finance equations

No matter where you live, a home is a basic requirement and a necessity for life. Sadly, no necessity is available free of cost. If you want to buy a home, you need a home loan. Don’t think applying for residential financing is difficult. It’s simple when you read this article. It includes answer to the most common questions asked by home buyers.

1 – What Type of Residential Finance is available to you?

Today there are several types of loans in the field of residential finance.

• Owner Occupied Residential Purchase

• Residential Investment Purchase

• First-Time Home Buyer

• Renovations, Extensions and Construction Purposes

• Refinance of your Existing Loan

• Debt Consolidation of your Existing Home Loan Debts

• Home-Equity/Cash Out purpose

• Restructure your Home Loans with Current Lenders/Credit Providers

2 – What are Features of Residential Finance?

Each lender/credit provider offers different interest rates and finance/loan conditions. Residential loan packages often incorporate many of the following options and features for you to consider:

• Variable or Fixed Rate Loans

• Interest Only or Principal & Interest Loans

• Combination (Split Loans)

• Line of Credit

• Offset Account

• Impaired Credit History

• Redraw Option and Access Availability

• Non-Conforming Loans

3 – What is Home Equity/Cash Out? How can it benefit you?

A Home Equity/Cash Out can unlock relatively large amounts of money for borrowers who want to borrow against the value of their home or property. More and more consumers are finding this type of finance arrangement to be very attractive. Such loan programs are very easy to qualify.

The concept of how Home Equity/Cash Out works for you is best explained by the following illustration. The illustration also assumes that you have an existing residential finance loan on your home or property:

The value of your home or property is valued at: $800,000

Less Your current home loan balance owing: $350,000

Your home equity amount is: $450,000

From the example illustrated above you can clearly see that you have $450,000 equity in your home or property, which you can use to:

• Buy your second or third investment property

• Invest in shares or managed funds

• Renovate, remodel, or otherwise improve your existing home and property

• Purchase vacant land and construct a new home on the vacant land

4 – Why Pre-Approval is better in Residential Finance?

With a pre-approval, you will have the peace of mind knowing that:

• You have a clear picture of what your borrowing limits are

• Your finance request has already been pre-approved and you will know the conditions of your pre-approval

• You have the upper hand when negotiating the sale price with the vendor, real estate agents, etc.

5 – How to get Lower Rates on Residential Finance?

Getting lower rates on home loans is very simple. Take help of the internet. There are many online companies that provide residential finance opportunities. Because of heightened competition in the financing market, lower interest rates are offered. Also, web companies offer faster approval because of their online nature of business.

So, these are the questions that often trouble other home buyers. But, now that you have answers to them, finding an affordable residential loan will be easy for you.

Receivable financing problems grow out of the need for a businesses inability to grow cash flow as you run and grow your business. One strategy we recommend to clients is to grow cash flow and ‘ lose money’. That’s not a trick statement of course, and when business owners understand several forms of receivable finance
via invoice factoring can solve their challenge they want to know more. Let’s dig in!

A/R financing is a source of working capital – it’s not debt or a loan per se. In technical terms it’s the sale, or ongoing sale of your A/R generated out of your sales. That transaction is accomplished via a ‘ discount’ basis, typically in the 1 to 2 per cent per month basis if you’re on top of your collections. That’s where ‘ the loss’ comes in – it’s a financing cost but at the same time has delivered all the cash flow you need. Suffice to say your business should be able to handle that 1 or 2 per cent drop in gross margins with the result being – Cash Flow!

Invoice factoring allows you to run and grow your business, sell more by taking on being orders and contracts, and also has the unique ability to allow you to negotiate solid supplier prices. Why? Because you have the cash!!

This form of receivable finance is used by almost every industry in Canada. Even those Bay Street boys use it also – they apply a fancier name – Securitization.

What then are two major benefits of this method of Canadian business finance. It’s simply the ability to get a cash advance on your sales and of course the quick turnaround- typically 24 hours! Bottom line – pretty well same day funding

Yes factoring is more expensive than Canadian chartered bank financing = that’s the perception. But that must be balance against the hard reality that thousands of businesses do not qualify for all, or even some of the cash flow financing they need. And when you’re carrying a/r 60=90 days even that bank credit line doesn’t help.

The best form of account receivable cash flow financing? We call it Confidential A/R Finance – You bill and collect your own receivables, reaping the benefits and eliminating disclosure.

We’re open enough to say that the majority of firms who in fact entertain receivable factoring can’t get financing elsewhere, particularly at their bank. But don’t forget also that many instances involve firms such as yours who are growing too quickly or who have landed that ‘ big contract’ or order.

It’s at this time that business owners appreciate the fact that their net worth, profitability, debt coverage, or operating losses aren’t under the microscope anymore. And your firm is free to explore other methods of debt financing outside your A/R assets.

Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success in this key area of Canadian corporate finance.