial directive help me still? A boilerplate power of attorney is intended to give your agent general powers. A Financial Directive has very specific powers granted by the Principal (you) to the Agent, as for example but NOT all inclusive:

1. Collection powers to forgive, request, demand, sue for, recover, collect, receive, hold all such sums of money debts, dues, commercial paper, checks, drafts, accounts, deposits, legacies, bequests, devises, notes, interests, stock certificates, bonds, dividends, certificates of deposit, annuities, pension, profit sharing, retirement, social security, insurance and other contractual benefits and proceeds, all documents of title, all property, real or personal, intangible or tangible property and property rights, and demands whatsoever, liquidated or unliquidated, now or hereafter owned by, or due, owing, payable or belonging to, you or in which you have or may thereafter acquire an interest.

2. Real Property Powers to bargain, contract, agree for, option, purchase, acquire, receive, improve, maintain, repair, insure, plat, partition, safeguard, lease, demise, grant, bargain, sell, assign, transfer, remise, release, exchange, convey, mortgage and hypothecate real estate and any interest in it (and including any interest which you hold with any other person as joint tenants with full rights of survivorship, or as tenants by the entireties), lands, tenements and hereditaments, for such price, upon such terms and conditions, as your Agent shall determine. You can add more specific powers addressing potential circumstances more specific to your circumstance.

3. Personal Property Powers to bargain, contract, agree for, purchase, option, acquire, receive, improve, maintain, repair, insure, safeguard, lease, assign, sell, exchange, redeem, transfer, mortgage, hypothecate and in any and every way and manner deal in and with goods, wares, merchandise, furniture and furnishings, automobiles, bills, notes, debentures, bonds, stocks, limited partnership interests, certificates of deposit, commercial paper, money market instruments, and other securities, chooses in action and other tangible or intangible personal property in possession or in action, for such price, upon such terms and conditions, as your Agent shall determine...and more specifically to your circumstance.

4. Banking Powers to make, draw, sign in your name, deliver and accept checks, drafts, receipts for moneys, notes, or other orders for the payment of money against, or otherwise make withdrawals from any commercial, checking or savings account which you may have in your sole name or in joint name with your spouse or other person(s), in any bank or financial institution, for any purpose which your Agent may think necessary, advisable or proper; and to endorse and negotiate in your name and deliver checks, drafts, notes, bills, certificates of deposit, commercial paper, money market instruments, bills of exchange or other instruments for the payment of money and to deposit same, as cash or for collection, and cash into any commercial, checking or savings account which you may have in your sole name or in joint name with your spouse or other person(s), in any bank or financial institution and to carry on all your ordinary banking business. Specifically, you, the Principal empower your Agent to do all of the following:

A. Continue, modify, and terminate an account or other banking arrangement made by or on behalf of the Principal.

B. Establish, modify, and terminate an account or other banking arrangement with a bank, trust company, savings and loan association, credit union, thrift company, industrial loan company, brokerage firm, or other financial institution selected by the Agent.

C. Hire or close a safe deposit box or space in a vault.

D. Contract to procure other services available from a financial institution as the Agent considers desirable.

E. Withdraw by check, order, or otherwise money or property of the Principal deposited with or left in the custody of a financial institution.

F. Receive bank statements, vouchers, notices, and similar documents from a financial institution and act with respect to them.

G. To have access to any safe deposit box of which you are a tenant or co-tenant with full power to withdraw or change from time to time the contents of it; and to exchange or surrender the box and keys to it, renew any rental contract for it, and to do all things which any depository, association or bank or its agents may require, releasing the lessor from all liability in connection with it.

H. Borrow money at an interest rate agreeable to the Agent and pledge as security personal property of the Principal necessary in order to borrow, pay, renew, or extend the time of payment of a debt of the Principal.

I. Make, assign, draw, endorse, discount, guarantee, and negotiate promissory notes, checks, drafts, and other negotiable or nonnegotiable paper of the Principal, or payable to the Principal or the Principal's order, receive the cash or other proceeds of those transactions, and accept a draft drawn by a person upon the Principal and pay it when due.

J. Receive for the Principal and act upon a sight draft, warehouse receipt, or other negotiable or nonnegotiable instrument.

K. Apply for and receive letters of credit, credit cards, and traveler's checks from a financial institution, and give an indemnity or other agreement in connection with letters of credit.

5. Tax Returns. To prepare, execute and file tax reports, tax returns, tax declaration, tax forms and tax statements for any and all tax purposes including income, gift, real estate, personal property, intangibles tax, single business tax, or any other kind of tax whatsoever, to pay such taxes and any interest or penalty or additions to make and file objections, protests, claims for abatement, refund or credit in relation to any such tax proposed, levied or paid; to signify, as may be required by the 1986 United States Internal Revenue Code, as amended, or any corresponding future United States law, your consent to having one-half of any gift(s) made by your spouse considered as made by you to represent you and to institute and prosecute proceedings in court or before any administrative authority to contest any such tax in whole or in part or for recovery of any amount paid in respect of any such tax, to defend or settle any amount paid in respect of any such tax, to give full and final receipt for any refund or credit and to endorse and collect any check or other voucher; to pay any and all such taxes and any interest, penalty or other additional amounts; to employ attorneys, accountants or other representatives and grant powers of attorney or letters of appointment for any of the purposes stated...(omitted for this article)

6. Personal and Family Maintenance. Principal empowers the Agent to do all the acts necessary to maintain the customary standard of living of the Principal, the Principal's spouse, Principal's intimate partner, domestic partner, children, and other individuals customarily or legally entitled to be supported by the Principal, including providing living quarters by purchase, lease, or other contract, or paying the operating costs, including interest, amortization payments, repairs, and taxes on premises owned by the Principal and occupied by those individuals.

7. Business Interests. To continue to conduct or participate in any business in which you may be engaged, or to carry out, modify or amend any agreement to which you may be a party, and to sell, exchange, modify or terminate such interest to or with such person or persons as your Agent may deem proper and on such terms and with such security as your Agent may deem appropriate. Execute partnership agreements, and amendments. Incorporate, reorganize, merge, consolidate, recapitulate, sell, liquidate or dissolve any business. Elect or employ officers, directors and Agents to carry out the provisions of any agreement for the sale of any business interest or the stock in it. And more specifically the Principal empowers the Agent to do all of the following: ...(omitted for this article)

8. Social Security and Government Benefits Medicare, Medicaid, or other Governmental Programs, or Civil or Military Service, to prosecute, defend, submit to arbitration, settle, and propose or accept a compromise with respect to any benefits the Principal may be entitled to receive. Receive the financial proceeds of a claim of the type described in this section, conserve, invest, disburse, or use anything received for a lawful purpose. To make application to any governmental agency for any benefit or government obligation to which you may be entitled. To endorse any checks or drafts made payable to you from any government agency for your benefit, including any Social Security checks.

9. And so on, and so on, and so on. For purposes of this article, this writer's intention is to demonstrate the level of specificity customized to your specific needs.

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Discover the top 15 Secrets of successful commercial property ownership!

1.) What's Your Type?

There are many different types of commercial properties that you can purchase including:

o Office
o Retail Space
o Warehouse Facility
o Restaurant
o Commercial Condo
o Strip Mall

The first step is clearly defining what type of property you want to purchase and how you want to use it. The following information will help you maximize your investment dollars to get the best possible deal when purchasing your property.

2. Build Equity With Your Investment

Equity is Money

Building equity is the primary if not the ultimate reason to buy instead of rent a commercial property. Let's face it. It's money in the bank. In fact, it's better than money in the bank because you can't get the same kind of return on your money when it's sitting in the bank as opposed to when you're building equity. Moreover, if you choose the right financing for your commercial real estate purchase, you can not only build equity through ownership, but you can also leverage your capital saving in order to grow your business, hire additional employees, or even purchase an additional location when the time comes.

Owning beats renting because you can sell your investment once you outgrow the space or sell the business. Even if commercial property in your area has not appreciated (which is unlikely), you can recoup your investment by renting out the space once you move out and by selling when the time is right.

If you plan on growing into your building, buy something larger than your current needs, and rent out the extra space until you need it for expansion. This will provide you with steady income that you can use to help pay your mortgage or invest in your business.

3. Calculate Your Savings And Your Potential Profit

Lower Monthly Payments

Consider buying commercial real estate as a savings for your business. Real estate costs are the third largest business expense, behind payroll and taxes. Long loan amortizations mean that your monthly payments could wind up being less than what you would pay for rent, since landlords usually charge more than their monthly loan payment. In other words, owning your own commercial property may actually be more affordable, depending on current market conditions.

Ask your lender to provide you with an analysis of the current market in your area so that you can see which scenario is best for you (renting or buying). The lender should be able to explain your options in detail with examples of monthly rental costs vs. monthly loan payments and the benefits of each.

Analyze the Rent Value

Upon finding a property that peaks your interest, find out the status of the current tenants (if it is a multi-tenant property) in terms of how much rent they are paying. Check the current market to see if the rents are undervalued, meaning below what you can get in the current market. Your realtor or lender should be able to help you figure out how much you could charge for rent and determine how much of a profit you can make each month.

Tax Advantages

There are many tax advantages to becoming an owner of a commercial property. In most cases, you can deduct part of the value of the building at tax time, as well as improvements you've made as depreciation, which can save you more money on your taxes. Buying the property under your business or corporation's name is also a better tax strategy than under your personal name.

4. Do Your Research

The more you can learn about property types and options, mortgages, financing, zoning and remodeling; the better position you'll be in to make wise decisions concerning the acquisition of a commercial property.

However, you don't have to know everything. That's where putting together a powerful team of professionals proficient in their areas of expertise may be your most important step. Building a team of advisors - people you can trust to steer you in the right direction is critical to your success.

Understand Current Market Conditions

Keep your eyes open for news articles pertaining to the commercial real estate market. Is it "hot" right now? Is it a buyers' or sellers' market? What kinds of interest rates are available?

The Internet is a great place to start. Conducting a Google search for "commercial real estate market," for instance, will give you results that include news and resources for national trends, analytics and market research.

In addition, many realtors, lenders and lawyers across the country offer free and timely articles on their websites that shed light on current commercial real estate trends nationwide. Again, make sure you listen to both sides of the story.

Tap Expert Resources

National market research companies can give you specific information about the area where you're preparing to locate your business. You can also find information on demographics including the median age, household income, breakdown of ethnicities, and more from censuses available from the U.S. Census Bureau.

Also contact commercial lenders or realtors for additional resources. In looking for help, it's usually better to talk to a lender or realtor with nationwide experience and up-to-date information than a small-time operation that might not have recent data for you. If the lender/realtor hasn't gotten updated demographics since 1996, you've essentially wasted your time. Also, a lender or realtor that specializes in the type of property you're looking for will be more likely to have the specific information you need, which will save you time in research.

Study the Current Vacancy Rate

Research what the vacancy rate has been over the past few years for the area you're taking into consideration. If there seem to be high levels of vacancies, try to find why. Is it a bad neighborhood? Talk to store owners in the immediate area and find out how long they've been doing business there. Ask if they have any concerns that you as a potential property owner should know about the area.

Research Commercial Realtors

It's important to research commercial realtors that specialize in the type of space you're looking for. Grill the realtor you are considering selecting on the entire purchase process so you know what to expect. Ask how long the process usually takes so that there are no surprises. Check their references and their track record (more on finding a Commercial Realtor in #5).

Examine Experienced Commercial Lenders

Choosing a lender and financing program is just as important as choosing the property. Again, find out the entire process of financing, as well as your different options. Don't assume that just because you've had a relationship with your bank for years that using their financing is the best choice.

Banks don't always offer the lowest rate for commercial loans, and sometimes have a far longer turnaround than non-bank lenders. Some banks require that you transfer your accounts to them in order to qualify for a loan. Be aware of any stipulations when seeking a bank for a commercial loan.

5. Choose the Right Commercial Realtor

As mentioned before, you need qualified partners to help you with the process of buying commercial property. Start with a terrific commercial realtor.

Some commercial realtors work exclusively with individuals interested in investment properties. Others work with owners/users of commercial real estate, and among those some specialize in property management, which can be an added value to you.

Who Do You Know?

Referrals from trusted sources are usually the best way to find a good commercial realtor.

Ask Questions

Set up a meeting with more than one potential commercial realtor. Find out as much as you can about their professional background, education, and experience with your type of property. You can ask for a list of recent transactions to give you an idea of what they deal with on a regular basis, and how many properties they've actually sold in the last year or two. And most importantly, ask for client references (testimonials)! Real client feedback is the most effective measure for potential success.

The Right Match

Make sure you choose a realtor that understands your specific needs. If you are a small business, you don't want to work with a realtor that normally handles multi-million dollar deals. Your project may become less of a priority when that particular realtor gets a bigger commission to worry about.

6. Consider Your Time Frame

If the reason you are looking for commercial property is because your lease is ending, think twice before jumping into a decision you might regret. Finding just the right space, securing financing and going through the process of obtaining a commercial property can take months. If you don't have that kind of time, you may need to rent month-to-month for now.

Take Your Time

While you may be in a hurry to move into a space, take your time. Buying any kind of property is a major decision, and buying commercial property is even more important for the development and growth of your business. Selecting a property in the wrong area, or a space that doesn't allow you to grow can hinder your company and even cause it to fail, so plan carefully.

If the realtor or lender gives you an estimate of three months from start to close, plan for longer - just in case. Keep in mind there are many people involved in the process of buying property, from the seller, realtor, lender, appraiser, surveyor, paperwork approvers, secretaries, and more and this process can often take slightly longer.

7. Location, Location, Location

One of the most important factors in considering commercial property is location. If a property is located on a busy corner that is difficult to get to, your business may not do well (in fact, that's probably why the property is for sale). If you want to operate a dog kennel and the property you're considering is in a residential area, not only will your business disturb the residents, the zoning laws may prevent you from operating there.

Foot Traffic

For a retail business, look for areas with high foot traffic that will give you the exposure and increased walk-ins you need to be successful.

If you are looking for an industrial or manufacturing facility, then you can stay out of the retail limelight and buy something in a warehouse district. These areas are usually cheaper than retail space.

Easy Access

Make sure your location has easy access from the road. Look to see if the site is at a difficult intersection. Is there construction going on that seems like it won't be ending any time soon? On the other hand, what's the potential once the construction is completed?

Check out the Competition

If you want to open a bistro in a neighborhood that has several bistros, you might want to try somewhere else with less competition. However, a healthy population of restaurants usually means a healthy population of customers.

Know Your Customer

Find out the demographics of the area you're interested in. If you want to move your sports apparel shop to a new location, you'll probably want an area with a high percentage of youth and active adults. An urban area with a lot of pedestrian traffic might be better for this kind of retail shop than a suburban area in a retirement community.

8. Free Parking

We've all spent time driving around and around looking for a parking spot. It can be very frustrating, especially when you're running late. Whenever possible, you want a location that has ample parking for your visitors.
If you have a retail store, restaurant, or other high-traffic business, estimate how many customers or visitors you're likely to have at any given time and consider rejecting any properties that have fewer available parking spaces than your estimates. Again, use your best judgment and consult your realtor.

Avoid Headaches

Also pay attention to how your parking is situated. If it's located just off a major road, it may provide a headache for people trying to back out of the parking space, and may even cause accidents. When visiting the property, see how well you can maneuver the parking. If it's a hassle for you, it will be doubly so for a potential customer or visitor.

9. Get in the Zone

Before you begin the negotiation process for a commercial property, make sure to investigate the zoning laws, as well as what types of businesses you are able operate there. There are zoning laws about the type of business that can be conducted in certain spaces.

For instance, some spaces do not permit food and beverage to be served, or may have restrictions on how late a business can operate. The typical zoning districts in most cities include: residential, commercial, industrial and mixed-use.

Don't Assume

Zoning can be tricky, so do your due diligence on this topic. Don't assume that just because the previous tenant of the space had a restaurant that the property you're looking at is necessarily zoned for food and beverage. Many businesses slide under the radar for months or years while violating zoning laws. Making assumptions can cost you big time and big money when it comes to zoning.

Regulations

Zoning laws can regulate not only the type of business that can operate, but also parking, signs, water and air quality, waste management, noise, appearance of building and more. Find out any and all regulations regarding the property in advance.

Visit your local library or zoning office to get information on all the zoning laws, rules and regulations that apply to the property you're considering for purchase. Talk to people at the zoning office if you have concerns or questions prior to making the investment. Ask your realtor to double-check your efforts to ensure you've covered all your bases.

10. Inspection

Normally, if you are considering buying a home, you have an inspector look at the structure, pipes, electrical system, etc. A commercial property requires even more of a stringent inspection, not only to meet your needs, but also the requirements of the local government.

Before purchasing commercial property, hire professionals to thoroughly examine the electrical system, including the sprinkler and security system, as well as the plumbing, phone, and Internet systems. Since you will have already done your homework on zoning and regulations, you will be aware of the building codes. With the results from your various inspections you can get an estimate of how much work, if any, will need to be invested in order to get the building "up to code."

A Good Foundation

Hire an architect or engineer to examine the foundation and structure, especially if you have frequent natural disasters such as earthquakes or hurricanes in your area of the country.

Communication

If you are looking at an older building, there may be quite an investment up front to either meet city standards or meet your own standards. Don't overlook the importance of a high-tech phone and Internet system, especially if you have a lot of employees. If there is not already a T1 or fiber optic network in place, build this cost into your purchase, as it will save you money and headaches in the long term over more traditional (and older) phone and Internet systems.

Make sure to hire an expert to tell you if the changes you need are possible and within your budget. With most commercial real estate loans, you can include these remodeling costs in your financing. Again, make sure to ask.

11. Map Out Your Plan

As a business owner, you understand the importance of carefully planning every move. Buying a property requires no less preparation. Before you begin looking for a building, sit down with your finances and figure out how much of a mortgage you can afford to take on.

Create a Budget

When calculating your budget for buying property, don't leave out taxes, insurance premiums, and repair and maintenance, as well as costs involved in customizing the space to meet your needs. Failing to create a budget for these often overlooked expenses will quickly put you in the hole with your new property. If you need help creating this budget, ask your realtor or your commercial lender for advice.

Room to Grow

To determine the amount of mortgage you can afford, assess your income and expenses. Your mortgage and property expenses should leave you enough room to operate your business without cutting into your normal expenses.

Sometimes it is necessary to take a cut in profit in order to purchase the kind of space you need to grow. Think of it this way: buying a larger space will allow your company to stretch its wings, which will result in more profits down the road. It's a risk you sometimes need to be willing to take if you want to grow. Remember, if you buy more space than your company needs immediately, you can acquire tenants who will provide rental income that can significantly offset your monthly mortgage obligation.

Planning Ahead

It's almost always a good idea to buy slightly more room than you currently need. You can lease out the additional space until you need it. If this is your plan, map out how this will bring in income to help subsidize your mortgage. Remember, however, that you may have periods when some of the space is unoccupied, so don't rely on the rent coming in to cover your mortgage every time. Make sure you can cover the mortgage on your own.

Have an Exit Strategy

So, how does it all end? Hopefully with big dollar signs. After all, that's why you're investing, isn't it? To eventually cash in on your investment. Therefore, you need to have an exit strategy.

You might choose to hold onto your commercial property through retirement, as real estate is a great asset that can provide you with a steady passive income stream: a lucrative retirement strategy.

12. Before You Sign on the Dotted Line

Having a carefully drafted contract is key in your commercial real estate deal. You are required by law to have a written sales contract, and it is to your advantage to have one with each detail of the transaction documented.

Also, make sure to leave ample time for due diligence and closing, especially if any construction is involved!

Details

Despite the stories of real estate contracts being thicker than phone books, all you really need is a contract that lays out the important elements of your agreements. First, it needs to describe the property and the purchase price, as well as whether the price is due at closing or in installments.

Equipment, etc.

The contract should include any equipment, machinery, or personal property that is included in the purchase price. It should list any contingencies that must be met prior to completing the purchase. A common example of a contingency is whether you are able to obtain a loan to finance the purchase.

Don't Forget...

The contract should cover how the property taxes and utility bills will be pro-rated between you and the seller, as well as what type of title insurance you must provide. The date for closing and delivery of possession should be in the document, as well as what legal recourse either the buyer or seller has in the event that the other party defaults on the agreement.

And Always...

Once the contract has been drafted, have a lawyer review it prior to signing it. A lawyer may be able to help you negotiate a better deal than what is originally presented.

Unfortunately, not all property sellers are honest, and some will try to hide their true purpose in technical legalese within a contract. Having a trusted lawyer and commercial realtor review your contract will keep you safe in your transaction.

13. Choose a Lender with Care

There are many types of lenders available to assist you with your commercial real estate financing. But keep in mind: not all are created equal. Do your homework in finding a lender that meets your specific needs.

It's important to find a firm that can give you broad access to capital, understand your priorities, offer you the best deal on your loan and complete the process in a timely manner.

Types of Lenders

There are three basic categories of lenders: direct lenders, indirect lenders and hybrid lenders. Direct lenders lend their own funds. Some examples of direct lenders include commercial real estate lending institutions, banks, and private lenders. Indirect lenders place funds on behalf of others, and include mortgage brokers and mortgage bankers, as well as financial intermediaries. Hybrid lenders both lend their own funds and lend on behalf of others, and include certain investment banks, investment advisors and credit companies.

Banks usually generalize in services, and offer a wide array of products. While this may sound good, think about it for a moment. Would you rather have a lender that knows a little about many financing options, or a lot about three or four products designed specifically for you?

Lending institutions are more specific in nature, and are experts in the products they offer. Banks are more traditional in their financing products, while lending institutions are more entrepreneurial and creative.

Banks often require that you move all of your financial relationships under their umbrella, including deposits, LOCs, etc., while non-bank lenders only work with your real estate loan.

The U.S. Small Business Administration (SBA) is a great resource for small companies looking to expand their business or purchase real estate for commercial use. The SBA offers tools that can help you plan your next move, as well as loan programs for a variety of business purposes. The SBA itself does not offer loans, but works through banks and non-bank lenders to provide small businesses with loan programs that meet their needs.

Get Started Early

It is important to choose your lender early in the process so that you can maximize leverage and get a lower cost of funds. Your lender will ask for certain forms in order to determine your eligibility for financing, as well as to figure out what kind of deal you can negotiate.

You will need to provide your income and expense statement, balance sheet and personal financial statements from all prospective owners of the property. If you don't have them written already, you will need to create profiles of the management team, including information on education and employment background, as well as experience relevant to your business. Other documents needed include a property appraisal, contract of sale, and plans for the use of the property. Providing these documents early can help streamline the process. Again, your realtor and lender will help you through the process.

14. Know Your Financing Options

While you are in the "shopping" phase of looking for a commercial property to purchase, you should begin to research your financing options. There are many kinds of commercial financing options available, so it is important that you find the one that best suits your needs. It's also very important to know how much you're qualified to borrow. This will help you and your real estate broker find the right type of property for you faster.

No matter what type of loan you wind up getting, negotiating the loan will be based on the same basic factors: anticipated use of the property, expected returns from the property or business conducted there, geography, type and size of real estate, perceived risk to lender and market conditions. There is no one rate applicable to all commercial financing. The rate you receive will be based on your specific situation.

If interest rates are low, securing a low fixed rate will mean you pay less interest over the entire mortgage. A variable rate, which is considered by some to be more risky, can give you a lower payment for a period (before it increases), which will let you use the money saved for other investments.

In weighing your financing choices, remember that some debt is good. Don't assume you should take the loan with the highest down payment requirement so you can "pay off your debt faster". Putting down more money means you have less to invest in your business.

Term Loans

Based on how much money you need to borrow, there are different financing options available. One option is a term loan. Term loans can be used for a variety of purposes, including financing permanent working capital, new equipment, refinancing, expansion, acquisitions and, of course, buildings.

There are loans specifically designed for commercial real estate or equipment. Banks typically lend up to 80% of the value of the real estate to be financed, and the loans must be repaid in 15 to 20 years. If you are able to come up with the remaining 20% on the cost of the property (and don't have anywhere better to invest the money), this is an option to consider.

Up Up and Away

Beware of balloon payments. While paying a very low monthly amount at the start sounds great, you often end up spending additional money to refinance your commercial mortgage as lenders reset interest rates or reexamine you and your business over the life of the loan.

Credit Line

If you want a more flexible loan, you may have the option of a credit line that can provide you with cash on an as-needed basis, up to a cap amount. Credit lines almost always have a variable rate, and have interest-only payments for the first one to three years.

Equity Financing/Joint Ventures

Equity financing involves joint ventures with investors that have the capital you need. Usually, the investor will receive a percentage of your business' profit in exchange for the capital you need to purchase the building or stock in the company if it is public.

Some investors will take a back seat to your executive decisions, while others will want a say in the operation of your company. Joint ventures are not for everyone, so keep in mind all of these factors when considering one.

The SBA 7(a) Loan Program

The SBA has a variety of financing products that are ideal for small businesses. The most commonly used SBA loan is the 7(a) Loan Program. The loan is provided through banks or non-bank lending institutions.

In order to be eligible for a 7(a) loan, your business must be for profit, and you cannot purchase real estate for investment purposes. There are many other guidelines to qualify for a 7(a) loan. The maximum amount a business can borrow from a 7(a) loan is $2 million. Furthermore, all SBA 7(a) loans have prime-based floating interest rates. This type of interest rate structure can leave you vulnerable to monthly/quarterly interest rate swings that can have a significant impact on your monthly mortgage payment.

Now you can see why it is so important to find a commercial lender who can help you digest all of this information and take the time to explain your options.

15. The Best Kept Financing Secret

One of the main reasons small businesses choose to rent instead of purchase their own commercial real estate property is the perception that they can't afford the down payment. Many of them are not aware that SBA-guaranteed loans are available to qualifying applicants and can provide up to 90 percent loan to cost financing.

In fact, the 504 loan program was designed to assist small businesses in building or purchasing properties while spurring business growth in the local economy.

Only 10% Down

While in some parts of the country, use of the 504 loan program is widespread, there are other areas, such as those east of the Rocky Mountains, where this program isn't getting the attention it deserves. If you are unable to put down much of the loan cost, the 504 is worth looking at: it only requires 10% - and there are no closing costs in addition to the 10% down! (Please note that there are certain basic criteria you will need to have to qualify for the 10% down program. A good lender work with you to do his or her best to help you qualify for this benefit.)

The other 90% of the financing comes from two places: up to 50% of the total cost (land, building, renovations, and soft costs) is paid for by a senior lien from a private-sector lender, and up to 40% comes from a junior lien from a Certified Development Company (this portion is backed by a 100 percent SBA-guaranteed debenture).

Smaller Payments

Since most banks and loan programs require a minimum of 20-30% of the property cost, and do not fold in soft costs and closing fees, 504 loans are a great way to get the best of everything: by paying only 10% down, you retain more capital and are able to make smaller payments over the life of your mortgage.

Because you have two separate loans with the 504, you end up getting a blended rate that is below market. The first loan is either fixed or variable, and is at or slightly higher than conventional financing rates. The second mortgage (the 40% loan) is considerably lower than market interest rates, and is fixed for the life of the loan. Having a lower interest rate lets your company retain more capital.

504 loans can close in 30 days or less, saving you time, and helping you get into your new property sooner. Another advantage is that there are usually fewer "hoops" to jump through to get approved, as long as you are dealing with a lender who specializes in this type of loan as opposed to one who might process one or two a year. The specialist knows this loan inside and out and can streamline the process, as well as make sure you are receiving all the benefits.

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How to boost your insurance payout on property damage claims

Submission of property claims is a complex process, which often is results shortchanged owner in the property. First of all, insurance companies are profit-oriented companies. You are not in the business for fun; You are in business to make money. Insurance companies have two ways to make money: collect bonuses and payouts to minimize.
Whether you a House and apartment owners have insurance claims insurance claim or a commercial property, the procedure is the same. You pay premiums to the insurance company for coverage. If you suffer a covered loss, you file a claim and the insurance pays you a settlement, less applicable deductible. However, this settlement may be not enough to replace you completely your losses.
To your insurance payment boost, you don't have to sit back and the insurance adjuster can tell you what they are numbers. Instead, you must take an active role or rent to be someone on your behalf. Keep in mind is that the insurance adjuster, no matter how beautiful is he, the insurance company used, the aim is to make a profit by minimizing the losses - including your losses.
On the other hand, a public insurance adjuster is one that you can rent to represent you. To document them all, and to negotiate higher payouts directly with your insurance company. They are licensed and are often former insurance industry employees who know how to play the insurance claim game. You can counteract tactics, the insurance company raises your way and aggressively pursue maximum settlement offers. These professionals earn a percentage of which is the payment to it in its own interest to maximize it.
If you want your property damage payout on own boost, find a reputable contractor, will be doing the repairs and questions visit the contractor with the insurance adjuster. The contractor shall have the know-how, point to all structural and cosmetic damage - damage, which may have overlooked the insurance adjuster on its own. In addition, the contractor will ensure that estimates actual reconstruction and material costs account to wear. The insurance adjuster estimates is based on books and software for the production while a genuine contractor has knowledge of the real-world costs.
One of the most important tasks in the promotion of an insurance payout takes a bit of work on your part. You must document everything thoroughly. Invest in a digital camera with a huge memory card and hundreds of images. For example, have water damage, recorded with standing water and water level and you must take pictures of each damaged item, in particular those who due to security concerns.
Use a notebook or your computer next to write, a complete inventory of the damaged parts along with their original costs and estimated replacement cost. Include everything, even small objects. You would add surprised significant quantities as your small losses soon to be. For example, if the content of your refrigerator as a result of the power is out for several days while a flood to be replaced, you make a thorough inventory of all items, even spices. At $2 to $4 a bottle of salad dressing, mayonnaise, ketchup, and olives, it takes not long before you have a huge grocery store Bill only to the basics of restock.
Don't forget to keep temporary accommodation and other related expenditure receipts for all emergency repairs and they are on your request. At the time of the claim, be as thoroughly as possible and make sure that the claim form is complete and readable. Insurance companies love, payments due to "no or incomplete" information to delay.
By taking a proactive approach at the time a claim you are property, in any case your payment boost.

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Gewerblichen Sachversicherung Eigentümer - was sollten Sie tun jetzt Winter hier ist?

Here winter with a vengeance in some areas has arrived in the United Kingdom. We see storms lashing the country out of very strong winds and heavy rainfall. We have already flooding in England, Wales and Scotland. During the long-term weather forecasters predicted the next three months always an impossible task weather, they seem to agree, is that we are no. in mild winter.
If you need to have in force a commercial landlord, and a commercial real estate owner insurance you steps some, at this time of year to try and prevent or at least to reduce the damage that your building can occur. At the heart of this is that you should not, of personal injury, you threatened be his steps, so you must not have roofs and walls climbing, but you must take an objective view of your building and it is building and the potential risks of insurance for you.
While this is no exhaustive list, these are some of the steps that you can take to ensure that your company insurance company does not come back to you and say, that you not proper maintenance of the building, which they are insured.
Water is one of the largest sources of claims through a roof. The problem is that this small can begin, and you are not even aware it. Continue over a period of weeks, the water penetration into the building as the rain continued.
Stage you would have asked originally posted, declare to your insurer (if direct) or your broker, certain details of the actual construction. If your building covered with slate or tiles and is opened, then this think what insurers standard be. You have any area roof that flat, or the "on wood felt", then this is what prove to insurers as non-standard is. It depends on the insurer and the percentage of the roof, which is flat whether insurers will apply all the specific conditions. For example, if the roof is less than 20% is its construction then is generally OK. Although you need to check your text.
More than 20%, and this typically results in a condition applies, that you have a competent (i.e. a roofer or generator) contractor your roof examine and correct damage, either annually or semi-annually.
So, in the context of your winter-check, you must ensure that your inspections to date are. Given where we are in recession, with the construction still craft suffer the brunt of the plc-economic miserable, the UK are rather than ever get to be a contractor and free of charge to do the inspection.
A word of advice is the contractor, to questions, some digital photographing of the roof. This allows you in two ways. The first one is, if the contractor recommends work, they can show you physical evidence this more as an unscrupulous contractor trying to pay you that do not get for work. Secondly, you can then the contractor you this email can keep questions and you they prove their bill insurers that they had carried out regular inspections.
Another problem is the water by a building of backed-up roof gutters and drains. Unless you have protection, you are unlikely claims, damage to the building had to get away. It is for a set range of risks or causes, such as storm, fire and theft insurance commercial building. Water for the debris (such as leaves) in gutters leak is not insured peril. So, you should if you do it, can check that your gutters are clean, or if this is too difficult, you can a local pipes and contractor to come and clear your gutters and drain.
One final point, which will affect not really storms or high winds, pipes is Berry. The most internal pipes in buildings today are retarded correctly. You must, if you can give the building, an once over and check whether all lagging available. In the course of time building movement or even bugs lagging may cause pipes "fall". Since we get colder days and nights in the a growing probability of pipelines split or expired as water freezes and expands. When it melts, the water is the fastest way of the pipe because it generally under any form of pressure.
Any form of commercial insurance is insurance to cover the unexpected event, it is not a maintenance policy. If you are in doubt please contact your broker and ask them, what action you must take, what you should do match to your insurance policy.

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Covering the importance of commercial property insurance and your assets

While a good deal to do cover the specific insurance package, often can contain some children of business such as professional indemnity insurance, all companies essentially have same type of insurance needs as individuals and ineffectual properties - for the most part. The difference is often in the form of degrees and certain items are covered. But have just like with other entities, company is deprived, take care of damage as a result of bad weather or any number of losses of assets by countless types of risks.

Much of where the difference is your own and the type of coverage refers directly to the types of company assets required, to protect these assets. They must instead of simply a roof or even money stolen from the safe, worry about damage companies expensive office equipment as well as machines and events unexpectedly repeating even loss of income in connection with all of these provide. During your home assets it has operations, people and many current concerns of a company. That is, why it is so important to commercial property insurance.

What basic business insurance from other kinds of insurance separates, which with dealt with you shall be liable. It is why things like commercial liability insurance were invented and are part of a basic insurance package for commercial ventures.

In contrast to your House or your car interact, for example, businesses and commercial interests with the public in General as a matter of routine. Essentially there are why you are in the business. They offer a kind of product or service to the public. The responsible for the entrepreneurs and their operations is Exchange with, the expectation. Any deviation from what good could be liable for this behavior. Even good make you liable.

What can have from this behavior as a result, is the action. And it is not only behavior, which is a matter of routine for your business. You can develop all kinds of strategies, protect yourself from the possibility, that nothing can go wrong with the business and service you offer. However, you are human. You can make mistakes. It also the case that you can is suing for the trivial behavior you never thought could, you might get sued. And, Yes, you have even a frivolous complaint-derived pay off if you properly, of course assured are.

While insurance in General is an important component of most modern day guidelines for business, is the most basic commercial liability insurance covering certain areas related to commercial entities. The most commercial ventures wear this type of insurance in contrast to say, professional indemnity insurance, which justify might require additional cost or a separate package and is suited for those who provide professional services to the public in General. With commercial interests, there are certain types of liability, which must be covered and are usually the most good basic policy packages.

A combination of material and cover discusses the basics of insurance for your business. But also this may not be enough depending on the circumstances. Sometimes it can be far from enough. In fact may be the focus of your cover are moved and modified to other forms of protection asset or liability because what you just for companies do enough not often, or is more than what is specialized in general out there.

As already mentioned, professional services in this category could be filed. In contrast to a commercial venture that give people a type of product or service for the general public generally busy, used a professional primarily their expertise, a specific kind of service to deliver, which comes with a certain expectation of the rules of conduct. While one is commercial interests at risk for things such as injuries or disable property or stolen machinery, there is the risk for things like error and omissions are a professional or only error-, is likely to make the professional not as a matter of normal business practice.

It is, why it is always to know what kind of business you need insurance, or you need commercial liability insurance against errors and omissions insurance (Yes, that is, what it means), a very important part is the process of getting insurance for your business.

It is also why in contact with the whole insurance professional, you get the right insurance is so important. Things like commercial liability insurance are a subject where knowledge and experience vital to always report your company are required. Including liability insurance as part of a commercial property package is something that can do the right people for you. You know, your needs, know the policies available and to meet them before you make the important decision.

If you talk to the right people, and get the right policies, you are your business and living in a way mean, who would you not have an other component of your business. Rip, she would negotiate not the business of the century only to the contract the next day. They would provide any great delivery, only it take again a week later. She would not design a new website for a client only infect it once with a virus. Now, how these types of things to your company compromise would not, get would not the wrong business insurance or commercial liability insurance, which could leave you vulnerable to unnecessary risks and unwanted headaches.

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