Identifying a Good Equipment Lease Business Partner

Time and again, many business owners bravely face the challenge of financing the business, particularly with regards to purchasing equipment. Although banks offer business loans that can be used for financing equipment, getting approved is generally not that easy, especially if you have just started the business. It is a relief to know that that there are leasing companies that offer equipment lease financing, a wonderful option for big and small businesses in the industry. In this article, let us discuss pointers on how you can find a reliable business equipment lease company.

Not All Equipment Leasing Companies Are the Same

Different leasing companies offer different types of lease services. Some lessors exclusively provide service to certain types of industries. There are lease companies that offer leasing for specialized machines only while there are lease companies that act as a one-stop shop for businesses that need any kind of lease.

Lessors also have different standards in approving leases. Some leasing firms actually have more rigid standards than others, primarily when evaluating the client’s credit history. Then there are other lessors that offer special lease programs for new and start-up businesses. Thus, even without business credit, it still possible to get a lease.

The amount of lease financing offered varies from one lessor to another. Some leasing companies may provide a low lease (under $100,000) and some may provide a higher amount of lease financing ($100,000 and above).

A business owner must make sure that your chosen leasing company does provide service to the same type and scale of business that you manage prior to submitting application. It is important to look for a business equipment lease provider that offers flexible programs.

Searching for the Right Business Equipment Lease Partner

One way to find the right business equipment lease partner is to ask for help. Request for referrals from your personal contacts such as your business attorney, suppliers, banks and friends in the industry. Gather a list of potential leasing firms and be prepared to investigate what each firm has to offer. Make sure that you understand the specific lease programs offered as well as the list of requirements that you need to prepare.

The internet is also a great tool in finding an equipment lease provider. Check out websites of major equipment leasing trade associations in your State or country and find a list of recommended lessors that provide service to businesses in the same industry and scale as yours.

Choose your top three potential leasing companies and be prepared to do further evaluation. Don’t forget to check the leasing company’s background and reputation, the specific services it offers, the company’s ability to deliver, its relationship with customers and the prerequisites in applying for a lease.

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Business Acumen – Buying Out a Small Business Partner

Looking for buying out a partner generally refers to businesses searching for information on how to purchase the shares of another partner. Partners may decide to leave a business if they are retiring, relocating, or otherwise can no longer take part in the business’s activities.

The first step in buying out a partner is to determine how much the partner’s shares are worth. This can be determined a number of ways. Value could be based on the market value of the company, the amount invested by the partner, or a pre-determined price detailed in a partnership agreement.

The next step when looking to buy out a partner is to find capital to finance the buy out. Though most lending institutions do not provide loans specifically for buying out a partner, they do offer loan programs that can be used towards any general business purpose. Most buyouts require large sums of money, and to apply for a large loan, lenders usually require personal and company financial documents, a business plan, and credit reports. Collateral is also required for secured loans, which can provide lower interest rates than unsecured loans.

If a business is looking to replace a partner, it may be able to obtain funding from an investor. Partner investors contribute large sums of capital in exchange for a portion of the business’s profits and a voice in the business’s decisions. In the case of buying out a partner, an investor could purchase the shares of the leaving partner and become part of the business.

Small business buying out partner usually refers to small business owners searching for information regarding buying out another business partner. Partners may wish to sell their shares of a company when they retire, relocate, or otherwise can no longer take part in the business’s activities.

The first step in buying out a partner in a small business is determining the value of the partner’s shares of the business. To resolve this problem, many businesses with two or more owners create and sign a partnership agreement that predetermines the value of every owner’s share of the business. For partnerships that do not have an agreement like this, the value can be determined by looking at how much the partner invested in the business or how much the business is currently worth on the market.

Once all partners have agreed on a selling price, the owner buying out must find financing. Most lenders don’t offer loans specifically for buyouts, but their loans can usually be used for any business purpose. Buyouts typically require large sums of money, and lenders have more extensive requirements for large loans. To get a lowered interest rate, many borrowers use personal or business assets to secure the loan.

Another source of financing for a small business buying out a partner is another investor. If a business owner can find an investor who is willing to purchase the other partner’s shares, then the owner will not have to take out another loan. The business owner simply gets a new partner to work with.

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QuickBooks Enterprise – Your Business Partner

Are you a business leader? A financial manager? An IT manager? Holding a management position of a company is not an easy task. If you are in such a position, what you need to help with your tasks is a program like QuickBooks Enterprise.

What is QuickBooks Enterprise?

o it is a finance-oriented software designed to provide automated accounting and business management practices for businesses.
o The program is offered by business solutions provider Intuit.
o It can help you expedite your various business processes such as inputting sales, recording expenses, tracking tax payments, processing purchase orders, managing payroll and inventory, and preparing business documents such as invoices, reports, and financial statements.
o With this software, you can do all your business processes online but without deviating from your actual processes. In a nutshell, the QuickBooks Enterprise can hold your entire business in one reliable and accurate program.

The QuickBooks Enterprise Solutions Package

The basic Enterprise of this program also integrates with a series of other useful functionalities that make up an overall this Enterprise Solutions package, which includes:

o web-based features
o remote tracking capabilities
o integration with third-party providers such as:

1. Google Maps for remote mapping
2. Outlook Express for e-mail connectivity
3. Microsoft Excel for various recording needs

Aside from that, the package includes other key factors that make up the overall strengths of the QuickBooks Enterprise offer.

o Flexibility. This Enterprise Solutions are designed to run on Windows, Mac, and Linux computers. So whatever system your company is using, you can easily insert the Quick Books Enterprise into the process.
o Ease of Use. The program, though highly functional and full-featured, is affordable, exceptionally user-friendly, and streamlined, so it is easy and economical to maintain and operate unlike other more complex systems that can be quite taxing for you to operate.
o Customizable. Availing of the QuickBooks Enterprise Solutions package gives you access to a free needs assessment procedure to check whether the program can work for your business.
o Capable. this system can be used by up to 30 users simultaneously. It is also capable of tracking up to 100,000 inventory items, customer purchases, and vendors.
o Up-to-Date. The package also automatically affords you with special upgrade packages and data conversion in case you need to switch from other systems such as Net Suite, Microsoft, Timberline, Oracle, SAP, Acc Pac, Peachtree Quantum, Dac Easy, and so on.
o Supportive. You can also avail of additional products and services such as remote hosting, consulting, and bookkeeping.

Why QuickBooks Enterprise is No. 1

There are several business and accounting software that work similarly as the QuickBooks Enterprise package, but QuickBooks is a leading program mainly due to its flexibility and upgrade capability.

Thus far, QuickBooks Enterprise is the number 1 business-oriented solutions software, especially in the market segment comprised of mid-range firms with up to 50-500 employees. The system is now in use in more than 50,000 companies, most of which are mid-size companies at the peak of their growth who would like to capitalize on the massive growth level of their business by entailing the help of QuickBooks.

If you are running such a business or company, having the QuickBooks Enterprise on your side will definitely make it easy for you to manage your business efficiently and further the growth of your business.

With such a system in place in your company, you, as a business leader, can easily determine the state of your business and keep all your business records in check. You can be sure that all your business documents are accurate and organized, as well as every business transaction recorded well. The streamlined and efficient system can also save you a lot of resources, such as time, labor, and money – savings that can translate to profits. You can help cut down costs and keep your business in top shape all the time. Having the QuickBooks Enterprise around is just like having a business partner.

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How You And Your Business Partner Can Avoid Needing A Rescue

I love what I do as the Rescuer of business partnerships. But like a dentist who teaches you to brush and floss to prevent the dreaded cavity, I prefer to prevent the need to be rescued and can do so if I have been consulted early in the game. Nevertheless, I am very good in my role as the Rescuer.

How does a partnership get to the point of desperately signaling for help?

Over time, sometimes even from day one, partners don’t discuss the basics that will not only ensure their relationship is successful, but set the tone for the success of the business as time goes on. A business partnership is much like a marriage. When you meet that special someone whom you’re hoping to make your lifelong partner, you date for a while before taking the next big step: marriage. The reason for dating is to see if you connect with someone and if you want to continue with second, third, and so on, dates. But as things progress, you’re faced with the bigger picture and some very important questions: Do you share the same values? Do you have the same vision of how and what you want your lives to look? Do you have personalities that meld? What attitudes and habits do you each have that will coincide or need adjustment and compromise? What are your attitudes about finances and work? How will you divide the work that needs to be done at home?

So before the dress shopping and cake tasting ensues, these questions and many more should be shared until you can be sure whether or not you are a match.

The search for a business partner is very similar to searching for a spouse. In both circumstances, finding a match is only phase one. No, you don’t have to discuss how many children you want and whose house you’ll attend for the holidays, unless, of course, your business partner is your spouse. But there are many issues to discover about a potential business partner, maybe even more, when it comes to the details. You will probably spend more time with your business partner than with your spouse. So how does this lead to me being called to the rescue? For whatever reason, potential partners get very excited about the business and their respective skill sets and think that’s enough. Then they jump into the “marriage” like two lovestruck teenagers who just turned eighteen. The excitement usually lasts through the honeymoon period, but troublesome things are already happening. Personality quirks begin to annoy, a bad business decision is made, or a disagreement remains unresolved. Rather than face them, the honeymooners prefer to look the other way, shove them under the carpet, and avoid the so-called confrontation. Eventually, the annoyances fester into full blown resentment. The avoidance becomes the way of doing business with each other. The decisions not made early on, the memory of who said what at the outset, and the misunderstandings about all of it prevail.

The result of this non-communication with underlying bad feelings affects many people beyond the partners and, of course, the bottom line too. If you don’t regularly look at, discuss, and plan your business it cannot function at its highest potential and at the very least money is being left on the table.

Employees who pick up on the tension are affected and sometimes take sides without even knowing the issues. Others affected by this scenario in a big way are investors, customers, and families. Chances are the partners are stressed, angry, and worried; all of which they take home to the couch with them. And that’s when I get the phone call or email asking for the rescue.

What I do from our first session on is lower the volume of tension and emotion between the partners. If they didn’t let the bad feelings get beyond repair to a situation where they have one foot on the courthouse steps, but rather are committed to making it work, I can orchestrate a rescue. What happens within 1-3 sessions is that we get to the point where they rediscover that they are not so far apart in their desires, dreams, and goals. Using the tools I created for successful partnerships, especially the Business Partnership Agreement Template and the What Ifs Scenarios Handbook, we can restart the romance and fill in all of the gaps created by the discussions and decision making that didn’t occur in the beginning. We then are able to gather the tools of communication, set up an infrastructure, and schedule regular meetings that are en pointe.

There are decisions to be made at both the micro and the macro level, and setting it up for the successful continuity the partners desire is my job as the Rescuer. And I love my job.

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The Wrong Business Partner Can Create Lifetime Pain

People select a business partner for a variety of reasons. It may be that one partner brings the required financing or a degree of expertise the other does not have or a group of individuals tackle a new business initiative together.

Regardless of your reason for seeking and selecting a business partner its important to be on the lookout for the right mix. The care business – the task of serving humans – is different! You need someone you can work well with and who shares your ideals so here are a few types you may want to avoid.

The Money Grubber

Some individuals, including those who enter the care business – assisted living, home health care, visiting physician practices – are not people centered at all. Their vision does not extend beyond the receivables and they have little to no concern over the delicate, emotional issues affecting those they serve. They take little time to encourage, uplift, inspire or dignify others.

So if you are people centered and among those who have the maturity to balance the financial with humanitarianism then you want a business partner with the same ideals.

The Envious

Remember the difference between the jealous person and the envious person. The jealous person may resent your advantages, perceived or real. The envious person resents them and wants to strip you of them. This is an incredibly dangerous personality type.

This is the person who after a few weeks of operation is suspicious, for no good reason, about what compensation you may be taking from the business. They do not inquire, they accuse. If you have other sources of income they want to know what they are and how much money they represent.

They are often prisoners of their own insecurities and have the spirituality of Judas Iscariot himself. You will want to watch for this type of person who wants to be your business partner.

The Power Nut

This is the person who regardless of what duties are assigned to them – which they accept – prefer to demonstrate the authority they feel being a business owner should bring. Maybe they want to boss employees who do not directly report to them or they undermine certain decisions made by the partner who has the authority to make them.

If this person does not respond to reason, confusion will settle in and the progress of the business will be compromised.

The Perpetually Ignorant

Everyone who enters into a particular business model is not always super literate in everything that business involves. This is why we have consultants all over the place. However, if you enter into a business model which is new to you it is up to this new partner to investigate the regulatory and operational apparatus affecting that business type.

Some clearly do not invest the time into learning all that the business model involves.

They do not use the internet or available resources from the state of operation. They ask questions months into the partnership they should have known well by now. Some even use ignorance as a basis for feeding both insecurity and fears they create.

Learn how curious a prospective business partner is to learn the business model and not just sit around hoping they can collect a new income. If you discern they are not sufficiently curious this might not be the partner you need.

The Weak Minded

How often have you talked to the person who has all the answers their friend told them were true about your business plan and the information they pass along is as far from reality as you could have ever imagined. It happens everyday.

Some cousin, friend from across the world, etc. who needs to prove they have this person’s best interests at heart feeds them all of this garbage and you have to come back and clean it up. Problem is it is already fact in this person’s mind and their being weak minded will only bring you further grief. Its time to rethink this business union. You need clear, comprehensive, analytical thinkers, not followers or the work environment will sour often.

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Best in Class Finance Functions For Police Forces

Background

Police funding has risen by £4.8 billion and 77 per cent (39 per cent in real terms) since 1997. However the days where forces have enjoyed such levels of funding are over.

Chief Constables and senior management recognize that the annual cycle of looking for efficiencies year-on-year is not sustainable, and will not address the cash shortfall in years to come.
Facing slower funding growth and real cash deficits in their budgets, the Police Service must adopt innovative strategies which generate the productivity and efficiency gains needed to deliver high quality policing to the public.

The step-change in performance required to meet this challenge will only be achieved if the police service fully embraces effective resource management and makes efficient and productive use of its technology, partnerships and people.

The finance function has an essential role to play in addressing these challenges and supporting Forces’ objectives economically and efficiently.

Challenge

Police Forces tend to nurture a divisional and departmental culture rather than a corporate one, with individual procurement activities that do not exploit economies of scale. This is in part the result of over a decade of devolving functions from the center to the.divisions.

In order to reduce costs, improve efficiency and mitigate against the threat of “top down” mandatory, centrally-driven initiatives, Police Forces need to set up a corporate back office and induce behavioral change. This change must involve compliance with a corporate culture rather than a series of silos running through the organization.

Developing a Best in Class Finance Function

Traditionally finance functions within Police Forces have focused on transactional processing with only limited support for management information and business decision support. With a renewed focus on efficiencies, there is now a pressing need for finance departments to transform in order to add greater value to the force but with minimal costs.

1) Aligning to Force Strategy

As Police Forces need finance to function, it is imperative that finance and operations are closely aligned. This collaboration can be very powerful and help deliver significant improvements to a Force, but in order to achieve this model, there are many barriers to overcome. Finance Directors must look at whether their Force is ready for this collaboration, but more importantly, they must consider whether the Force itself can survive without it.

Finance requires a clear vision that centers around its role as a balanced business partner. However to achieve this vision a huge effort is required from the bottom up to understand the significant complexity in underlying systems and processes and to devise a way forward that can work for that particular organization.

The success of any change management program is dependent on its execution. Change is difficult and costly to execute correctly, and often, Police Forces lack the relevant experience to achieve such change. Although finance directors are required to hold appropriate professional qualifications (as opposed to being former police officers as was the case a few years ago) many have progressed within the Public Sector with limited opportunities for learning from and interaction with best in class methodologies. In addition cultural issues around self-preservation can present barriers to change.

Whilst it is relatively easy to get the message of finance transformation across, securing commitment to embark on bold change can be tough. Business cases often lack the quality required to drive through change and even where they are of exceptional quality senior police officers often lack the commercial awareness to trust them.

2) Supporting Force Decisions

Many Finance Directors are keen to develop their finance functions. The challenge they face is convincing the rest of the Force that the finance function can add value – by devoting more time and effort to financial analysis and providing senior management with the tools to understand the financial implications of major strategic decisions.

Maintaining Financial Controls and Managing Risk

Sarbanes Oxley, International Financial Reporting Standards (IFRS), Basel II and Individual Capital Assessments (ICA) have all put financial controls and reporting under the spotlight in the private sector. This in turn is increasing the spotlight on financial controls in the public sector.

A ‘Best in Class’ Police Force finance function will not just have the minimum controls to meet the regulatory requirements but will evaluate how the legislation and regulations that the finance function are required to comply with, can be leveraged to provide value to the organization. Providing strategic information that will enable the force to meet its objectives is a key task for a leading finance function.

3) Value to the Force

The drive for development over the last decade or so, has moved decision making to the Divisions and has led to an increase in costs in the finance function. Through utilizing a number of initiatives in a program of transformation, a Force can leverage up to 40% of savings on the cost of finance together with improving the responsiveness of finance teams and the quality of financial information. These initiatives include:

Centralization

By centralizing the finance function, a Police Force can create centers of excellence where industry best practice can be developed and shared. This will not only re-empower the department, creating greater independence and objectivity in assessing projects and performance, but also lead to more consistent management information and a higher degree of control. A Police Force can also develop a business partner group to act as strategic liaisons to departments and divisions. The business partners would, for example, advise on how the departmental and divisional commanders can meet the budget in future months instead of merely advising that the budget has been missed for the previous month.

With the mundane number crunching being performed in a shared service center, finance professionals will find they now have time to act as business partners to divisions and departments and focus on the strategic issues.

The cultural impact on the departments and divisional commanders should not be underestimated. Commanders will be concerned that:

o Their budgets will be centralized
o Workloads would increase
o There will be limited access to finance individuals
o There will not be on site support

However, if the centralized shared service center is designed appropriately none of the above should apply. In fact from centralization under a best practice model, leaders should accrue the following benefits:

o Strategic advice provided by business partners
o Increased flexibility
o Improved management information
o Faster transactions
o Reduced number of unresolved queries
o Greater clarity on service and cost of provision
o Forum for finance to be strategically aligned to the needs of the Force

A Force that moves from a de-centralized to a centralized system should try and ensure that the finance function does not lose touch with the Chief Constable and Divisional Commanders. Forces need to have a robust business case for finance transformation combined with a governance structure that spans operational, tactical and strategic requirements. There is a risk that potential benefits of implementing such a change may not be realized if the program is not carefully managed. Investment is needed to create a successful centralized finance function. Typically the future potential benefits of greater visibility and control, consistent processes, standardized management information, economies of scale, long-term cost savings and an empowered group of proud finance professionals, should outweigh those initial costs.

To reduce the commercial, operational and capability risks, the finance functions can be completely outsourced or partially outsourced to third parties. This will provide guaranteed cost benefits and may provide the opportunity to leverage relationships with vendors that provide best practice processes.

Process Efficiencies

Typically for Police Forces the focus on development has developed a silo based culture with disparate processes. As a result significant opportunities exist for standardization and simplification of processes which provide scalability, reduce manual effort and deliver business benefit. From simply rationalizing processes, a force can typically accrue a 40% reduction in the number of processes. An example of this is the use of electronic bank statements instead of using the manual bank statement for bank reconciliation and accounts receivable processes. This would save considerable effort that is involved in analyzing the data, moving the data onto different spreadsheet and inputting the data into the financial systems.

Organizations that possess a silo operating model tend to have significant inefficiencies and duplication in their processes, for example in HR and Payroll. This is largely due to the teams involved meeting their own goals but not aligning to the corporate objectives of an organization. Police Forces have a number of independent teams that are reliant on one another for data with finance in departments, divisions and headquarters sending and receiving information from each other as well as from the rest of the Force. The silo model leads to ineffective data being received by the teams that then have to carry out additional work to obtain the information required.

Whilst the argument for development has been well made in the context of moving decision making closer to operational service delivery, the added cost in terms of resources, duplication and misaligned processes has rarely featured in the debate. In the current financial climate these costs need to be recognized.

Culture

Within transactional processes, a leading finance function will set up targets for staff members on a daily basis. This target setting is an element of the metric based culture that leading finance functions develop. If the appropriate metrics of productivity and quality are applied and when these targets are challenging but not impossible, this is proven to result in improvements to productivity and quality.

A ‘Best in Class’ finance function in Police Forces will have a service focused culture, with the primary objectives of providing a high level of satisfaction for its customers (departments, divisions, employees & suppliers). A ‘Best in Class’ finance function will measure customer satisfaction on a timely basis through a metric based approach. This will be combined with a team wide focus on process improvement, with process owners, that will not necessarily be the team leads, owning force-wide improvement to each of the finance processes.

Organizational Improvements

Organizational structures within Police Forces are typically made up of supervisors leading teams of one to four team members. Through centralizing and consolidating the finance function, an opportunity exists to increase the span of control to best practice levels of 6 to 8 team members to one team lead / supervisor. By adjusting the organizational structure and increasing the span of control, Police Forces can accrue significant cashable benefit from a reduction in the number of team leads and team leads can accrue better management experience from managing larger teams.

Technology Enabled Improvements

There are a significant number of technology improvements that a Police Force could implement to help develop a ‘Best in Class’ finance function.

These include:

A) Scanning and workflow

Through adopting a scanning and workflow solution to replace manual processes, improved visibility, transparency and efficiencies can be reaped.

B) Call logging, tracking and workflow tool

Police Forces generally have a number of individuals responding to internal and supplier queries. These queries are neither logged nor tracked. The consequence of this is dual:

o Queries consume considerable effort within a particular finance team. There is a high risk of duplicated effort from the lack of logging of queries. For example, a query could be responded to for 30 minutes by person A in the finance team. Due to this query not being logged, if the individual that raised the query called up again and spoke to a different person then just for one additional question, this could take up to 20 minutes to ensure that the background was appropriately explained.

o Queries can have numerous interfaces with the business. An unresolved query can be responded against by up to four separate teams with considerable delay in providing a clear answer for the supplier.

The implementation of a call logging, tracking and workflow tool to document, measure and close internal and supplier queries combined with the set up of a central queries team, would significantly reduce the effort involved in responding to queries within the finance departments and divisions, as well as within the actual divisions and departments, and procurement.

C) Database solution

Throughout finance departments there are a significant number of spreadsheets utilized prior to input into the financial system. There is a tendency to transfer information manually from one spreadsheet to another to meet the needs of different teams.

Replacing the spreadsheets with a database solution would rationalize the number of inputs and lead to effort savings for the front line Police Officers as well as Police Staff.

D) Customize reports

In obtaining management information from the financial systems, police staff run a series of reports, import these into excel, use lookups to match the data and implement pivots to illustrate the data as required. There is significant manual effort that is involved in carrying out this work. Through customizing reports the outputs from the financial system can be set up to provide the data in the formats required through the click of a button. This would have the benefit of reduced effort and improved motivation for team members that previously carried out these mundane tasks.

In designing, procuring and implementing new technology enabling tools, a Police Force will face a number of challenges including investment approval; IT capacity; capability; and procurement.

These challenges can be mitigated through partnering with a third party service company with whom the investment can be shared, the skills can be provided and the procurement cycle can be minimized.

Conclusion

It is clear that cultural, process and technology change is required if police forces are to deliver both sustainable efficiencies and high quality services. In an environment where for the first time forces face real cash deficits and face having to reduce police officer and support staff numbers whilst maintaining current performance levels the current finance delivery models requires new thinking.

While there a number of barriers to be overcome in achieving a best in class finance function, it won’t be long before such a decision becomes mandatory. Those who are ahead of the curve will inevitably find themselves in a stronger position.

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The New Rule For Buying a Home – Using Owner Financing

The American Dream; what does it mean to you? People have different jobs or hobbies or passions in life, but one constant remains the same among all of us, and this common thread that unites our dreams is that of Home Ownership! Unfortunately, in this current economy, achieving the dream of home ownership is becoming more difficult than any time in recent history. Too many Americans are following the unwritten rule of home ownership that tells us to ‘Find a Realtor and Get a Bank Loan’. In past economies, with thriving job markets, lower inflation, and less credit restraint, that ‘rule’ may have made sense to follow.

But our current economic system is making it difficult for the average person to achieve the American Dream of Home Ownership. In times of unstable job markets, with double digit unemployment forcing people to become self-employed to make a living, the banks are requiring a W-2 stable job history in order to issue loans. In times of a great credit crisis, the banks are requiring stricter credit scores than most people are able to achieve. Fewer and fewer honest, hard working Americans who are used to following the ‘traditional rules’ for owning a home are having the opportunity to own their own homes.

What if you could achieve the American Dream of Home Ownership without the assistance of a bank?

The purpose of this document is to allow motivated home seekers an opportunity to write a New Rule of Home Ownership that allows you to declare your freedom from the services of a Bank in order to partake in your piece of the American Dream of Home Ownership!

In order to understand the New Rule of Home Ownership, let’s take a closer look at the existing rules of purchasing a house with Traditional Bank Financing.

The first part of the Traditional Bank Financing focuses on Qualifying for a Loan. While many different loan packages exist, the most common loan written in today’s market is an FHA Loan, and therefore, we shall use their guidelines as an example. The following are guidelines for an FHA Loan:

o FHA Loans require a minimum credit score of 620 to be eligible for a loan
o FHA will require 3.5% down on the home. This down payment MUST come from your account. You are not allowed to borrow from friends, family or anyone else. You must document where the funds for the down payment came from. Specifically, the source of the down payment must be from your personal checking, savings or retirement account and CAN NOT be borrowed!

In order to work with most Realtors, you must first get pre-approved for a bank. Many Realtors won’t even show you a house unless you can prove that you are able to afford and receive financing for the property. This painful process of pre-approval from a bank can take 2-3 days and involve the following steps:

o Proof of Creditworthiness
o You must provide 2-4 years worth of tax returns!
o You must provide your last 4 pay check stubs if you are an employee or an updated Profit and Loss statement if you are self-employed, a business owner, an independent contractor or entrepreneur. However, if you cannot show a consistent pay stub as proof of income, then you may want to skip ahead to the part of this document where ‘Owner Financing’ is discussed, as you will find it increasingly difficult to qualify for a mortgage.
o Your bank may require you pay off other debit to help improve your credit score to qualify for the loan
o And the worst part… this proof of creditworthiness is done throughout the entire home buying process! Even once you qualify and pick out the home of your dreams; underwriters at the bank will have you go through the same process to make sure you still qualify.

Now that you are pre-qualified for the home of your dreams, you may finally begin the process of working with a Realtor to find your new home.

Once you’ve found your home, the Traditional Banks will want an inspection performed on the home and may require the seller to fix EVERYTHING for the bank to finance your loan. Some people just want a small discount on the house and they will do their own repairs however, many times a traditional bank will not allow you to do this! These small fixes may add to the total price of the house.

Also, expect to pay Realtor fees, bank fees, filling fees, “point buy down” fees, loan origination fees, closing costs, title fees, surveys, appraisal fees, and anything else imaginable for which to be charged. Though many of these fees can be rolled into your loan, over the long term, you may be paying an extra 10% in unnecessary Financing Fees that are loaded into your loan!

What if there was a quicker, easier, and less intrusive way to take your share of the American Dream? What if you could look at homes without having to pay a Realtor fee, pre-qualify for a loan, and go through a 3 month home buying process? After all, we ARE in a BUYER’S market in Real Estate, so why shouldn’t we be able to buy?

Consider the possibility of declaring a New Rule. Instead of working with (and paying for) a Realtor, why not work with the Seller directly? Especially if that seller is a Professional Real Estate Investor who is not only willing to sell the house in a quick and simple matter, but is also will to FINANCE the sale of the house on a short-term basis!

Earlier in this eBook, we went over the process of the Tradition Bank Financing. Now, we shall detail the 7 Easy Steps of Purchasing Your Home with Owner Financing:
* Contact the Seller of the Home without having to pre-qualify for a loan and look at the home to decide if you want to purchase.
* Settle on a price
* Agree to a down-payment and interest rate
* Once you’ve agreed to a price, down payment, and interest rate, complete a Deposit to Hold form and pay this 1% fee applicable to the sales price of the property. This fee will take the property off the market while you are closing on the home.
* Fill out credit application; provide 2 most recent paycheck stubs and bank statements as proof that you can afford the monthly payment.
* (Optional) If you chose, you can order your own home inspection to review the condition of the home
* Close in 2-5 business days

Buying a home from a Professional Real Estate Investor is quick and easy. Once you have settled on the price and monthly payments, you have minimal paperwork to complete and can close on the transaction within one week! The following is a summary of some of the benefits of Owner Financing compared with Traditional Bank Financing:
* In many cases, there is no minimum credit score required
* Instead of 10% Traditional Bank Finance Fees / Closing Costs, your Owner Finance Fee averages to 5% of the transaction.
* Unlike Traditional Bank Financing, your down payment for Owner Financing may come from almost anywhere (as long as it is a legal way to raise the funds). You can borrow the money from family, friends, others. There are also some tax incentives for you to use part of your retirement savings. Either way, with Owner Financing, you are allowed to raise your own down payment as you see fit!
* You and the Owner Finance Seller will agree on a time to “close” on the home and may close within 5 business days!
* Your Owner Finance loan is dependent on your down payment and ability to pay the monthly payment and NOT on your credit or having a W-2 Job. Therefore, Business Owners, Entrepreneurs, Independent Contractors, and the Self-Employed may qualify for Owner Financed Homes!
* You are not required to provide extensive documentation to obtain your loan

Due to the efficiency, simplicity, and cost effectiveness, you can see why buying directly from an investor with Owner Financing is the New Rule for Buying Homes. Owner Financing interest rates may be a little higher than market price when you initially purchase your home, however, this higher rate, along with a sizeable down payment, will actually help you obtain conventional financing at a lower rate down the road when you decide to refinance!

A good way to look at Owner Financing is that is a solution to buying a home with short-term financing. Once you have paid your Owner Financed note on time for say 12-24 months, it’s easier to refinance your existing note with a traditional bank loan at a lower interest. It’s much quicker, easier, and less intrusive to refinance a home into traditional financing then it is to purchase a home with traditional financing!

The following example will detail the process and the costs of owner financing:

o John chooses to purchase a beautiful home for $150,000 with a traditional bank loan. John’s credit score is 590 and the bank will not loan him any money until his credit score is at least 620. John understands the importance of owning a home and wants to buy something now.
o John finds a home that is being offered for $150,000 with Owner Financing. John has $15,000 to put down and wants to close in 5 business days. John’s new loan is at an 8.5% rate for 30 years and the sellers would like John to refinance his loan in 24-36 months. John’s monthly payment is $1,350 and it includes Principle, Interest, Insurance, and HOA fees. John is happy because he can afford $1,350 per month and is able to take his part of the American Dream!
o As John pays on time for, say, 24 months, John has an excellent payment history with his current lender. John will also need to be working on his credit in those 24 months to raise his score to the current minimum of 620.
o When John approaches a traditional bank John will be able to demonstrate the following:
o John’s $15,000 down payment shows that he has ‘skin in the game’ and is not just going to bail on his house payments
o John CAN afford and has been paying $1,350 a month at a 8.5% rate for his loan
o John’s credit score is now above the minimum required 620
o If John can afford $1,350 a month at 8.5% interest, John can easily afford a $1,100 a month payment at 6.5%!

It is much easier to refinance a loan rather than trying to get a loan for the original financing! Since you are already in the house, there is no inspection required, no lengthily closing procedures and there is no longer all that extra red tape that is associated with buying a home with traditional financing!

As you can see, purchasing with Owner Financing can be easily done and quickly closed for those who cannot use a traditional bank loan but deserve to own a home now.

Summary

In today’s market, due to tough economic times, there are many people selling their properties. Yet, despite the fact that this is a ‘buyer’s market’, it is tougher to buy a home with Traditional Bank Financing than ever before. Following the old, unwritten rules will lead you to a long and unhappy life in an apartment complex. Motivated home seekers looking for their piece of the American Dream are unable to achieve this great promise by traditional and conventional means due to stringent lending requirements initiated by the very same financial institutions that gladly took over 1 billion of our tax dollars to bail them out! Banks tightening up on their lending practices is causing a shortage of homebuyers in the market. This is one of the biggest reasons that real estate values continue to free fall because there are not enough people who can qualify for available homes while following the unwritten rules.

Inspired home seekers, looking to break away from the old rules and ready to write his or her own New Rules to Home Ownership will be able to take advantage of this buyer’s market, and with Owner Financing, you will see more and more people purchasing homes. If you are in the market to buy a home however, you cannot qualify for a traditional loan, I strongly recommend you contact a company that specializes in Owner Finance Homes.

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