Small business owners all across America are looking at their bottom lines and asking "Where is my bailout". This is the common response to the choice by the United States Government to dole out hundreds of billions of dollars to failing banks at the end of 2008 and now into 2009. Very smart business men and women are looking at the bottom line and asking lots of questions. One of the most common questions, and one not often answered by the news media is "Why aren't the Banks Getting Loans Instead of Handouts". Believe it or not, the logic behind the choice to give the money rather than loaning it is quite flawless. The reason the press doesn't give you the answer is that the answer is a well known cure for insomnia. Up late? Read on!.
When most business people think of banks, they think of business in a linear fashion. Product or service costs X dollars and after mark-up, consumers buy the product for Y amount. It's easy to mistake banks as falling into the same category, especially when they ding you for using outside ATM machines, monthly service fees, multiple fee fees, and etc. The list goes on. The truth of banking, however is that banks are not in business to service accounts. They are in business to loan money. .
In "It's a Wonderful Life" during a run on the bank, Jimmy Stewart's character explains that he doesn't have the cash on hand to pay out all of the bank accounts of the account holders. Their money is spread into things like the loans on each other's houses and businesses. What Jimmy doesn't talk about is a thing called "Money factoring".
Money factoring is very complicated and runs on a variety of algorithms, regulated by a lot of policy and more law than you even want to think about, but the concept is simple enough to grasp. Money factoring essentially makes it possible for banks to borrow a multiple of their on-hand assets from the Federal Reserve, a private enterprise that most people errantly assume is owned by the United States Government.
How would a bank evaluate Bill's loan request? ... Why? ... Finally, the business owner gets all the bigger piece of the pie in the event of a business exit instead of having to share the goodies with investors who may have invested in the business. ... A good and well written business plan will go a long way to influence getting bank loan. ... Why? ...
Instead of reporting on an overhaul of an exchange, we chose to research the overhaul of the banking system of China. ... The government estimated that more than 20% of China's state bank loans were non-performing (180 billion) and of this 20%, 5%-8% would never be recovered. ... By doing this, the central bank tightened its grip on non-performing bank loans by making it more difficult for local governments to interfere in monetary policy. ... They managed to cut problem loans to about 10 percent of outstanding loans by August, 2000. ... The Central Bank has also taken care of the pro...
Share of Gross Loans Local banks in 1989 contributed about 81.7 percent to total loans of all commercial banks in Ghana. ... This gives an indication that local banks tend to support local businesses through loans than the foreign banks. ... The figure represents what the bank thinks is sufficient to cover losses on its outstanding loans. ... The ratio of loan loss provision (LLP) to Gross Loans represents the credit risk of the industry. ... The loan loss provision/Gross Loan ratio improved somehow for both sectors but with the foreign sector showing better results. ...
Repayment of a student/bank loan Repaying a loan from a bank or institution other then the Credit Union is a similar process, but there are some differences. ... Usually your Student Loan repayments are taken directly from your bank account, but if you have two different loans, for example a Nova Scotia Student Loan and a Canada Student Loan, that are at different banks you must keep in touch with both. ... You must be a full time student in order to get your loan signed. ... After narrowing down which bank had the most conventional setup besides the Credit Union, it seems the Royal b...
This paper is going to analyze and compare the financial report of two banks; the US Bank and the Bank of America. ... The main types of risks that the banks encompass are the interest rate risk and the credit risk rate.[ CITATION Vin14 l 1033 ] The interest rate risk is the risk involved with the paid interest on deposits as well as the loans received overtime. On the other side the credit risk is the possibility of the money borrowers defaulting on any lease or loan that will lead the banks to undergo a loss on any interest earned as well as the principal amount that was loaned to the borrow...
A commercial bank's loan portfolio requires careful planning especially as the risk-return profile varies from one loan product to another. ... Lending Portfolio of a Commercial Bank The lending portfolio ratio of a commercial bank is Motor Vehicle Loans - 30% to Mortgage Loans - 40% to Credit Card Advances - 30%, which I am of the opinion is reasonable. At present, the bank is faced with a spike in demand for car loans which has impacted its overall lending portfolio. ... For most banks, loans are the largest and most obvious source of credit risk (Comptroller's Handbook, 1998). ....
Purpose: Why should we go to college? ... Ex: financial aid, scholarships, grants, and loans And there is always pay out of pocket. ... Even people who arent as well known as them have gone to college and live comfortably IV. ... It could also put you in debt due to loans. ... To prove my point of why you should go to college, here some reason why Im here. ...
Most of the angst over the hundreds of billions of dollars being granted to banks in the great bailout of "08 and "09 is the mere fact that we the people are getting tired of making the rich richer while we all get poorer. So in order to grasp why it is that a Federal Bailout of the banking system was required and in order to get okay with the fact that it's going to cost us a lot of tax revenue, we need to have some sort of assurance that the fat cats aren't merely getting fatter on the deal. ... This makes it harder, going forward, for people to get loans, but it also insures that ...
If they are not caught immediately, a victim could lose job opportunities, be denied new credit cards, house loans, car loans, or even test driving a car. ... The charges are rung up and the credit card bills are never paid and your good name gets reported as delinquent. They also write counterfeit checks and drain your bank account. Some thieves will buy cars taking out loans in your name and some have even gone as far as taking out a house loan in your name. ... Whenever you are approved for a credit card, cancel a credit card, apply for car loans or house loans, it's in your credit...