Archive for the 'Financial Services' Category

By Steve Bush

Much like the perfect storm, the worst case scenario for borrowers seeking commercial real estate loans and small business loans is not a situation that most people should want to actually experience. There are several elements that we believe will almost always produce this serious but avoidable result when they are all present simultaneously. Understanding each of the issues should enable borrowers to avoid a potentially devastating commercial funding outcome.

We have prepared separate reports that discuss each underlying factor in detail. Here are the issues which we believe will usually result in a worst case scenario for commercial loans if all five are present: (1) Using a lender which historically has an unacceptable track record for successfully completing commercial loans; (2) Dealing with an inexperienced commercial finance advisor; (3) Obtaining business financing that includes a recall option for the lender; (4) Short-term financing in which a borrower is not also offered the opportunity to lengthen to a longer-term period; and (5) Inappropriate and non-competitive loan terms.

There are likely to be many business financing scenarios where it will be impractical to avoid all of the issues described in the preceding paragraph. Our primary advice is to totally avoid circumstances where all five factors exist at the same time. A secondary recommendation is to also seek alternative financing for small business loans and commercial real estate loans when either of the first two elements are present.

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It is clearly not our intent to raise a red flag without suggesting a path for minimizing the potentially problematic circumstances summarized above. It is important for business owners to secure commercial financing which is not impacted by the worst case conditions. Two points deserve special emphasis.

First is our observation that the worst case scenario for small business loans described above is totally avoidable. But if you want to avoid an obstacle, it is critical that you have a working understanding of what you are avoiding, what it looks like and any special techniques required to evade it. For example, if you are driving a car, it is common sense that you will not intentionally drive your vehicle over sharp pointed objects that are likely to puncture your tires.

With commercial real estate loans and commercial loans, the combination of the five factors noted previously in this article will typically produce an impact for small business funding that is equivalent to much worse than simply puncturing a tire. Unfortunately, without proper advice and knowledge, most business owners will not be prepared to recognize the appropriate warning signs for avoiding business financing hazards.

Our second point to emphasize is that small business loans are more complex than most borrowers realize. There are a number of additional serious commercial funding obstacles beyond those noted in this brief article. Because of this, it is important for commercial borrowers not to narrowly focus on the factors included in the worst case scenario discussed here and simply avoid these specific issues. A comprehensive approach to working capital management should incorporate a balanced analysis of both the worst case aspects and other critical business finance terms.

About the Author: Steve Bush is a

small business loans

expert – learn how to avoid mistakes with

commercial real estate loans

and learn about strategies for business cash advances and commercial loans at AEX Commercial Financing Group =>


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By Simon Volkov

Annuitants wanting to sell structured settlement payments must first determine if this practice is allowed in the state where they reside. Approximately 34 states prohibit the sale or transfer of annuity payments. States which do allow the practice limit the number of annuity payments sold and require Annuitants to obtain court approval prior to the sale.

Annuitants choose to sell structured settlement annuities for many reasons. Some need a lump sum cash advance to fund college tuition, start a business, or pay off outstanding debts. Others want funds for investment purposes such as buying real estate or cash flow notes.

Courts typically frown on requests for selling annuities; particularly if structured settlements were awarded due to serious injury. Injury-based structured settlements are established to ensure Annuitants receive adequate funds to cover living expenses and ongoing medical expenses. Courts are not eager to allow Annuitants to cash-out future payments unless there is substantial proof the sale will positively impact the Annuitant’s life.

Structured settlements are also used to compensate jackpot lottery winners. When individuals win mega-millions they can opt for a lump sum cash payment or annuity payments. When lottery winners accept lump sum payments they receive considerably less money than winners who elect an extended payout. Courts are more open to authorizing the sale of structured settlements used for lottery payouts than those used for injury compensations.

Structured settlements are also used to distribute inheritance funds provided in an irrevocable life insurance trust (ILIT). Courts can swing either direction when Annuitants seek permission to sell inheritance funds. Much depends on how the ILIT was established. Courts respond more favorably when annuity payments are distributed annually vs. being distributed when Annuitants reach major milestones.

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Regardless of the reason structured settlements were established, it is best for Annuitants to obtain legal counsel prior to seeking court approval.

Annuity payments are backed by life insurance companies. When Annuitants sell partial payments they must transfer payment rights to the funding source. Once court authorization is obtained, Annuitants must also obtain approval from the life insurance company.

Annuitants must provide the insurance company with contact information for the funding source, along with the number of payments to transfer. Life insurance companies are not required to approve transfers and are often unwilling to authorize the transfer of future annuities.

Annuity payments are sold to funding sources for a lump sum cash payment. Funding sources are generally private investors, investment companies, and cash advance providers. Some banks and credit unions provide cash for annuities, but the majority of financial institutions do not engage in this type of funding.

Funding sources do not offer full face value of annuities. Investors typically charge an upfront fee ranging between 20- and 30-percent of advanced funds. For example, an Annuitant receives $10,000 every three months and requires $100,000 in cash.

The Annuitant would need to transfer 12 to 13 payments to cover the full amount required, plus the funding source fees. The life insurance company would send payments to the funding source until the cash advance is repaid. Afterward, annuity payments revert back to the Annuitant.

The most common strategy for selling structured settlements is to sell partial payments. Courts rarely approve the sale of structured settlements in whole. The exception is for lottery winnings or if only a few years of payments remain.

The decision to sell structured settlement payments is a decision that should not be taken lightly. Annuitants should carefully weigh the pros and cons of selling future annuities. It is best to consult with a lawyer or tax accountant to determine if this is the best financial decision and to ensure proper protocol is followed.

About the Author: Author and investor, Simon Volkov has published an extensive article library focused on how to

sell structured settlement

payments and strategies for establishing structured settlements via his website at



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