Many small businesses have struggled to stay open and operate profitably in the current market conditions. A raise in prices and low cashflow can make it difficult for small businesses to operate. Business financing can help owners fund their businesses.
The Small Business Administration (SBA) helps small businesses obtain funding funding through different types of loans, including direct loans for disaster recovery and COVID-19 relief programs. The loans offered can be classified as 7(a) loans, 504 loans, Microloans
7(a) loans are the best option when real estate is part of a business purchase, but it can also be used for:
- Short- and long-term working capital
- Refinance current business debt
- Purchase furniture, fixtures, and supplies
504 loans are long-term, fixed-rate financing to purchase or repair real estate, equipment, machinery, or other assets
Microloans are $50,000 or less loans that help small businesses and certain not-for-profit childcare centers start up and expand.
Visit the Small Business Administration website at: Loans (sba.gov)
When it comes to credit reporting, you must know your rights. Here is an overview of the Federal Fair Credit Reporting Act
Your rights under the Fair Credit Reporting Act include:
- You have the right to receive a copy of your credit report. The copy of your report must contain all of the information in your file at the time of your request.
- If you contest the completeness or accuracy of information in your report, you may file a dispute with the CRA and with the company that furnished the information to the CRA. Generally both the CRA and the furnisher of information are legally obligated to reinvestigate your dispute as long as it is not frivolous.
- CRA’s must correct or remove inaccurate, incomplete or unverifiable information in their files. CRA’s must remove obsolete information in their files.
- If you are a victim of identity theft or are on active duty with the military, you have more rights under the FCRA.
- Only those with a permitted purpose or with your express permission may access your file.
- Generally employers must have your express written permission to obtain your report.
- Any company that denies your application, or takes an adverse action against you, based on information obtained from a CRA, must inform you of the adverse action and must supply you with the name and address of the CRA they used.
- You have the right to a free copy of your credit report in numerous instances including when your application for credit or employment is adversely affected because of information supplied by the CRA. You can get a free credit report each year in any case.
- You may opt-out of lists provided by the national credit bureaus that are based on your credit file.
- You may sue under the FCRA for violations of the Act.
- Credit scores are available to you on request from credit reporting agencies and sometimes from mortgage lenders. There may be a fee for the score.
If you have any issues with the information contained in your credit report, please call or email us for assistance. We have the necessary experience and knowledge to deal directly with the reporting agencies. In most cases we can get the negative information removed or corrected to improve your score and get you the loan or mortgage you desire.
Conventional loans are not associated, insured or guaranteed by VA, FHA or USDA. A minimum of 5%, or 3% in some cases, of the purchase price must be paid as down payment. Additionally, private mortgage insurance must be paid, if the down payment is less than 20%.
DYK: If you pay 20% or more of home purchase price as down payment, you are not required to pay the private mortgage insurance
When co-signing on a loan you enter into an agreement to become responsible for the re-payment of the loan, including the late and legal fees, if the borrower defaults. However, the financial institution can lawfully go after the co-signer at any time.
If you do agree to co-sign on a loan for someone, you can request that the lender agrees that it will refrain from collecting from you unless the primary borrower defaults. Additionally, you can request that your co-signer agreement includes that your liability is limited to the unpaid principal and not any late or legal fees.
Upon co-signing you may have to provide financial documents to the lender just as the primary borrower and you will assume the same legal responsibility for the repayment of the debt as the borrower. Remember that any late payments will affect your credit as well.