Finance Roll

The message to CLOs is becoming clearer and clearer. Company leaders want them to align educational offerings with the organization's strategic objectives.

That's not an easy challenge. They must ensure that education and communication initiatives reinforce the company's goals. They must help employees understand these goals and develop the skills and motivation to contribute to them.

And at the most basic level of alignment, they must make sure that every employee understands how the company makes money. That includes understanding how profitability is driven, how assets are used, how cash is generated and how day-to-day actions and decisions, including their own, impact success.

Developing business acumen is fundamental to business alignment. Consider Southwest Airlines, which was founded in 1971. With 33 straight years of profitability, the airline has become widely recognized for the motivational culture it creates for employees and its extraordinary dedication to customer service.

Much of the industry has suffered during the years of Southwest's growth, including many airlines that have merged or declared bankruptcy. Southwest buys the same planes and the same jet fuel as other airlines, and pays its employees competitive wages and benefits. What's the difference?

Unlike some of its competitors, Southwest's management team involves employees in the company's financial results, explaining what the numbers mean and, more important, helping to link everyone's decisions and actions to the bottom line. The airline has an open culture, one of inclusion at all levels, and employees understand their roles in providing great service and keeping costs in line.

Certainly there are other factors that contribute to the success at Southwest, but it's difficult to ignore the positive impact of an approach that develops the business acumen of all employees and managers so that they can contribute to the airline's success.

An Educational Challenge

Unlike those at Southwest, individual contributors and managers in many organizations today have not been educated about the big picture of their businesses. They have a narrow focus on their own departments and job functions and aren't able to make the link between their actions and the company's success. Multiplied by hundreds or even thousands of employees, this lack of understanding - the lack of true business acumen - means that too many decisions are being made and too many actions are being taken that don't align with business objectives.

How can training help bridge this knowledge gap? For many companies like Southwest, implementing learning programs designed to develop a strong foundation of financial literacy and business acumen has made the communication of financial results to employees easier and more effective.

Business Acumen: A Definition

Very simply, business acumen is the understanding of what it takes for a business to make money. It involves financial literacy, which is an understanding of the numbers on financial statements, as well as an understanding of the strategies, decisions and actions that impact these numbers.

Someone with financial literacy, for example, would be able to "read" the company's income statement. This employee or manager would understand the terminology (revenue, cost of goods sold, gross margin, profit, etc.) and what the numbers represent (i.e., gross margin equals total sales/revenue less the cost of goods sold).

With business acumen, the individual would be able to "interpret" this same income statement, taking into consideration how company strategies and initiatives have impacted the numbers during specific periods of time.

Consider a simple comparison: In football, it's necessary for players to know how the game is scored as well as how to play the game to change the score. In business, financial literacy is understanding the "score" (financial statements) and business acumen is understanding how to impact it (strategic actions and decisions).

Asking the Right Questions

When business acumen spreads through an organization, employees and managers begin to ask questions. These questions are directed not only at the organization, but also at themselves and their departments - questions about processes, products, systems, staffing and more that can lead to necessary and innovative decisions and actions.

Business acumen helps everyone understand that it's not enough to ask, "How do we cut costs?" or to say, "We need to increase sales." Digging deeper, employees with higher levels of business acumen will ask questions that take into consideration the far-reaching impact of potential decisions and demonstrate a greater ability to make the connections between performance and results.

Questions that could get to the root of disappointing operating ratios:
• Have production costs gone up? If so, why?
• Have we changed prices? If so, how has that affected our margins?
• Are there any competitive issues impacting our performance?
• Have there been any customer requirement changes?
• If our costs per unit produced have gone up, can we better control the efficiency of our production or service delivery?
• Is there a way to produce a greater product volume at the same cost?
• Can we raise prices, still provide value to the customer and remain competitive?

When questions become more specific, the right decisions can be made.

Business Acumen for Managers

Managers at all levels need a high level of business acumen to do their jobs. Every day, they make decisions about employees, projects, processes, expenditures, customers and much more - decisions that ultimately roll up into larger organizational results. Managers who make these decisions while looking through a departmental lens only, with a limited understanding of how these decisions affect financial results or how they are tied to the organization's goals and objectives, are working in silos that can ultimately damage the company.

Managers are often promoted to their positions of responsibility because of their "technical" expertise. They've been successful customer service representatives, great salespeople, innovative researchers or well-respected IT professionals. They are now entrusted with decision making, budgets, projects and people. They often do not have financial literacy, nor have they developed a higher-level perspective about the business. Over time, especially if they move up the managerial ladder, they may develop these. Or they may not.

Organizations need managers who operate as part of the management team, taking accountability for their own results as well as the results of the entire company. Therefore, more and more organizations have built financial literacy and business acumen into managerial competency requirements and have integrated business acumen training into management curriculums.

Business Acumen for Employees

Although there is little debate about the need for managers to develop business acumen, organizations sometimes question the need for this understanding at employee levels. But frontline contributors, those who are most directly involved with production or customer service, for example, take actions every day that impact business results.

Consider the salesperson who discounts products, or the service representative who deals with an unhappy customer, or the maintenance person who notices a problem. The actions each of them takes might erode profit margin, lose a good customer or allow safety issues to escalate. Without an understanding of how their actions impact the company's results, they might not have the context to consider alternatives.

Many organizations have determined that financial literacy and business acumen aren't just for managers anymore. They have decided to develop a company of people who understand the business; who know what return on assets and return on investment mean; who know how inventory turnover rates affect results and the importance of positive cash flow; who see the connection between the company's financial success and their own health benefits, 401(k) plans and more. In other words, they need people who understand the "business" of the business.

In his book Good to Great, Jim Collins says, "We found no evidence that the 'good-to-great' companies had more or better information than the comparison companies. None. Both sets of companies had virtually identical access to good information. The key, then, lies not in better information, but in turning information into information that cannot be ignored."

With an increased level of business acumen, managers and employees can better interpret information, making the connection between their actions and the company's results.

Another Reality of Today's Business World

A public company's operating results are well known at the end of each quarter. Analysts, investors, the media, employees-everyone has access to a company's financial results. With a significantly increased focus on accounting improprieties over the past few years, senior management has become highly conscious of the need to provide accurate and timely financial information. And employees have become much more likely to wonder about these numbers. "Is my company being honest? Are the numbers telling the whole story?"

Without a fundamental understanding of financial results and an ability to interpret them, employees may become suspicious and, ultimately, disengaged. Disengaged workers, in turn, negatively impact productivity and profits.

CEOs of public companies, then, must ensure that managers and employees are able to understand the numbers and have confidence in them. That means effective business acumen education as well as ongoing and open communication from the top.

Former GE chairman Jack Welch said in his book Straight from the Gut, "Getting every employee's mind into the game is a huge part of what the CEO job is all about...There's nothing more important."

The Big Picture

As we have become a nation of specialists, armed with new information technology and enterprise-wide operating systems, it has become easier for managers and employees to become myopically immersed in their own jobs. This immersion can have the effect of obscuring their view of the big picture. They may not consider the cumulative effect of wasted assets. They may have little regard for the objectives and responsibilities of other team members, departments or divisions. They may lack the motivation to invest personal energy in critical project work.

Organizations that engage in developing business acumen provide a clearer vision and an overall context within which employees can work, while creating an environment that is more likely to break down internal barriers. There is less waste and less ambivalence. There is increased innovation. Employees are more engaged, they understand their role and its impact on business results, and they are more likely to believe that their efforts really matter. They are more likely to think like a business owner.

Think Like an Owner

To be successful, business owners must be able to helicopter above day-to-day issues and see the big picture. They must understand how the pieces of the business fit together to impact profitability and cash flow, and they must be able to assess the risks and rewards of potential decisions. The best business owners study the numbers, ask themselves tough questions, analyze their mistakes and take decisive action.

To truly understand the business, owners have to understand how that business makes money - in other words, how it produces sales, profit and cash. Organizationally, they know that it's about people, processes and productivity. On the customer front, it's about satisfaction, loyalty and market share. Ultimately, every action taken and every decision made in any of these areas will impact sales, profit or cash.

When managers and employees begin thinking like owners, they, too, look at the big picture, understand how all the pieces fit together, and assess risks and rewards. They understand, like an owner, how the company makes money, how it stays in business and how they contribute to its success.

The benefits to an organization of engaging managers and employees in this kind of ownership thinking are obvious. So how can a company develop the business acumen of its people?

Developing Business Acumen: Two Stories

Entrepreneurs are generally forced to develop business acumen on their own. They are hands-on with their businesses and have to make all the decisions as they go along, whether good or bad. They either learn from their mistakes or fail.

It's very different for managers and employees in an organization.

They aren't involved in all aspects of the business, and they make decisions primarily within their own areas of responsibility. Since seeing the connections isn't easy, they need to learn in some other way.

Books and lectures can help. But business acumen is best developed experientially. Learners must be able to analyze situations, ask questions, discuss issues with other learners, consider options, make mistakes and see results.

Although there are a variety of ways to accomplish this kind of experiential learning, many companies have found that simulations, which mirror reality and allow learners to experiment in a safe environment, are one of the best ways. Here are the stories of two companies who chose to educate their learners with business simulations.

Comcast Cable Communications

The NorthCentral Division of Comcast - one of the country's largest entertainment, information and communications companies, specializing in cable television, high-speed Internet and telephone service - set out to ensure that managers and employees throughout the organization had the financial acumen required to make good decisions. A companywide survey had clearly demonstrated this need - especially for managers of employees who had direct contact with customers.

For example, if a customer calls with a service problem, frontline employees and their supervisors can issue credits to the customer's account in an effort to resolve the issue. Although this may be exactly what is needed for the situation, Comcast realized that employees making these decisions didn't necessarily understand that a $10 credit could ultimately require more than $100 in revenue for the company to break even. Similarly, a service technician's visit to a customer's home might cost $50 directly, but the company might have to sell an additional $500 in services to cover the cost.

"The lack of financial acumen among supervisors and employees was largely understandable," says Mark Fortin, senior vice president of finance for Comcast's NorthCentral Division. "Almost 75 percent of the company's employees are on the front lines in roles such as call center personnel or field technicians. They are trained to be good at what they do, but their backgrounds typically don't include emphasis on financial literacy."

Comcast human resource executives determined that a fundamental approach to the development of business acumen was needed. However, this approach also would need to be fast, engaging and job-relevant. Expanding upon its already robust Comcast University management curriculum, the executives chose to integrate a high-energy, tailored learning experience that would provide the "basics" and, at the same time, deal specifically with Comcast terminology, concepts and strategic imperatives.

As they participated, learners made decisions about products, processes, pricing and more, and they saw how those decisions impacted financial success. In the end, it became easier for them to make sharper day-to-day choices.

"The thing that sticks out for the frontline leaders, the field technicians, and the call center supervisors and managers who attend, is the high cost of sales in our business," says Sophia Alexander, senior manager of curriculum and metrics for the division. "It's like a bell goes off in their heads when they realize what it costs for us to earn what we need to earn to run the organization."

Attending the learning session is not mandatory for supervisors and managers. However, there is an unwritten expectation that they will participate in business acumen training as well as other Comcast University core programs, according to Jan Underhill, senior manager of leadership development for the NorthCentral Division. That expectation, coupled with the fact that manager compensation has recently become tied to meeting specific financial goals, has kept attendance high.

Senior executive support also has been an important factor in creating interest and awareness around financial literacy. "Getting people to sign up is much easier when senior executives like Mark Fortin are strong advocates for the program," says Underhill.

Feedback has been resoundingly positive. On average, for example, Level 1 feedback about the discovery learning based business acumen sessions has been 4.5 on a 5-point scale. That means that the program has exceeded expectations. Better than that, says Sophia Alexander, senior manager of curriculum and metrics for the NorthCentral Division, is the empirical evidence that the new insights and knowledge have made a difference. For example:

• Participant self-evaluations indicate that financial literacy has increased by at least 25 percent as a result of the business acumen training.
• After the training, there was a 20 percent increase in the participants' ability to use basic financial terms and concepts on the job.
• Almost 45 percent of supervisory participants report that they are using their business acumen knowledge in daily communications with staff and peers.

"Some people, particularly in big companies, feel like there is an open checkbook. They think... I don't own the company. It's not my problem. Somebody will pay the bills. But in today's environment, with some very large companies in trouble, everyone needs to be part of the solution. Business acumen education for managers and employees helps the company as a whole, but it also helps employees. It's about self-preservation to some extent." comments Fortin.

Southwest Airlines

Southwest Airlines is one of the consistently profitable companies that makes "business literacy" a core component of its employee training programs. Every employee has a solid understanding of what a new customer, and new revenue, means to the company. Employees also know how the loss of a customer can impact the business.

According to Elizabeth Bryant, director of leadership training at Southwest Airlines, "Our training covers how the financial ratios such as return on assets and various margins are determined. Knowing that team managers, supervisors and all employees have this knowledge enables the company's leadership to present detailed financial reports and explain to the teams where the margins need to be. Management can speak more in depth to all the employees, and the employees understand what the objectives are."

Bryant added, "Because we don't waste the little things, because we track every penny and every activity, we've all come to know the importance of each cent. With the pennies in hand, we spotlight the idea of compound interest- for example, how the small savings help us by year's end and how small amounts of waste can conversely add up to hurt us."

Consider the importance of a key operating metric for the airline industry - operating cost-per-seat mile. This is how much it costs an airline to fly one seat one mile. All the operating costs are divided by the total number of seat miles (the total number of miles of all the seats that were flown for a given period, whether a passenger was in the seat or not). Much of the industry has had cost-per-seat mile results at or over 10 cents. Southwest Airlines' cost-per-seat mile is about 6.5 cents. The lowest cost-per-seat mile in the industry almost 25 years ago was just over 5 cents.

How do they do it? Certainly there are a number of factors that lead to success. However, one of the key influences is Southwest's ongoing training in business acumen. This training ensures that employees know:

• How challenging it is to ensure ongoing profitability; making a profit can never be taken for granted
• The importance of utilizing the benefits of the good years to prepare for the tough years
• The impact of individual actions and decisions to the bottom line

In other words, Southwest invests in training to help employees think like business owners. This, in turn, produces real results, like its consistently low cost-per-seat mile. When Southwest's learning team decided to implement a business acumen simulation several years ago, there was some initial concern about how well it would be received.

Bryant explained, "Some people, especially those without financial training, were nervous about the topic. We are such a people-oriented company that we didn't want people to think that now we're just a financially oriented company and everyone will be judged purely on financial performance. But we positioned the need for the business literacy training as another way to prove that we actually care tremendously for each employee. We explained that if you understand what the numbers mean then you can better understand how your work provides an integral contribution to the business."

Southwest Airlines, according to Bryant, has never had a layoff - a rarity in the airline business. The more their employees understand the challenges of the business, the better they appreciate the importance of making smart decisions every day.

Bryant concluded that the discovery learning techniques in a robust business simulation work well in the Southwest culture because of the team orientation. "All the participants learn that they can't individually make it all happen," said Bryant. "They learn that they have to look beyond themselves, act and think like an owner, and realize that our efforts and financial results here are not just for a career, but for a cause. It's this cause-oriented philosophy toward delivering a low-cost, high-quality service that allows people the opportunity to travel. Our success at achieving positive results translates to individual opportunities to work, to grow and to continually think of innovative ways to improve our business and serve our customers."

The Classroom Advantage

These two companies chose to develop the business acumen of managers and employees by using a classroom-based simulation, facilitated by instructors at company sites. Although online options were available and were used in some cases to supplement the instructor-led training sessions, they decided that there were significant advantages to tackling this subject in a "live" session where they could leverage the power of:

• SHARED KNOWLEDGE AND EXPERIENCE: Learners bring their own perspectives and issues to the session.
• TEAMWORK: Learners work together, make decisions together and rely on each other as they learn.
• COMPETITIVE FUN: Small teams "play" against each other and enjoy a competitive environment.
• COMPANY-SPECIFIC DISCUSSIONS: The learners' common interest in their own company's financial and strategic issues allows for greater analysis and depth of discussions and a true "connection" between the learning simulation and the organization's reality.
• LEARNING MOTIVATION AND COMFORT: Learners who may not be comfortable with the subject of finance find themselves playing a game in the comfort of a team environment.

Although there are a number of educational approaches available to organizations in the area of business acumen, classroom-based training that brings together teams of learners can help ensure that learning occurs and that connections to the business are made in ways that prompt action back on the job.

The Bottom Line

More than ever, successful companies will need to focus on developing the business acumen of managers and employees. These companies will realize that when their people understand the numbers, when they understand how their departments contribute to the company's objectives and when they see how their own decisions and actions make a difference, they will begin to operate as part of a team rather than in a departmental or personal silo. And a critical piece of the alignment puzzle will be solved.

With widespread business acumen, companies can have a powerful asset - educated, knowledgeable and motivated employees. And with this asset, those will be the companies best positioned to succeed.

With all the financial planning we do, there are still bound to be a few emergencies in life. It could be a huge medical bill, an unexpected insurance payment, urgent repair work or even a broken down car - the reasons could be many. When you are in dire straits and you need money urgently, cash advance loans or payday loans can help you bridge the gap.

What are cash advance loans? These are unsecured loans that are designed to meet short term emergencies. These loans are high risk loans and therefore come at premium rates of interest. Cash advance loans require minimal verification. Therefore, these loans are approved almost immediately and the amount is disbursed within a few hours. These loans are available to almost all borrowers, regardless of their credit rating. Full repayment of the loan with interest has to be done in 14-30 days. Generally, these loans can be rolled over once or twice only.

The first step in availing cash advance loans is to find a reputed lender. Some of the common mistakes borrowers make include applying for payday loans through unsolicited emails that land in their inboxes, ignoring the fine print on the agreement and choosing the lender without ascertaining their reputation. If companies offer loans without any verification, their interest rates will be correspondingly high because they are financing a high risk loan. In such cases, it is important to check out the credentials of the lender.

The second step is to apply for the loan. These days, most lenders have a strong online presence. This means, borrowers can submit their application online and wait for the check to arrive in their account. Most lenders require standard information like your banking details, basic identification details and the loan amount. Once the application is submitted, the lender will verify the information and upon approval, send in the payment to your bank account. The exact term and amount will be fixed by the lender. At the time of loan repayment, the amount will be withdrawn automatically from the bank account through a post dated check collected by the lender from the borrower at the time of disbursing the loan.

A crucial part of the process is reading the loan agreement form upon receipt. This form contains details about repayment. In case the borrower is unable to repay the full amount with interest at the end of the term, they will have the option of rolling over the loan. This is an expensive process as it involves extra fees and additional interest rates. That is why it makes financial sense to repay cash advance loans as agreed, failing which you might end up in a debt trap. Most reputed loan vendors have a friendly customer service cell. The duty of this cell is to explain the loan, its utility and terms to customers. This makes it possible for borrowers to procure loans that suit their financial means.

In case you need a large amount, you may not be able to get cash advance loans from a single lender. In this case, you will need to approach multiple lenders. But keep in mind that lenders make use of highly accurate systems to learn details of outstanding loans and default payments.

The savvy home buyer is the one who shops around for the home loan finance before shopping around for a property to buy. That way, he or she knows exactly how much he or she can (or can not) afford to pay when buying a home. The buyer can then confidently seek out, only properties, within his or her pre-qualified home loan price range.

The only certain way of knowing how much you can borrow is to go through the home loan pre-qualification process. Loan pre-qualification is not difficult, and if you are not a cash buyer, it is an essential part of the whole home buying process.

Home loan pre-qualification starts the ball rolling and is the first step in formally applying for a home loan. It lets the buyer know what is and is not possible.

Pre-qualifying for a home loan also puts the buyer in a much stronger negotiating position with the seller. The fewer sales conditions included in the contract the better.

A loan pre-qualification can also help a real estate agent to better meet the needs of the buyer. A real estate agent can waste a lot of time searching for properties that are out of the home buyers financial reach.

By knowing what the financial boundaries are, a real estate agent can concentrate on finding properties that fit within the home seekers budget. This will save the agent time, and it will save the buyer time, by not having to inspect properties that he or she can not possibly afford to buy.

As I said earlier - The big advantage in pre-qualifying is that it puts the buyer in a much stronger negotiating position.

If the seller gets two similar offers to buy the property, the offer from a fully pre-qualified buyer with most likely get preference over an offer with conditions attached. Most vendors are wary of signing contracts subject to the buyer applying for home loan finance and getting the application approved.

The seller might even accept a lower offer from a pre-qualified buyer, rather than take the chance the other buyer might fail in obtaining the required loan financing.

There are two methods of applying for a pre approved loan. The standard way is to supply a home loan agent with your financial and credit history. The loan agent will then 'crunch the numbers' and 'run the ratios' to calculate the level of borrowing that can be approved. A major flaw in this scenario is when the borrowers forget to reveal all. They (conveniently) forget to tell about their three overdue credit card payments, their new car payment or they push their income figures beyond reality.

The preferred method is to first complete an application and provide income and employment records. The loan agent would then run a credit report and actually submit the file to a wholesale lender for underwriting before receiving approval and commitment for loan finance.

The message is simple; get a pre-qualified first, then find your dream home. Remember, getting the order right will save you money when negotiating the contract. Having a pre-qualified loan also tells the seller you are serious and really can afford to buy the property. Pre-qualification is a powerful negotiating tool when presenting an offer to purchase.

As an African safari guide once told me, "you do not go tracking a lion, find him and then worry if you have any bullets in your gun!"

By the way - we were not hunting lions to shoot... we just did not want to be eaten alive!

Good luck in your house hunting!

What happens when you are sued for more than your basic homeowners or auto insurance policy covers and are found liable? Well, for most people, it would mean liquidating unprotected assets in order to satisfy the judgment. This may mean garnished wages, selling property, and possibly losing some of your investments. This is certainly a situation that could ruin your life, but there are ways to protect yourself.

A personal umbrella policy is additional coverage that goes above and beyond what your homeowners and auto insurance policies cover. Think of it as a protective umbrella that will pick up the damages once you have exhausted your coverage of those policies.

Your home is likely your most valuable asset-make sure it is properly protected. While insurance agents will help determine the kind of coverage you can buy, it is ultimately your responsibility to know what the policy covers. And remember, insurance agents are salesmen and typically work on commission. This isn't a bad thing, but be aware of what type of coverage you actually need so that you can spot it when you're being sold something you don't truly need.

This is one of the most important things to remember when planning for the "Golden Years" Protect your assets. Also, start thinking of ways to supplement your retirement income.

Lately, I've been looking at sources of passive income in order to bolster (and hopefully eventually replace) my current income. It is a fond dream that at some point in the future, I could largely step back from doing active day-to-day work and instead use these sources as my primary income stream. In that eventuality, I could devote my time to volunteer causes and charities I'm passionate about (and maybe have time to sit back and read a book for pleasure on a lazy afternoon every once in a while).

The mere act of owning many investments can be considered a source of passive income. You merely hold the investment and regular dividends are paid out to you. Many people tend to focus on investments in terms of the increase in resale value, but many others quietly hold stocks and bonds that pay large dividends, lining their pockets with capital gains. Look for individual stocks and bonds or index funds that pay good dividends, then sit back and watch the money roll in.

The internet, magazines, and books on personal finance are chock full of calculators and projections to help you figure out "your number" - the usually astronomical sum of money that it is allegedly going to take for you to live off your portfolio of securities, not work, and still maintain some semblance of the same lifestyle you had while you were working.

The exercise seems reasonable - necessary even - but the problem is that the results are almost entirely arbitrary, especially if you are more than 10 years away from retirement.

Any shift in any one of the variables can drastically alter the final figure that pops up, telling you how much you need to have saved in order to retire at X age or how much each year you need to be putting away.

If you have a portfolio you might want to rebalance it every so often. Rebalancing is the act of sitting down once per year and adjusting your portfolio toward your target asset allocation. Let's say you hold two funds because you want a 50% US stock exposure and 50% International stock exposure. During the last year, it is unlikely the funds have gained and lost exactly the same. So you end the year and US stocks have been up more than International stocks. Your current portfolio weight is 53% US and 47% International.

Doesn't sound like a big deal, right? Just 3%. Well, over time that gap can get larger and larger until one day you find yourself with a 75/25 allocation-way out of whack.

Bad credit can be financially crippling when trying to apply for a credit card or a loan or even more of a problem when applying for a mortgage. Bad credit can cause many sleepless nights and family stress, while trying to acquire a mortgage for your new home.

It is very easy indeed to lose your good credit status, a few late payments, or one missed payment can seriously damage your credit rating. A couple of weeks off work, sick, or some unforeseen large payment can easily damage your credit. Making it difficult to get a mortgage for your dream home.

Many people will turn to companies that specialise in helping people repair their credit status. These people may not realise that having bad credit does not necessarily bar you from getting a mortgage. It may, make it more difficult, and a little more inconvenient, but it certainly does not mean that mortgage is beyond your reach.

A bad credit mortgage may in fact be the best way of repairing your damage credit and regaining the confidence of lenders of all kinds. One of the main purposes of the bad credit mortgage is to repair the damaged credit score, and also get individuals back on the road to financial security.

Bad credit mortgages will give you the opportunity to show lenders and credit reporting agencies that your credit status was caused by situations outside of your control and you are in fact, well capable of making regular payments. Making these regular payments can quickly show to lenders that you are a responsible borrower who wishes to resolve their credit history problems.

The first thing you need to do to obtain a bad credit mortgage is to find a company to lend you the money. It is not advisable to do this on your own unless you have considerable knowledge of the mortgage market. It is quick and simple to secure the services of a mortgage broker, who has the knowledge and the skill to bring you together with a quality mortgage lender who will suit your needs.

When you find a broker, you need to make him aware from the beginning that your credit is less than perfect. That way, he can save time by knowing which lenders may be suitable for your needs. Not only can a bad credit mortgage help you to resolve your credit score problems. It can also be used to fix some of your financial credit problems as well.

By credit mortgage can be used to fund paying off some of your existing debts, such as credit cards and car loans. Lowering your monthly payments by rolling all his debts into one payment, which will be far more affordable for you.

Some companies now specialise in these kind of mortgages, and are sympathetic to people who have found themselves in difficult financial and credit situations. They understand that circumstances beyond your control may have forced you to miss a couple of payments on a credit card. But that does not necessarily make you a bad risk of paying your mortgage in a timely fashion.

There are many mortgage brokers, some of them online, who can point you in the right direction and give you lots of useful advice about how to locate the best mortgage provider for your bad credit mortgage situation.

Ever since the credit crisis of 2008 the financial landscape has changed for us all irrevocably. One of the most obvious examples of this has been the difficulties experienced by both businesses and by individuals in securing credit, whether in the form of a business loan or, for the ordinary working man or woman, a credit card or mortgage.

Much has been written about the difficulties in particular facing many people - especially young people - in securing a mortgage to take their first, faltering steps on to the property ladder. But the problem of getting a mortgage is not restricted to first time buyers only. Even people who have a mortgage at present are finding it extremely hard to extend their borrowings to help them make the move to a bigger property as their needs change. As a result, the property market is in a state of stagnation.

While there is an understandable tendency to be pessimistic about the future confronted with such circumstances, there are, happily, a number of simple, straightforward tips which can help you secure a mortgage to buy the home of your dreams. Note we said these tips were simple, but that is not to say they are necessarily easy to implement. To get on the housing ladder these days will take planning and a degree of self-sacrifice, but if you are willing to commit to them, the following tips will undoubtedly help

The first tip could not be simpler. Make sure your details are recorded on the voters roll. Credit agencies always check this and it could not be simpler to ensure you name is down.

As lenders have become much more choosy about the people they are willing to grant mortgages to, it has become increasingly more important to be able to demonstrate that you can put down a significant deposit towards the purchase price of your new home. The days of one hundred per cent loans are gone and are unlikely to return in the foreseeable future, if at all. The most competitive mortgage deals are reserved for those who are able to fund a substantial deposit. This is where self-discipline and sacrifice come into play. If you are able to commit to save as much of your free cash as you reasonably can for a period of time, to build up a sizeable deposit, you not only stand a much better chance of getting a mortgage in the first place, but also of securing a better interest rate as well. It's worth bearing in mind though that the very best rates available tend to be for borrowers who are able to put down a deposit of more than twenty five percent of the property value.

When assessing any mortgage application banks, building societies and other lending institutions will pay close attention to the applicant's credit report. It is important to be aware that these reports are not always foolproof and very often may contain errors which could adversely affect your application. As a result, it is essential that you check your credit score yourself in advance of any mortgage application and address any errors which are contained in the paperwork. By paying a small fee to the relevant credit agency you can get hold of a copy of your report and once you have identified any discrepancies it is usually pretty straightforward to have them rectified by contacting the relevant company direct. A small amount of work here can save a great deal of pain and distress at a later date.

Another thing that lenders are looking for when considering any mortgage or credit application is that the applicant appears to have a stable, solid background. That is, they favour applicants who have held down a job for a decent amount of time and who can demonstrate that they have lived at the same address for some time too.

Applicants who have a chequered employment history or who appear to have moved from address to address in a short space of time are likely to alert the interest of the underwriters, leading to their application failing.

Commercial mortgages aren't usually full term loans. By this, I mean that it is pretty rare for a loan to be paid off over its term. Instead, most commercial financing is refinanced for one reason or another well before the loan matures. In this article, we take a look at how the refinancing process works in the commercial arena.

The average commercial mortgage is very different from residential personal loans in many ways. One is the purpose. Whereas a person might expect to own a home for such a long time that they could pay it off, the same is not true with a commercial mortgage. Not even close. Whereas you might voluntarily choose to refinance your home to pull out money to add a new room, commercial loans do it more as a requirement.

Every commercial mortgage is different. That being said, the most common approach is what is known as the balloon/amortization model. In this model, we find a loan set with a relatively short term followed by a balloon payment. The loan payments, however, are amortized over a longer period of 25 to 30 years. So, does anyone expect the balloon payment to be made by the borrower out of their profit? No.

The goal with these loans is much like the national debt - to roll it. The number of commercial mortgages that are paid off over the course of their full term with borrower money can probably be counted on a single hand. The better and accepted approach is to refinance the mortgage when it is advantageous based on rates and circumstances. If an opportune time doesn't occur during the term of the loan, bridge loans or other temporary financing is often used to bridge time until better rates come on line.

While refinancing is expected in the commercial loan market, that doesn't mean it is just a matter of snapping one's fingers to get a new loan. No, it takes just as much work and just as much preparation as when the original loan process was undertaken.

The concept of what you want versus what you really need can be critically important in your efforts to conserve and save money, and consequently help the status of your family and household budget. This is just one of a number of financial strategies that I'll be rolling out for you that should help you learn how to budget just a little better and help improve your personal finance picture. Good goals for us all!

I'm not sure who helped me learn this difference, between wants versus needs, but it has been important in my efforts to make budgeting work more effectively. For most of my life I've considered things to purchase, whether for my personal use or for the family and household, based on what we've wanted. We want a new barbeque, we want a new car, we want a new television, and so on. This has most often been the criteria we've used to determine where we're putting our financial resources.

Purchases like these end up being "impulse" purchases and really suck up and absorb a lot of the cash we've had available after basic necessities have been handled. When we finally grasped the concept of considering whether we really NEED these items, we've found that we often don't spend that money.

By holding off making purchases of items like these for a few days, or even a few weeks, we would often realize that we didn't really need that barbeque or new car. Very often what we'd been using up until then would continue serving our needs just fine.

You might find if you look around your house and garage you'll see items that you bought when you felt that you needed them, when in reality you really just wanted those things. I know we have a lot of things that we spent precious funds on that we've never used because we didn't really need them. We just liked the idea of owning those items and we fooled ourselves into confusing wants and needs.

We use this idea a lot when we go grocery shopping. We try to shop only using a list that we've prepared at home before we go out. When we're at the supermarket and see or think of something we want (that's the critical word, "want") if it's not on the list we'll jot it down at the bottom and NOT buy it on that trip. Later, at home, we'll have a chance to think about whether we really need that item, and if we do then it goes on the list for next time. If we really don't need it, we just saved a few bucks.

Make sure the item or experience you want to spend your money on is a "need" and not a "want." Sometimes this can seem like a thin and indistinct line, with no substantial definition, but if you stick to the need list, you will spend less. You really DO know whether you need something, or if you just want it. Don't let yourself be fooled, by your fast-talking mind, into buying stuff that you really just want.

I hope these ideas have put you on the right track to considering small things that you can do, which can add up to big amounts, to improve your personal finances and help to protect your precious family financial resources!

Business owners that are looking for viable commercial mortgage loans should look hard at SBA financing. These loans continue to close and relative to other sources of capital, like conventional bank loans, SBA financing is much healthier. In addition, SBA loans have many advantages over conventional financing, which we discuss below.

But first, let me address a few common concerns with SBA financing. The SBA has a bad reputation with many, as being overly cumbersome. And granted, if you work with the wrong bank, you will likely double the processing time to get the loan done. Many banks that are not fully focused on SBA loans, will have to have their loans underwritten twice, once by the bank, than by the SBA... If you go with the right source, your loan will only have to be underwritten once.

The other common concern is that people have a misperception that if one bank declines the file that the loan request must not fit the SBA guidelines and is not eligible. People need to keep in mind that banks finance deals, the SBA only guarantees the debt for the bank... And banks guidelines are almost always more restrictive than the SBA's. If you have been declined, keep looking and find out why.

Commercial Mortgage Loans Vs SBA Loans

Highest loan to value in the business. SBA loans go up to 85% financing on refinances and 90% on purchases. In addition, it is common to roll all cost of a project into a loan. For example, if you where purchasing an office building for $800,000 and needed an additional $200,000 for renovations and equipment for $200,000, you would be able to get 90% financing on the $1,000,000...

Most conventional financing would require you to put 30 - 40% down on the $800,000 purchase price and the renovation/equipment financing would be up for grabs. You would likely having to pay for those items in cash. On refinances, conventional commercial mortgage loans now rarely exceeds 60% loan to value. Again 85% with SBA vs. 60% conventional; this is the decision maker for many businesses.

25 year amortization with fixed periods ranging from 3, 5, 7, years is still available with the SBA. Conventional commercial financing is now capped at 3 -5 year fixed rates with amortization schedules rarely exceeding 15 - 20 years. These shorter amortization schedules increase monthly payments significantly and can be a serious drain on cash flow.

No balloon clauses with the SBA. SBA loans are fully-amortizing, meaning that they pay off by the end the amortization period. Most conventional loans will have a structure such as a "3 year fixed period, with a 10 year term, on 20 year amortization schedule." At the end of the 10 year term, the borrower faces a balloon. With SBA financing there's never any pending balloon that could very well put the borrower in a bad position.

Relatively low prepayment penalties with the SBA loans. On a SBA 7a loan, the pre pay is 5% in year one, 3% in year two and 1% in year three, gone thereafter. The borrower is allowed to pay down the principle by up to 25% of the balance without incurring the prepayment penalty. Compared to the typical conventional prepay at 5% for 5 years or a 5% step down, the SBA pre pay is cheap and more flexible.

None of the above really discussed the most important point of all - that SBA loan are the most viable and reliable sources of commercial mortgage loans in the business today. The credit crisis will likely to continue for another year or more. These loans are still closing while many conventional loans die while the loan is in underwriting, costing the borrower thousands of dollars and two to three months of wasted time and effort.

Development finance certainly saw some significant changes in the last three years when the number of development lenders dropped and funding became more difficult to obtain.

However, there are still deals to be done and still a number of lenders who are genuinely willing to lend. It's imperative to find lenders with enthusiasm. Brokers need to identify the right lender for the loan and ensure their client can meet the lender's criteria.

The development finance market is an area with growing demand for funding because the big banks still have no appetite for this type of lending at the moment. The lack of competition has led to relatively high pricing, which means there must be decent profit levels in each and every deal.

In speaking with a few of our developers, they shared that they are still very sensitive toward current pricing, whereas others have accepted that low-cost funding in this area doesn't really exist anymore. The deal can get done but at a higher cost.

Another aspect to consider is the type of development being financed. Commercial development funding for speculative builds is very difficult (if not impossible) at the moment due to limited exit routes for the lender. However, for the right deals, at sensible loan to values and where the underlying security property is good quality with good rental demand, they can still be funded at LTVs around the 65% mark, somewhat higher in tier one territories.

While some lenders are mainly biased towards the east coast or other tier one areas, the main objective is to build and sell, so it is important to build where the market is most active.

With this in mind, it's imperative that Brokers assemble a comprehensive package of information before approaching lenders. Presenting the full package to potential lenders in the right way is crucial in order to secure development finance for a client. Your package should contain the developers resume, an itemized accounting of how the loan proceeds will be utilized, financials on the business and the developer for the past 3 years, a summary of the project, rent rolls and projections.

All of our lenders emphasized that funding is very much dependent on the individual borrower's experience and circumstances. Most lenders will not consider a proposal where the client does not have good experience, and that must be of buying, developing and selling, not just of project management or building experience.

The best advice for brokers is to have relationships lined up and ready so that when they find a borrower, the deal can move forward quickly.

We're often told that it's rude to talk about money with other people, and so, we refrain from asking things like how much a person earns every month, how much their cars and houses are, and how much they gave as down payment for their new home, although asking for the prices of consumer items are perfectly fine. We're also not supposed to talk about how much money we already have or don't have, and are expected to be able to handle our own finances.

But things have changed, and it's no longer easy for many of us to just keep track of our spending and earnings just like that, especially since there are a lot of investment vehicles and expenses that should be factored in. People have gone beyond simply putting their money in the bank to putting their money to work by investing in stocks, mutual funds, foreign exchange. That's why enlisting the help of a financial planner is a good idea, especially if you have quite a portfolio to work with or are interested in building one.

Engaging Concord wealth management services to help you map out a solid financial strategy as well as assist you in diversifying your investment portfolio is a good first step to take, particularly if you're unsure as to how to begin and what the smartest methods are for your available funds. A professional will examine your assets and figure out the best way for you to maximize your earnings from the market, and even help you with estate planning.

Some people are under the impression that hiring a financial planner is something only the wealthy can do. The truth is, anybody can work with one to help them determine how to save more money and grow their investments. You don't have to keep one on retainer, but opt instead to work with a planner anytime you need one and pay an hourly fee.

Another service a financial planner could provide for you is Concord tax preparation. Tax season causes quite a lot of headache when it rolls around, and you will need help in figuring out exemptions, deductions and other details.

Getting financial advice is a good move nowadays and could help you save a lot of money, and maybe even make more. The key is to work with a professional who truly understands your situation and will be able to provide sound advice that is suited to your assets and investment goals.

100% financing is still available in the mortgage market. I know, you listen to all the financial doom and gloom from the media and you would think every lender just locked their doors and went home. It's not a good situation but it is not as bad as the media wants you to think.

Remember, it is also an election year and every election year, both political parties talk about how bad the economy is until we believe them. Then one is elected and they save the day, ... and the economy. Don't ya just love it!!

Here is a news flash. People are still buying homes. Yes, mortgages are available and everyone should realize that this is the best time to invest, or purchase a home. (When the price is low.) Have you ever heard the term "A Buyers Market"? That is what we have here.

History shows that Real Estate sales and our economy run in cycles. Back in the late 70's and 80's it was a 4-5 year cycle. You could graph it. Then, when the sub-prime loans were forced on lenders (mid to late 90's) by government regulation the cycle changed. They became longer and were more intense until it all caught up with us and here we are, like it or not.

I don't like it either but more than that I am tired of the finger pointing and blaming, and dreading, and media hype. I don't believe a "bail out" is the answer but obviously, it is not my choice or yours, or we the people's choice. Our elected officials will make the decision and base it on "no stronger ground" than what you and I would base our own opinion on.

All right all ready! So do it, what ever it is, ... so We The People can get over it and move on. We have been through worse times and we will survive and prosper. I think it is in the DNA of the USA. (sorry, that was really bad) We survive in spite of the people we have elected to office.

If you must have 100 Percent financing it is available, ... just not in the form of previous no-doc, no-verification sub-prime loans. You have several options. FHA, VA, Rural Development, or special products based on perfect credit and stability. The USDA Rural Development product is one that few remember or know about.

USDA Rural Development has two mortgage programs: Direct and Guarantee. The Direct program is a mortgage provided directly though the rural development office and your income can only be 80% of the median income for that area.

The Guarantee program on the other hand is provided by USDA approved lenders and Broker originators. It is a guarantee program, there is no subsidy or recapture, and the income restrictions allow up to 115% of the median income after special adjustments.

This is a 100% LTV mortgage based on the APPRAISED value, not the purchase price. The credit guidelines are very flexible and the guidelines have no minimum buyer commitment and no maximum for seller concessions. Note: some lender policies may be stricter in this area. USDA will always respect the lenders prerogative.

OK, so let all of us get over the failure of our market, roll up our sleeves and move on to a brighter future. Remember, NOW is the best time to purchase, during a buyers market!

Going to college is like a never ending adventure. Of course that dealing with professors, difficult exams and sleepless study nights is not always pleasant, but is indeed very rewarding. I remember when I was a student years ago, my parents used to tell me those were the best years of a person's life. I would roll my eyes at their stupidity and move on with my extremely busy life. Now that I look back, I cannot help thinking that they were completely accurate.

Spring break is actually one of the greatest ways to enjoy college years. You can travel and get as far away as you can from your student responsibilities. But what if you really cannot afford to go away this year? Do not fret, there are some ways to obtain money for this trip without affecting your finances!

Golden Rule: Do Not Touch Your Loan Money

As tempting as it may seem, it will be a terrible idea to use money from your student loan to pay for this spring break trip. Not only will you regret it later on (probably the minute you return to your normal college life), but you will also be paying interest on that sum of money in the upcoming years. Fight temptation as hard as you can and continue reading, there are ways to finance this trip which do not include money from your student loan.

Save During The Year

You wish it were as easy as it sounds, do you not? Well, it is not too difficult either. As a starving student, your parents and grandparents must send you money regularly. I am not talking about exorbitant amounts, just the necessary amount for you to buy your own stuff. Why not try to save some of that money for your spring break holiday? No matter how low will be the sum you will end up with, it is always welcome. You can also put aside your tax returns or your birthday earnings, be creative!

Get A Part-Time Job

I know it sounds awful, but why do you not give it a shot? You might end up enjoying the experience. It does not even have to be an extremely well paid or time consuming job, you are not looking to finance your education with this money, just part of your trip.

Find Discounts

You can use your parents frequent flyer miles to obtain a cheap, if not free, plane ticket. Search online for hotel discounts or food discounts, grab anything you can find, I promise it will definitely come in handy. Student ID cards usually offer price cuts on bus trip passes and airfares, check them out. Contact your local student travel agencies for more information.

If All Else Fails

Sometimes no matter how hard you try, traveling far away will not be possible. If that is the case, why not organize a road trip? All you need is a car, some noisy friends and available food. Arranging a trip home can also be a good idea, meeting your family is always comforting and it will probably give you some time to get back in touch with your roots, get together with old friends and reconnect with your relatives.

Money is on most everyone's mind. A couple of years ago, a man cashed in on a large load of options and became a millionaire in one day. He explained how he never realized how much he thought about money every day until he had enough that he would never have to worry about it again. Now he says he gets all kinds of work done and has had a burden lifted that he had never known how much he suffered under!

This story illustrates a common theme for many people because many people are under the yoke of money. Maybe even you worry about it, think about it, ponder over it, avoid it by ignoring the last three month's of checking account statements and not bringing your balance up to date, or simply hope the problem (overdrawn statements, credit card balances) just go away. And even though you know it's not the best way to handle finances, you may still do it anyway.

Fortunately, feng shui has ideas and remedies that can help create more energy (read: money) to get your finances flowing again. Try these ideas to see if you can't stimulate more prosperity!

o What's in your wallet?

Old scraps of paper, credit cards for accounts you closed two year ago or for accounts you never use? Toss them. And if your wallet is shot, invest in a new one. If you can, select a red wallet to really energize your finances. These are the most auspicious and excellent for generating more money.

Next, be sure your wallet is clean, neat, and organized. If it is close to the start the New Year consider buying a new wallet. Maybe you could request one as a gift every year when the holidays roll around. Make it a part of your standard gift list for holidays or birthdays.

o Clean out old financial files.

Old energy keeps new energy from coming into your life. Do you have old financial information hanging around? If you are hanging on to credit card statements from five years ago, you are probably holding on to too much old financial energy. Usually, items older than 5 years are considered safe to toss. Of course, you shouldn't get rid of old IRS statements! Use discretion when cleaning out your files and consult your accountant if you have questions.

o Be neat and orderly.

Organize your bills and put them in one place. Make it easy and efficient to pay your bills. It's just common sense and good feng shui. And don't just wad money up in your wallet. Treat it with respect and put the bills in there nicely.

o Declutter.

One of the most important things you can do for your finances is simply to clean up. Throwing out junk and getting rid of things like excess paper, empty boxes, and broken items can go a long way toward energizing your home for prosperity. In particular, declutter your SE corner of your home, of your living room, and of your bedroom. This is the wealth sector and if it has piles of junk, then financial chi can't circulate.

o Enhance your prospects.

What direction is best for inviting more opportunity (read: get a better position and earn more money)? See below.

Kua NumberCareer Direction

1North

2Southwest

3East

4Southeast

5 MenNortheast

5 Women Southwest

6Northwest

7West

8South

Not sure about your Kua number? Go to The Red Lotus Letter Kua Calculator to find out what your KUA number is. Make sure you look at the directions above. If possible, make it so your desk faces the SW, is that's your direction. Don't put your back to it, look in this direction.

o Water, water, everywhere.

Well, not everywhere...only in certain places, really. Water equals money. No water, no money. Consider an aquarium in the North sector of your house, provided it isn't a bathroom or bedroom. Don't want an aquarium? Fine, put a painting or print of water, a waterfall, an ocean scene, a picture of turtles or fish....

These are all fine representations of water. Or, if the North is out your front door, paint it black. This is incredible feng shui and one of the few western-style feng shui tips that works especially well. If you paint the door black, consider painting the shutters black too!

Another good water option is to display sailing ships. Display the ships, either in paintings, prints, or figures as sailing into the front door. Those that are not in rough seas are best. Sailing ships represented commerce and were often laden with all manner of precious cargo. In the US, you can often find ship figures at craft stores such as Hobby Lobby or décor stores such as Tuesday Morning and Kirklands.

Why go to this trouble in your North sector? The north represents opportunities and career. If your career advances, most of the time, your earning power does, too. This is why you want to make sure your North sector is well cared for. Gold objects (such as brass items) in this area are also extremely auspicious. Even if your kua number says your success direction is Southwest, I would not miss an opportunity to bolster my North sector. Be sure to enhance both sectors.

o Get more green.

In the Southeast (SE) wealth sector, that is. Put a grouping of 4 plants of varying heights together in the SE corner of your home. If this is a bedroom or bathroom, put them in the SE corner of your living room. Try to select a jade plant as one of your grouping.

These plants are excellent feng shui, provided the plants are attractive, healthy, and well-cared for. If not, these are very bad luck, indeed. If you want, you can use silk plants, but real ones are best. Don't forget to energize the SE corner of your living room with a beautiful plant. Put this plant in a basket or brass planter.

Don't forget Dragon Power! Display a green dragon in the East and Southeast for improved income. You can usually find these online or in Chinese or Asian emporiums or markets. Wall hangings or figures of dragons are equally good.

Avoid having metal in the SE sector of your home or living room because the SE represents small wood (growing chi) and metal cuts wood. If the SE has a toilet there, put a large rock in the bathroom and tie it with a red ribbon. This will "press" down the negative energy of the toilet.

o Get financial backing.

Just like putting a mountain at your back in the form of a picture on the wall will help you get more management support from bosses or superiors, a picture of a financial institution can give you good "financial backing."

Get a picture, poster, or painting of a bank, Wall Street, or other financial institution, and hang it so that it is at your back. Even bars of gold or sheets of money would be good here. This is especially good feng shui if you own a business! Put this artwork behind your register or your desk.

o Check your financial thinking.

That's right, how you think about money is important. There are lots of books that can help here. Some of the best for addressing the mental side of money are Suze Orman's. Did you know couples fight more about money than they do sex or children? Money is extremely personal and people get very uncomfortable talking about it.

Do you have "poor" thinking?

Do you believe that there is never enough to go around or that you don't deserve success and financial security? You should really take a close look at your financial mindset. Consider investing in some books that address your "money mind" -- because your attitude is often the source of financial difficulty.

Maybe you just need more

Many times people think that to gain more money they have to continue to find ways to cut expenses, rather than find new sources of income. Sometimes that means finding a new job, asking for a raise, getting a rental property, or taking a small part time job to bring in more money. Consider if there is something you can do to earn more rather than cut out more from your budget.