Categories

A sample text widget

Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.

Need a Bank Loan for Your Small Business? Timing Can Make or Break Your Chances

Imagine a small-business owner walks into his or her shop one day and sees water gushing from the company bathroom, turning the entire place into a giant swamp. In this emergency scenario, the business owner doesn’t have much time to think, and doesn’t have enough cash on hand to fix the plumbing that day and open up for business.

If the business owner had a line of credit in place for emergencies such as this, he could easily write a check to the plumber and clean-up crew and pay a low interest-rate on the line of credit to cover the fix. Instead, with no contingency plan, the business owner would likely need to take on a short-term business loan with interest rates in the 60 to 80 percent range to fix the plumbing and get back up and running.

At MultiFunding, a loan brokerage firm, I talk to small-business owners everyday who are in desperate need of a loan to cover an emergency situation. If these business owners would have taken initiative much earlier, when the need wasn’t as desperate, they may have had better loan options with lower interest-rates.

Related: Visit Entrepreneur Bank Search: a Search Tool to Help You Find Local Banks With a Focus on Small-Business Lending

As small-business owners, we tend to only concentrate on the here and now: how sales went that day and what’s on the horizon for tomorrow. This shortsightedness can spell trouble when it comes to a dry spell in sales or an unforeseen circumstance in which instant cash is needed.

The truth is it’s easier to secure a loan or a line of credit when you don’t need one rather than wait until the situation is dire.

If your business is doing well – you have accounts receivable, industry growth is strong and you have good credit – now is the time to consider a loan or a line of credit. Save the funds as a contingency plan in case something does go wrong or you experience a slow month and need the extra cash to cover operating expenses and payroll.

For most businesses, there will be plenty of options for loans when business is good and cash flow is strong. However, choices dwindle and can be extremely expensive if you wait to consider loan options until you’re desperate and in need of a lifesaver loan.

Related: The Small-Business Guide to Getting the Cash You Need

FinanceLoans […]

Banks get generous to hook clients

Thumbnail

Advisers warn mortgage deals offering electronics, cash, furniture may cost people more in long run

Banks are offering cash, TVs and furniture vouchers to entice customers into taking out home loan. Photo / Thinkstock

Banks are offering cash, TVs and furniture vouchers to entice customers into taking out home loans – but experts warn consumers not to be taken in, or it could cost them tens of thousands of dollars.

ASB is offering potential customers a Sony 48-inch TV and PlayStation 4 with new loans of $250,000 or more, while Kiwibank recently offered $2000 cash or a $2500 Freedom Furniture gift card for those willing to transfer their everyday banking and loan to the bank.

ANZ is offering between $1500 and $2000 cash, depending on the loan amount, while Westpac is offering a “healthy cash bonus” with loans worked out with customers “on a case-by-case basis”.

But Karen Tatterson of the Professional Advisers Association said consumers should be wary because there was “no such thing as a free lunch”.

Some people could be tempted by gimmicks and inadvertently sign away tens of thousands of dollars refinancing their loan for a bit of extra cash, she said.

“You have to be very careful your loan isn’t going back to a term that’s longer than you’ve currently got. Banks always write a loan over 30 years, so if you refinance to another bank and you’re 22 years into your home loan, make sure you keep it at the current loan term.

“If you go from a 22 to a 30-year term it could add $20,000 or $30,000 interest to the cost of your loan.”

David Chaston of finance website interest.co.nz said the value of loan incentives depended on how they were used.

“If you’re able to negotiate a good deal with the bank, ignoring the incentive, and then you add the incentive as a bonus you have a very good deal,” he said.

“And you have an even better deal if you can use the cash incentives to pay down your loan.”

Real Estate Institute head Helen O’Sullivan said an increase in marketing activity from banks usually coincided with the spring property uplift, but also warned consumers to be wary of temptation.

“You’ve got to weigh up the value of it with the overall package that is being offered …

“Don’t get blinded to the downside of the financial cost of something because of the excitement of getting a new PlayStation.”

ASB’s head of home lending and small business Vince Clark said the bank’s spring package was in reaction to it being a typically busier season for house sales activity.

Kiwibank spokesman Bruce Thompson said its promotion was designed to keep the bank on mortgage shoppers’ radars.

“It’s a very competitive market and Kiwibank has never taken the approach of sitting back and waiting for the phone to ring.”

ANZ head of mortgages Sarah Berry said the bank had offered cash with home lending since 2012 and the home loan market in New Zealand was very competitive.

Westpac said every customer’s situation was different and the bank worked with them on a case-by-case basis to ensure they have the right solution for their circumstances.

NZ Herald

[…]

Brits Get Disney Fix as U.S. Banks Lend to Foreigners

Adele and Mark Lee, who live in England with their three children, said they got approved for a U.S. mortgage without setting foot on American soil. The vacation home they’re buying near Florida’s Disney World would have been out of reach if they had to pay all cash.

“It would have been a stretch,” said Adele, a 35-year-old nursery school teacher, speaking from the family’s home near Birmingham. “We wanted to keep some money here just to fall back on.”

More from Bloomberg.com: Obama’s Words on Islamic Militants Come Back to Haunt Him

The Lees are using a foreign-national mortgage, a loan for overseas buyers that required a 40 percent down payment, to purchase the five-bedroom house later this month for $423,000. Adele and her husband, a construction worker, plan to rent the Orlando property when they’re not living in it.

Lenders are providing greater access to credit for non-U.S. residents to finance vacation houses and investment properties. Foreign buyers, who are helping to fill a void left by Americans facing high borrowing hurdles, spent about $35 billion on U.S. homes using mortgages in the 12 months through March, a 46 percent increase from a year earlier, according to the National Association of Realtors.

More from Bloomberg.com: Crackdown Targets Inversions Designed to Limit U.S. Taxes

“The American pool of borrowers is drying up,” said Anthony B. Sanders, an economics professor at George Mason University in Fairfax, Virginia. “Middle-class borrowers have flatlined due to low income growth, and domestic investors are finding it less appetizing because the foreclosure inventory has dried up. So who do you go to? Foreign investors.”

Growing Share

At HSBC Holdings Plc (HSBC), foreign-national mortgages, available to banking clients who deposit at least $15,000, account for about 30 percent of its U.S. home-lending business, according to Peter Alongi, a mortgage sales manager. That’s up from a share in the “teens” in 2008.

More from Bloomberg.com: Ruble Falls on Brent Decline, Fed Concerns: Russia Reality Check

FBC Mortgage LLC, an Orlando-based lender, has increased mortgages to international buyers by 65 percent this year compared with 2013. Calabasas, California-based Mega Capital Funding Inc. started lending to non-residents in June after seeing rising demand from Chinese buyers.

“Instead of buying two houses in cash they can buy four houses with loans,” said Brian Na, chief executive officer of Mega Capital, which is now issuing about $10 million of the mortgages a month. “At the same time, buyers can build a credit history in the U.S.”

While many Americans struggle to qualify for mortgages, lenders are chasing wealthy buyers, including foreigners, whose loans typically require a 30 percent to 40 percent down payment compared with 20 percent for U.S. residents. Banks and smaller firms are offering more loan products to buyers based overseas, most of whom have paid cash for homes in the last few years.

Cash Sales

Cash sales have been falling and in June made up the lowest share of total home purchases, at 33 percent, since September 2008, according to CoreLogic Inc., an Irvine, California-based property-data firm.

In Florida, the state with the largest share of cash sales, smaller community banks have gotten increasingly comfortable lending to foreign buyers, said Rob Nunziata, CEO of FBC.

His firm typically offers nonresident borrowers adjustable-rate loans of as much as $750,000 that are fixed for three to five years. The mortgages require at least a 30 percent down payment and six months of cash reserves. Borrowing costs are generally one or two percentage points higher than conventional loans.

Credit Profiles

The biggest challenges for lenders are verifying incomes and building credit profiles for non-UN.S. residents. Their home countries have tax systems that differ from America’s and lenders have to rely on third parties, along with documentation from employers or accountants, said Nunziata.

One of FBC’s borrowers, Yoram Yahav, said he purchased a few houses in cash before deciding to get a $100,000 loan for a Florida property. He’s seeking to build his U.S. credit profile because he plans to bring more foreign capital to America with other global investors.

“You may have $2 million in your bank account in England, but if you want to borrow $80,000 in the U.S. you can’t because of this issue with credit,” said Yahav, whose Tel Aviv, Israel-based firm works with management teams in scenario planning for future events. “This way I can also increase my cash portion and have more money to put into new businesses.”

While home loans were available to foreign nationals during the U.S. housing boom, financing dried up as banks tightened credit after the crash. Applications from international homebuyers are now at about the same level they reached during the peak in about 2006, when foreigners needed just a passport and an application to get a mortgage, according to Andy Scott, president of International Mortgages.Net in Orlando, which caters to mostly British clients, including the Lees.

‘Convoluted’ Process

“The process is more convoluted,” Scott said. “It takes longer to get applications through. And there are a lot more checks and balances.”

The company, which has worked with international buyers in the U.S. and elsewhere for about 13 years, now uses seven lenders, up from only two after the housing bust. The firm moved from Scotland to Orlando a year ago because so many clients were purchasing there, Scott said.

Buyers from the U.K., Canada, China, Mexico and India accounted for 54 percent of foreign sales in the year through March, data from NAR show. The top five states for international buying are Florida, California, Arizona, Texas and New York, according to the association.

Disney World

The Lees have only seen their vacation house in videos taken by their Realtor. They chose it for its swimming pool and proximity to Disney World, which they usually visit annually. The couple plans to rent it for the next five years and may eventually live there year-round.

“It’s amazing what you can get over there for the money,” Adele said. “I also like that we could do everything over the Internet. We have noticed that Americans love paperwork. But the process was fairly straight forward.”

Rising prices and competition from cash-rich investors have kept many American homebuyers on the sidelines. Renters have also been blocked from homeownership by down payment requirements and “very strict underwriting standards,” said Stuart Miller, CEO of Lennar Corp. (LEN), the largest U.S. homebuilder by market value.

“The process itself has become fairly invasive,” Miller said last week on a call with investors. It’s “almost designed to scare people away.”

Loan Dropoff

Mortgage applications for house purchases are 10 percent below the level a year earlier, according to data from the Mortgage Bankers Association. Banks this year are also struggling to replace a falloff in lending dominated by refinancing, which plunged last year when borrowing costs spiked.

While more financing for foreigners will boost property purchases in the U.S., smaller lenders who can’t hold as much debt are constrained by a limited secondary market for selling their loans, said Na of Mega Capital.

Foreclosure of delinquent borrowers could also be a complicated process for some foreigners, such as those with diplomatic immunity, according to Joseph Pisa, CEO of Northstar Funding Inc., a Hoboken, New Jersey-based lender which focuses on the New York City area. While the borrowers can still get financing, rates are higher because of the additional risk, he said.

Jerry Barker, a real estate agent in Celebration, Florida, said half of his clients, which are mostly European, now get foreign national loans. That compares with about five percent three years ago.

“Our business has increased because we are able to sell to people we couldn’t sell to before,” said Barker. “Not everybody has a shoe box under their bedsprings with cash.”

To contact the reporters on this story: Heather Perlberg in Washington at hperlberg@bloomberg.net; Prashant Gopal in Boston at pgopal2@bloomberg.net

To contact the editors responsible for this story: Kara Wetzel at kwetzel@bloomberg.net Vincent Bielski

More from Bloomberg.com

Billionaire’s Supersonic-Jet Plan Gets Help From AirbusAlibaba’s Banks Boost IPO Size to Record of $25 BillionU.S. Stocks Decline as Small-Caps Tumble With CommoditiesLoansFinancials IndustryDisney WorldFlorida […]

Banks offer home loan enticements

Thumbnail


Banks offer home loan enticements as property market hots up

BusinessDate September 22, 2014 – 12:15AM (0) Read later

National Australia Bank will on Monday start giving borrowers $1000 in an unapologetic marketing tactic.

Banks have started to throw cash at customers again in an effort to win business as spring fever hits the property market and house prices soar.

National Australia Bank will on Monday start giving borrowers $1000 in an unapologetic marketing tactic aimed at increasing its share of Australia’s $1.3 trillion mortgage market without cutting interest rates, which are at historic lows.

It comes as Treasurer Joe Hockey said he was “hesitant” for the government to take action to rein in spiralling property prices, with the median Australian home price surging 11 per cent in the past year. Instead, he said it was up to the Reserve Bank and bank regulator, the Australian Prudential Regulatory Authority, to adopt limits on mortgage lending to cool an overheating property market.

“I am naturally hesitant to have government in any way interfere in the market. But, of course, we are in some challenging times when it comes to monetary policy,” Mr Hockey said. “The Reserve Bank needs to be mindful of some of the domestic challenges, and the quite limited massive growth in real estate prices in parts of Australia. I say that because it’s primarily in pockets of Sydney, pockets of Melbourne and, to a lesser degree, in Brisbane.”

Advertisement

[…]

China loosens requirements for loan-to-deposit ratio

BEIJING – China’s banking regulator is relaxing the rules for the calculation of banks’ loan-to-deposit ratio in a bid to release more cash into the system to support the real economy.

As of July 1, selected loans to small firms and the farm sector will be excluded in the computation of banks’ loan-to-deposit ratio, the China Banking Regulatory Commission said in a statement on its website.

The definition of deposits will also be broadened to include items such as large negotiable certificates of deposit, the regulator said.

The amendments will allow banks to re-lend more of their deposits, which could help shore up activity in China’s cooling economy.

Chinese laws cap banks’ loan-to-deposit ratios at 75 percent, which means banks can lend no more than three quarters of their deposits.

To meet the loan-to-deposit requirement, banks often demand more cash at the end of each quarter and year so that they can attract more deposits and dress up their quarterly financial statements.

Despite the changes, the regulator did not go as far as some had hoped in revising the rules.

Some investors had speculated that China would broaden its definition of deposits to include interbank loans when calculating the ratio.

But that change was rejected by the regulator as it felt interbank loans are not a steady form of income and should not be included in the computation of the loan-to-deposit ratio, said a source with knowledge of the matter.

The source declined to be named as she is not authorised to speak to the media.

[…]

Former anti-payday loan campaign director takes new job…at Wonga

Image stepchange-director-takes-job-at-wonga.jpg


Former anti-payday loan campaign director takes new job…at Wonga

11:00am Fri April 11th

A former executive at a leading anti-payday loan campaign group has made a surprising career move…by taking a high profile PR job at Wonga.

In a startling display of gamekeeper turning poacher, Delroy Corinaldi, who was director of external affairs at StepChange until last year, has joined Wonga as head of public affairs.

StepChange, previously known as the Consumer Credit Counselling Service, offers free advice to people in debt, warning of the dangers of payday loans – and actively campaigns for Government to “clamp down” on lenders.

But in eight short months, Corinaldi has gone from a charity which says in stark terms on its website “Payday loans: Don’t use them to deal with debt” to leading the lobbying offensive for Britain’s biggest vampire lender.

In a statement announcing his departure from the charity last August, Corinaldi said:

“After four years I’m considering some exciting new challenges in finance, but I will always be passionate about the importance of achieving a society free from problem debt…”

A challenge indeed.

This entry was posted in Banks and finance and tagged

. Bookmark the

permalink

. Trackbacks are closed, but you can

.

[…]

Banks stockpile cash for lending

Posted: Saturday, March 29, 2014, 1:08 AM

For all the warnings from the Federal Reserve over excessive risk-taking as loan growth soars to levels last seen just before the crisis, bankers still have 10 trillion reasons to lend.

That’s the dollar amount that banks hold in deposits in the U.S., which exceeded the value of all loans by a record $2.5 trillion last month. Banks are amassing more cash even as lending to U.S. companies this quarter is poised to increase by the most since 2007, according to data compiled by the Fed.

The lending surge reflects confidence among the nation’s banks to extend credit as the Fed scales back its monetary support of the U.S. economy, while the cash cushion may temper the concerns of regulators who in recent months have warned that excesses may be emerging in riskier parts of the loan markets. Seven years ago, when banks were lending at a faster pace, the amount that was lent outstripped cash deposits.

“Banks are not exhibiting anywhere close to the kind of excess we saw leading up to the crisis despite the growth in loans,” John Lonski, the chief economist at Moody’s Capital Markets Research Group, said in a telephone interview from New York. “They have a lot of lending capacity and they believe business conditions will remain good enough that borrowers will be able to meet their obligations.”

Cash deposited at banks increased to the record level through the week ending March 12, compared with loan assets of $7.5 trillion, the Fed data showed. This is a reversal from October 2008 when loans exceeded deposits by $205 billion.

The $68 billion jump in commercial and industrial loans made by banks to U.S. companies brings corporate borrowings to $1.67 trillion.

Known in the industry as C&I loans, they are one of the major components of the “loans and leases” that banks report.

[…]

Banks Lending Like It’s 2007 Belied by $10 Trillion Hoard

For all the warnings from the Federal Reserve over excessive risk-taking as loan growth soars to levels last seen just before the crisis, bankers still have 10 trillion reasons to lend.

That’s the dollar amount that banks hold in deposits in the U.S., which exceeded the value of all loans by a record $2.5 trillion last month. Banks are amassing more cash even as lending to U.S. companies this quarter is poised to increase by the most since 2007, according to data compiled by the Fed.

More from Bloomberg.com: Citigroup Fails Fed Stress Test as BofA Gets Dividend Boost

The lending surge reflects confidence among the nation’s banks to extend credit as the Fed scales back its monetary support of the U.S. economy, while the cash cushion may temper the concerns of regulators who in recent months have warned that excesses may be emerging in riskier parts of the loan markets. Seven years ago, when banks were lending at a faster pace, the amount that was lent outstripped cash deposits.

“Banks are not exhibiting anywhere close to the kind of excess we saw leading up to the crisis despite the growth in loans,” John Lonski, the chief economist at Moody’s Capital Markets Research Group, said in a telephone interview from New York. “They have a lot of lending capacity and they believe business conditions will remain good enough that borrowers will be able to meet their obligations.”

More from Bloomberg.com: Saudi Arabia Isn’t America’s Friend

Record Deposits

Cash deposited at banks increased to the record level through the week ended March 12, compared with loan assets of $7.5 trillion, the Fed data showed. This is a reversal from October 2008 when loans exceeded deposits by $205 billion.

The $68 billion jump in commercial and industrial loans made by banks to U.S. companies brings corporate borrowings to $1.67 trillion.

More from Bloomberg.com: Billionaires Buying Islands Off Australia Find Perilous Paradise

Known in the industry as C&I loans, they are one of the major components of the “loans and leases” that banks report. Other borrowings include those secured by real estate and debt extended to individuals such as credit cards. The expansion of C&I loans by $38.3 billion in February was also the biggest monthly increase since 2008.

“That is a level we haven’t seen since the boom years,” Mariarosa Verde, an analyst at Fitch Ratings, said in a telephone interview from New York. “The economy runs on credit and it’s good for that.”

Growing Economy

The U.S. economy grew more in the fourth quarter than previously estimated, according to figures from the Commerce Department released yesterday in Washington.

Gross domestic product grew at a 2.6 percent annualized rate from October through December, more than the 2.4 percent gain reported last month, the figures showed, buoyed by consumer spending climbing by the most in three years.

Initial jobless claims fell 10,000 to 311,000 in the period ended March 22, the fewest since late November, according to Labor Department data released yesterday in Washington.

The Fed has reduced its monthly purchases of Treasuries and mortgage-backed bonds by a combined $10 billion in each of three policy meetings to the current level of $55 billion and said it will cut back on buying through future meetings, according to a statement last week.

Fed officials also moved up their projections for when the bank will lift its benchmark rate, which has been close to zero since 2008, to 1 percent by the end of 2015.

Declining Delinquencies

Banks have been willing to lend more as the number of borrowers who fail to meet their obligations has declined.

The proportion of loans on which borrowers failed to make timely payments dropped to an all-time low of 0.87 percent in December, the least in quarterly data from the Fed going back to 1987.

Banks eased their lending policies for C&I loans to companies of all sizes as demand increased, according to the Fed’s last senior loan officer opinion survey on lending practices in January. The lowering of standards included cutting spreads on C&I loan rates, reducing the cost of credit lines, decreasing the use of interest rate floors and easing covenants, the survey showed.

The decline in quality has prompted warnings from regulators. Last year, the Fed and the Office of the Comptroller of the Currency told some of the biggest banks to improve underwriting standards for non-investment-grade or leveraged loans.

The amount of speculative-grade or leveraged-loans made last year in the U.S. exceeded $1 trillion, the most on record, according to data compiled by Bloomberg.

“Lending competition is increasing and that needs careful monitoring,” Verde said.

Underwriting Revenue

Debt-underwriting revenue at eight of the largest U.S. and European investment banks, including JPMorgan Chase & Co. and Deutsche Bank AG, rose 9.1 percent to about $18.7 billion in 2013, according to Bloomberg Industries. That was the highest total since at least 2008.

Much of the increase last year was driven by high-yield lending, according to an annual report from Coalition Ltd., an industry-analytics firm, in February.

While banks have boosted borrowings to riskier companies, they have also strengthened their finances. The Fed’s stress tests for banks indicated this week that lenders have doubled their capital since the first such measure was taken in 2009.

Regulations

“What we’ve seen since the financial crisis began is a consistent expansion in cash and capital inside banking companies,” Richard Bove, a financial services analyst with Rafferty Capital Markets LLC, said in a telephone interview. “Various regulations that have been put in place, have forced banks to increase their liquidity.”

C&I loans allows banks to provide credit for business purposes such as to help finance projects, invest in equipment and expand businesses. The borrowings increased 7.3 percent in 2013, its third consecutive annual gain after shrinking 5.5 percent in 2010 and 19 percent in 2009.

“I think it is a bit of exaggeration to claim that we have substantially increased default risk because of a faster growth of C&I loans,” Moody’s Lonski said. “There’s ample amount of liquidity right now and no signs of it drying up anytime soon.”

To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net

To contact the editors responsible for this story: Faris Khan at fkhan33@bloomberg.net Shannon D. Harrington

More from Bloomberg.com

Fraternity Chief Feared for Son as Hazings Spurred JPMorgan SnubU.S. House Ends Week Without Acting on Russian SanctionsWhat Really Concerns China About Flight 370?Financials IndustryLoans […]

Emirates Steel cuts banks, pricing as loan oversubscribed

* Loan multiple-times covered – sources

* Pricing cut to 160 bps from original 200 bps target

* Half of banks cut from final deal

DUBAI/ABU DHABI, March 18 (Reuters) – Abu Dhabi’s Emirates Steel has cut around half the banks who applied to fund its $1.3 billion loan and dropped the margin by around a fifth after the facility was heavily oversubscribed, banking sources said on Tuesday.

The loan, which refinances an existing $1.1 billion facility and raises cash to purchase assets from parent Abu Dhabi’s General Holding Corp (Senaat), attracted commitments from lenders worth more than $5 billion, three of the sources said.

This level of demand has allowed the borrower to reduce the margin it will pay on the loan from around 200 basis points over the London interbank offered rate (Libor) to around 160 basis points over the benchmark, the sources said, speaking on condition of anonymity as the information isn’t public.

Emirates Steel declined to comment.

While the interest rate earned on the loan by banks will be topped up by fees, the fact Emirates Steel could drop the margin so significantly is a sign of both the quality of the borrower and the substantial liquidity in the Gulf loan market.

“The response was overwhelmingly good, especially from international banks,” said one local banking source. A second banking source added the lower cost of their funding allowed the foreign banks to drive the price down.

While the original deal still has more than three years to run, the company is hoping to take advantage of a lower interest rate environment to reduce its funding costs – a step it will achieve as the existing deal pays 250 basis points.

Around 30 lenders were invited in January to participate in the loan but only around half that number will end up in the final deal, according to two of the sources. Banks in the final deal come from the Gulf, as well as Europe, the United States and Japan, one of them said.

While scaling back lenders is common practice when a deal is oversubscribed, the fact Emirates Steel asked for bids that had already been approved by banks’ credit committees will leave a lot of frustrated bankers at cut institutions.

Often in loan deals, banks will reply to an invitation from a borrower indicating whether they would like to participate and how much money they will offer, only getting sign-off internally for the transaction at the end of the process.

On the Emirates Steel transaction, banks were asked to have this internal approval already secured when replying. At this initial stage, $5.4 billion was pledged, with $3.7 billion of commitments still on the table once the margin was cut, the third source said.

“If you go to committee and get the approval, and do all the hard work, then it is going to be embarrassing for a lot of bankers to not be in the final deal,” said the second banking source.

The loan has an eight-year lifespan and an amortising structure. This requires both interest and principal to be repaid during the lifetime of the loan, as opposed to a bullet facility where only interest is paid during the tenure. (Reporting by David French and Stanley Carvalho; Editing by William Hardy)

[…]

Phil Veterans Bank plans doubling of retail loan portfolio, launches mortgage loan promo

Thumbnail


Phil Veterans Bank plans doubling of retail loan business

By: Maricel E. Burgonio, InterAksyon.com
March 12, 2014 4:52 PM

InterAksyon.com means BUSINESS

MANILA – Philippine Veterans Bank (PVB) plans to double its retail loan portfolio with the expansion of its mortgage lending this year.

“We’re trying to ramp up our retail loan portfolio,” said PVB president Joey Bermudez, adding that the bank had a portfolio of P2.5 billion last year, of which bulk went to government owned and controlled corporations (GOCCs) and local government units (LGUs).

He said the bank is setting aside P2 billion for mortgage lending this year.

The lender launched a housing loan product — the Home Loan Free Home — wherein borrowers can avail of a cash-back guarantee on the principal loan at the end of the 20-year term. The promo offers a 100-percent return as long as the borrower meets the terms and conditions.

PVB is offering the mortgage loan promo from March 1 to May 31.

“A good product sells itself,” Bermudez said, adding that PVB’s new mortgage loan product is a unique investment and savings instrument rolled into one.

Eligible borrowers include homeowners with existing mortgage loans with other banks that have been outstanding for at least a year, as well as new homebuyers of residential house and lots, townhouses, or condominiums.

PVB offers an interest rate of 8.25 percent per annum for the first five years, for re-pricing every five years.

PVB closed last year with P6 billion in capital and with a network of 60 branches, 15 of which are in Metro Manila and 45 branches in areas outside the National Capital Region.

PVB has a 19 percent capital adequacy ratio (CAR), higher than the 10 percent regulatory minimum.

InterAksyon.com means BUSINESS

Related Stories:

»Banks shutter branches along path of ‘Yolanda’ […]