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Websites offering instant cash still operating despite payday loan rates cap

Websites offering instant cash still operating despite payday loan rates cap – ITV News Top stories Your area National Border Tyne Tees Calendar Granada Central Anglia London Meridian Wales West Country (E) West Country (W) Channel Topics World Politics Business Money Health Education Entertainment Royal Technology Sport And Finally Environment Science Travel Religion Economy Weather Countryside Employment Animals Consumer Weather Main page content

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USSmallBizLoans.com States More Business Loan & Merchant Cash Advance Borrowers Denied By Banks

Channel Islands, CA (PRWEB) August 03, 2014

— In recent years, studies have shown that banks have the highest rate of business loan denials than any other funding source. During a time when business funding is critical, many owners find themselves helpless after being denied the merchant cash advances or business loans needed to keep their businesses open or growing. They are literally hoping and waiting for their next lucky break unsure of what to expect next.

James Gipson learned this hard lesson through trial and error over a span of 25 years of being an entrepreneur, business owner and an investor. Creator of USSmallBizLoans.com, he is now informing other business owners of alternative lending resources through his free e-book, “12 Insider Secrets To Business Loans: What Your Lender Is Not Telling You!”

For years, banks have been the primary source of capital for small businesses, but since the Great Recession, the allocated funds earmarked for existing small businesses has dried up. As of 2008, owners are finding it more difficult to get the capital they need to run and grow their businesses. “What has magnified the problem is that banks have not only shortened the money supply by holding more funds in reserves and circulating less, but they have tightened the lending guidelines allowing fewer businesses to get funded,” says James Gipson, Expert Author and Business Loan Adviser.

Recently, entrepreneurs have pooled their financial resources and connections to form alternative private lending firms to meet the demand of small businesses across the U.S., when the banks and credit unions have failed to do so.

Since starting USSmallBizLoans.com, business owners and entrepreneurs have been educated on the differences between bank and private funding. “The more people are informed, the better decisions they can make for themselves.” As he points out, “A borrower shouldn’t judge a loan just based on the amount, the term or the interest rate alone. The borrower must also consider the fast availability of funds,” says Gipson. “A bank loan requires a ton of paperwork, personal credit risk, and can take 3-6 months to close, while private funding is less restrictive, usually has only a one page loan application, offers a no personal guarantee merchant cash advance, and can close in as little as 3 to 5 days,” he proclaims.

He warns that many small business people are not taking into consideration the velocity of money as a major factor. The speed in which you can turn $1 into $15, $20 or more in the shortest time is why the availability of funds is the most critical component.

Gipson uses this example: “Let’s say, you are the proud owner of a pizza delivery service who needs to increase production to meet the peak demand of Super Bowl Sunday. Well, maybe you were too busy running your business to stop to go to the bank, sit down and fill out tons of loan paperwork or you just didn’t get around to it. You are only weeks away from your peak season, but you need an extra $10,000 to stock up the inventory.” He asks, “What do you do then? If you go to the bank you will either get denied or even if you get approved the bank can’t fund you fast enough!” He suggests your best solution is an alternative private lending source. This type of scenario is a realistic illustration of just about any business or industry these days.

The amount of competition for a larger piece of the market share is ever increasing. A small business must have the additional capital to grow in order to compete. He points out that business owners just need to be aware of their options before applying for a business loan, merchant cash advance or a business line of credit.

USSmallBizLoans.com is a one-stop small business resource that offers small business owners in any industry across the U.S. and Canada, the opportunity to obtain fast working capital needed to sustain and to expand their businesses by lending easy to qualify funds to purchase equipment, supplies, and inventory or for any business purpose.

For more information, or to obtain James Gipson’s free e-book, “12 Insider Secrets to Business Loans,” please visit http://www.USSmallBizLoans.com.
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[…]

Positive fund flows reflect strength in the leveraged loan market

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Why refinancing deals crowded the high yield bond market (Part 6 of 6)

(Continued from Part 5)

Strength continues

The leveraged loan market (BKLN) had an inflow of $327 million last week, maintaining a very strong and steady pace for several months now. While this is lower than the $527 million from the previous week and $358 million two weeks ago, it marks the 92nd straight week in a row of cash inflows. Of the total, roughly 16% of inflows were tied to the ETF segment.

The four-week trailing average dipped to $483 million, from $504 million last week and $510 million two weeks ago. Year-to-date inflows totaled $6.5 billion, compared to last inflows of $12 billion during the same period.

The S&P/LSTA U.S. Leveraged Loan 100, which tracks the 100 largest loans in the broader index, gained 0.31% for the month ending March 25, 2014. The index provided an annualized one-year return of 4.37%.

The major ETF that tracks the S&P/LSTA U.S. Leveraged Loan 100 index is the PowerShares Exchange-Traded Fund Trust II (BKLN). Many investors favor leveraged loan ETFs to negate the effect of rising interest rates. Leveraged loans normally pay a floating interest rate above LIBOR, which adjusts with changes in interest rates.

Another major leveraged loan ETF is the Pyxis/iBoxx Senior Loan (SNLN). The ETF comprises about 100 of the most liquid, tradable leveraged loans, as identified by Markit’s Loans Liquidity service.

These ETFs—with top holdings in Clear Channel Communications, Inc., (CCMO) and Dell International LLC (DELL)—have posted an outflows $43.5 million and $0.45 million, respectively, last week.

Outlook

Returns from leveraged loan ETFs are better placed than high yield bond (HYG) ETFs in terms of interest rate volatility, as the underlying loans are usually of a floating-rate nature and are benchmarked to the London Interbank Offer Rate (or LIBOR). Plus, leveraged loans also have some surety in terms of their investment being backed by the issuing company’s assets. Consequently, the issuer company also doesn’t need to pay a premium as high as in the case of high yield bonds to sell these securities. So, loans have lower quoted yields than high yield bonds.

Leveraged loans also suffer from credit risk, much like high yield bonds (JNK). However, with an improving economy, the credit risk associated with leveraged loans or high yield bonds is reducing, bringing credit spreads down. As leveraged loans are secured by the company’s assets, and as they offer investors protection against interest rate hikes, investors may continue to favor leveraged loans over high yield bonds in the current environment.

To learn more about investing in fixed income securities, check out Market Realist’s Fixed Income ETFs page.

Browse this series on Market Realist:

Part 1 – Why was high yield bond activity little changed last week? Part 2 – Refinancing deals continue to top the high yield bond scoreboard Part 3 – Why high yield fund flows stayed positive 6 weeks in a row ETFsFinanceleveraged loan […]

Katie Hopkins sparks backlash after branding payday lending 'a …

The controversial star took part in a heated TV debate about debt last night in which she also criticised teenage mothers and slammed people for spending too much money on Christmas.

Hundreds of people took to Twitter to condemn her views but today she remained defiant in the face of mounting anger.

Ms Hopkins made her comments on Channel Five’s The Big ‘Can’t Pay’ Debt Debate: Live, which was hosted by Nick Ferarri.

She was was joined by panelists Jim Davidson who was declared bankrupt, former premier league footballer Lee Hendrie whose problems with debt drove him to attempt suicide, and Olympic legend Eddie ‘The Eagle’ Edwards who has also struggled with debt.

When the issue of payday loans with high interest rates was raised Ms Hopkins said : “I think it’s a decent business model.”

She slamed another woman, who had struggled with debt after spending £1,600 on Christmas presents, saying: “You have to save for Christmas.” She later questioned how anyone can spend that kind of figure on children’s gifts.

The 39-year-old’s appearance on the show sparked a fierce reaction on Twitter.

TV psychologist Jo Hemmings wrote: “Is @KTHopkins obligatory in every TV debate? If they can only find one gobby mare like her, it’s hardly representative.”

?Another, @MetalOllie, added: “Why do we need to hear from that vacuous, hate filled bag of spew. Katie Hopkins voice is of NO value to ANY serious debate

While ?@JoeyRymell posted: “@KTHopkins we don’t hate you because you’re famous, you’re famous because we hate you.

But Hopkins too took to the social media site to hit back at those criticising her.

She wrote: “I don’t worry about debt because I don’t buy things I can’t afford. We save for the future, insure against illness & tell kids ‘no’. Simple”

She also tweeted: “The only thing people in debt have in common other than bad money management, is an ability to blame anyone but themselves. #debtdebate”

The debate was held after research by Channel 5 discovered British families owe a record £1.4trillion, the equivalent of £54,000 for every home.

Nine million people are said to be struggling to pay their debts. Millions of Britons would have to borrow money to pay their bills within a month of losing their job.

Forty per cent would need a loan within three months, while one in 10 is so close to the financial abyss that they live week-to-week and would have to go cap in hand to friends or family to make ends meet.

Even when mortgages are taken out of the calculations, the average family still owes more than £8,000, according to the survey.

Christian Guy, director of the Centre for Social Justice, said: “Years of increased borrowing, rising living costs and struggling to save have forced many families into a debt trap that is very difficult to escape.

“Problem debt can have a corrosive impact on people and families. It can wreak havoc on mental health, relationships and wellbeing.

“People are awake until the early hours worrying about their finances and bills, while some of the poorest are cut off from mainstream banking and have no choice but to turn to loan sharks and high-cost lenders.”

The study also revealed a worrying lack of financial knowledge, with one in six borrowers having no idea what interest rates they are paying.

[…]

Cash Dividend On The Way From LMP Corporate Loan Fund (TLI)

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Looking at the universe of stocks we cover at Dividend Channel , on 2/19/14, LMP Corporate Loan Fund (Symbol: TLI) will trade ex-dividend, for its monthly dividend of $0.0725, payable on 2/28/14. As a percentage of TLI’s recent stock price of $12.18, this dividend works out to approximately 0.60%, so look for shares of LMP Corporate Loan Fund to trade 0.60% lower – all else being equal – when TLI shares open for trading on 2/19/14.

In general, dividends are not always predictable; but looking at the history above can help in judging whether the most recent dividend from TLI is likely to continue, and whether the current estimated yield of 7.14% on annualized basis is a reasonable expectation of annual yield going forward. The chart below shows the one year performance of TLI shares, versus its 200 day moving average:

Looking at the chart above, TLI’s low point in its 52 week range is $11.46 per share, with $14.67 as the 52 week high point – that compares with a last trade of $12.18.

In Tuesday trading, LMP Corporate Loan Fund shares are currently down about 0.2% on the day.

Click here to learn which 25 S.A.F.E. dividend stocks should be on your radar screen »

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

[…]

Payday loans, TV and Class | Left Futures

Image loan-shark.jpg

When was the last time that you saw someone take out a payday loan on a television programme? When did you last see a show in which someone in full time work was struggling to pay the bills? I feel there is a discrepancy between the portrayal of poverty on our televisions and that which is experienced in Britain today.

The Office of Fair Trading believes as much as £1.8 billion a year is lent in the UK by payday lenders and the Public Accounts Committee state that two million Britons currently use payday loans. Ofcom reported that in 2008, 17,000 payday loan advertisement spots were shown on television and this increased to 243,000 in 2011 and 397,000 by 2012. These resulted in 12 million impacts from adult views in 2008, 4.2 billion by 2011 and 7.5 billion impacts by 2012, with each adult watching on average 152 television payday loan adverts in 2012.

Given the high number of advertisements in between and during television programmes, it seems unusual that payday loans are so infrequently used by the documentary subjects and fictional characters on our television screens.

When Channel 4 announces that it is making a documentary series about a poor street in Britain, I do not expect a realistic view of the struggle facing millions of Britons. The cynically and provocatively named “Benefits Street” is hugely emotive and not much more than exploitative “poverty porn”, designed to enrage the public, much like a pantomime villain.

What is so frustrating for me is that these “poverty porn” documentaries make poverty look so unusual, as if there is a hidden underclass of which we are all unaware. Contradictory to this depiction, the Office of Fair Trading found a typical payday loan user was more likely to be a young male, living in rented accommodation, earning greater than £1,000 a month and without children. There seems here to be a huge discrepancy between the portrayal of poverty on Benefits Street and that which is experienced by the two million Britons needing to take payday loans.

Where are the documentaries and dramas showing the poverty in homes in which someone works? The New Policy Institute showed that more than half of the 13 million Britons living in poverty in 2011/12, lived in a household in which someone worked and that the number of people in low-paid jobs has risen, with five million people paid below the living wage. I do not see this on television, I see Katie Hopkins raising an eyebrow and blaming people for their individual circumstances.

I read a story relating to research presented at a British Sociological Association’s annual conference highlighting that in interviews of 77 people working in television and film production, 64 were middle-class and that openings within the industry were rarely advertised but tended to rely on the grapevine and family ties.

Owen Jones in his Royal Television Society, Huw Wheldon Memorial Lecture, links the socioeconomic background of television producers with the recent wave of “poverty porn” documentaries, highlighting that in a YouGov poll conducted at the Edinburgh International Television Festival, 70% of attendees believed Little Britain’s Vicky Pollard, to be an accurate representation of “white working-class” youth.

I agree with Owen Jones and feel that programmes like Benefits Street are the middle class perspectives of producers and editors regarding something that they have no experience of and do not understand. I feel that because the film and television industry have no understanding of suffering related to everyday poverty, reoccurring themes in film and television are anxiety based on how others see us, friendships or relationships and the resulting battle for psychological survival against stress and emotional exhaustion.

At a time in which we face so many problems economically and politically, I feel it is hugely important that voters can make informed decisions at the polling booth. We need accurate, first-hand experiences of poverty on our television screens, from television producers who have actually experienced it. We have adverts for payday loans but what we need are the stories of those who found themselves needing to use them.

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Related posts:

  1. Payday loans: not a black and white issue (in reply to Chris Dillow)
  2. Asking the right questions about the payday lending industry
  3. Consumer credit market winners: payday lenders

[…]

City of Montgomery puts moratorium on title pawn, payday loan …

MONTGOMERY, Alabama – After more than a month of discussion, city council members voted 5-3 Tuesday to halt the licensing of new payday loan businesses, according to local news reports.

Businesses such as Cash Express on Atlanta Highway are not affected, but a city council vote Tuesday means the city will halt the licensing of new title and payday loan businesses for three months. (Janita Poe/JPoe@al.com)

The Montgomery City Council voted 5-3 to put a hold on allowing more of the businesses in the city so staff can study what the 11 other Alabama cities that have also approved moratoriums are doing, according to a news report about the vote in the Montgomery Advertiser.

The vote authorizes the city to set a moratorium of 90 days on new title loan or payday loan businesses, according to a news story on the WSFA Channel 12 News website. The measure does not affect any currently operating payday loan business.

Mayor Todd Strange said the city will take 30 days to study other cities in the state with similar laws. Some cities that have moratoriums include Tuscaloosa, Birmingham and Trussville, the Advertiser reported.

The Alabama Legislature attempted to pass laws to regulate the industry during the last session, to protect consumers who reportedly pay on average 300 percent interest on the loan over the course of a year.

At the city council meeting on Aug. 20, Councilmen Richard Bollinger and Charles Smith said they were concerned about the large number of the establishments already in the area, particularly along Atlanta Highway from Ann Street to the Eastern Boulevard.

The council considered a vote on the moratorium then but could not vote on it during that meeting.

usinesses such as EZ Money on Atlanta Highway are not affected, but a city council vote Tuesday means the city will halt the licensing of new title and payday loan businesses for three months. (Janita Poe/JPoe@al.com)

At the state level, lawmakers also have attempted to pass laws to better regularly the industry during the last Alabama Legislature session.

In April, the senate banking and insurance committee approved a bill to lower the fees charged by payday lenders, to limit the number of loans a consumer could receive and to set up a database to keep track of loans.

Proponents of the state bill said payday loans hurt consumers and that the bill would be a good step toward tightening regulations on the business. They say the fees currently allowed equate to an annual percentage rate of more than 400 percent on a two-week loan.

But payday loan industry representatives who spoke before the committee in April said the proposed law would not allow them to remain profitable and would drive more consumers to use unregulated Internet lenders. They said the changes could put them out of business and eliminate jobs.

According to a spokesperson with the Alabama State Banking Department, the bill has not passed the House or Senate nor have any other recent bills to further regulate payday loan operations.

For more on Tuesday’s vote, please visit the Montgomery Advertiser or WSFA Channel 12 News websites.

[…]

Montgomery City Council members want moratorium on payday …

MONTGOMERY, Alabama – Two city council members on Tuesday moved to halt the licensing of more payday loan businesses until officials can study their impact on the local economy, according to a report on the WSFA Channel 12 News website.

Councilmen Richard Bollinger and Charles Smith said they were concerned about the large number of the establishments already in the area, particularly along Atlanta Highway from Ann Street to the Eastern Boulevard.

Two Montgomery city council members are trying to halt licensing of payday loan businesses which they say are increasingly visible throughout the Montgomery area, particularly along Atlanta Highway from Ann Street to the Eastern Boulevard. (Janita Poe/JPoe@al.com)

At the state level, lawmakers also have attempted to pass laws to better regularly the industry during the last Alabama Legislature session.

In April, the senate banking and insurance committee approved a bill to lower the fees charged by payday lenders, to limit the number of loans a consumer could receive and to set up a database to keep track of loans.

Proponents of the state bill said payday loans hurt consumers and that the bill would be a good step toward tightening regulations on the business. They say the fees currently allowed equate to an annual percentage rate of more than 400 percent on a two-week loan.

But payday loan industry representatives who spoke before the committee in April said the proposed law would not allow them to remain profitable and would drive more consumers to use unregulated Internet lenders. They said the changes could put them out of business and eliminate jobs.

According to a spokesperson with the Alabama State Banking Department, the bill has not passed the House or Senate nor have any other recent bills to further regulate payday loan operations.

For more on the outcome of Tuesday’s council meeting, visit the WSFA Channel 12 News website.

[…]

High-end pawn shops solve small business cash crunch

By Deborah L. Cohen

CHICAGO (Reuters) – When Marc Kaye needed a loan to fund his boutique insurance firm at a time when payroll, his kids’ college tuition and a mortgage payment were all draining his cash reserves, he didn’t go to a bank.

Instead, he pulled a 1940s Picasso pencil drawing off his living room wall and made an appointment with Borro (http://borro.com), a high-end pawnbroker. Borro did not require mounds of paperwork, did not care about his credit rating and did not put him through the third degree over how the money would be used.

“I needed some immediate cash,” says Kaye, who quickly got a six-month loan of $39,500, agreeing to a monthly interest rate of 3 percent plus about $175 in processing fees. “I had never pawned anything before.”

Kaye, based in New York, represents the type of upscale customer that those in the pawn broking industry say is becoming more prevalent – a small business owner facing a cash crunch. To serve this clientele, a specialized niche of pawnbrokers is gaining traction, defying the industry’s reputation as the lenders of last resort.

Some offer in-person services in well-appointed offices, while others give customers the privacy of secure transactions over the Internet. The segment is developing at a time when the industry is pushing up-market, with big national chains such as EZPawn attempting to polish their reputations with the expansion of clean, well-lit stores.

Borro, the service selected by Kaye, is somewhat of a hybrid, with a website that lets would-be borrowers make initial contact and office space to meet in-person for asset evaluations.

“We just call it online personal asset lending,” says Paul Aitken, Borro’s chief executive officer, who founded the company in 2008 in London and opened a New York office in February 2012.

HIGH-END GOODS

Borro’s customers take loans against fine jewelry, wine collections and other valuables. The company, whose average loan is $15,000, has backed everything from a Formula 1 racecar to a Beatles record contract.

The business attracts customers through its website as well as referrals from private banks. Couriers typically pick up items and deliver them to Borro’s offices, where appraisers validate their worth. There are phone calls and sometimes face-to-face meetings, depending on the circumstances. Money is then wired to the customer’s account, with the entire process taking just a few days.

“The bigger the customer, the more high-touch it is,” Aitken says.

Most borrowers, he says, will extend the terms of their loans rather than forfeit merchandise, and many come back to use the service again. Backed by $40 million in venture capital, Borro’s loan volume has doubled each year, with small businesses now accounting for 60 of every 100 dollars loaned.

At Beverly Loan Co., a brick-and-mortar pawn business outside Los Angeles that has catered to the wealthy for 75 years, business is also brisk, and small business customers are on the rise, says owner Jordan Tabach-Bank.

To meet demand for loans ranging from a few thousand dollars to $1 million, he opened a second office in the New York City’s International Gem Tower; it offers well-heeled customers secure storage for everything from GIA-certified diamonds to Patek Philippe watches.

As the economy has slowly improved, Tabach-Bank says, clients are taking out loans to start new ventures, to cover larger payrolls or to meet inventory demand for products moving off shelves more quickly than expected.

“Pawn is becoming more mainstream,” says Tabach-Bank, who has appeared on Discovery Channel’s antique dealer series “Final Offer.” “There are pawn-based TV shows, they’re talking about pawn, people are feeling more comfortable.”

But there is still an overhanging industry stigma, which is one reason for the popularity of online pawn broking sites such as Tyler, Texas-based iPawn (http://iPawn.com). iPawn’s transactions are strictly web-based, and customers receive an initial valuation of their merchandise by sending a photo.

If customers want to proceed with the process, the company obtains their valuables via a secure FedEx transaction. Once given a final offer, consumers can either take a loan or sell the asset outright.

“None of would go to a brick-and-mortar pawn shop,” says Ben De-Kalo, CEO of iPawn, which was founded in late 2011. In less than a year, loans to small business owners have increased to 50 percent from 20 percent of all the firm’s loans.

VARYING DEGREES OF COMFORT

Pawn-broking terms can vary considerably by jurisdiction, with interest rates typically higher than those on bank loans. Each state has its own regulations determining licensing, registration, reporting, records and related information.

The industry also adheres to federal regulations, including the USA Patriot Act, which requires loan customers to prove identity; the Truth in Lending Act, which calls for pawnbrokers to define the terms of the loan clearly; and Federal Trade Commission rules, to safeguard consumers’ personal information, as well as other statutes.

Customers should be wary of pawnbrokers that undervalue their assets and should scrutinize the covenants of any pawn loan, says Rohit Arora, CEO of Biz2Credit (http://biz2credit.com), an online platform that offers a variety of financing options and consulting to small businesses.

Kaye, the New York-based entrepreneur, said he would not hesitate to would take another loan with a high-end pawnbroker.

“I felt very comfortable with the process,” he said, assuring a reporter that his precious Picasso was once again hanging on his living room wall.

(The author is a Reuters contributor. The opinions expressed are her own.)

(Follow us @ReutersMoney or at http://www.reuters.com/finance/personal-finance; Editing by Lauren Young and Dan Grebler)

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