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Archive for the ‘income’ Category

Short term

28 Jun

What is a short term loan?

Short term loans are offered by different lenders, ranging from trusted payday loan lenders to even colleges. Short term loans are due within a set amount of time, usually less than a year, depending on the lending institution you used to receive the loan.

Some colleges offer short term loans to students. The borrower must be a student and must be able to show that the loan can be repaid in a certain amount of time. If a student is expected to receive student loans or other student aid, the college may lend a higher amount.

Short term loans are offered by brick and mortar stores around cities or via the internet. These are unsecured, high interest loans that are usually due with the deposit of the borrower’s next paycheck. For example, a payday advance company may offer a loan and charge $30 for each $100 borrowed.

Banks also offer short term loans. These loans can have a maturity date as early as 60 to 120 days from the date of inception of the loan. Bank short term loans can also mature up to one to three years after the inception of the loan. The terms depend on the bank and the amount of money borrowed.

Many banks may also require collateral, depending again, on the amount borrowed. The smaller the loan, the less likely the lender or bank is to ask for collateral. The application process is also a bit longer because the bank will check the borrower’s credit to be sure the borrower has the ability to pay the loan back. They may also look at a borrower’s personal credit score to determine whether to grant a short term loan. Banks may offer short term loans for a lower annual percentage rate than a payday loan service.

If you read the cautionary literature handed out by nonprofit debt management agencies and by consumer advocacy groups, short term loans in any form may seem terrifying. However, they can provide a lifeline for you if extraordinary circumstances put you in the position of needing cash fast.

 
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Posted in business, business competition, credit score, economy, finances, get out of debt, income, money tips, payday loans, personal finances

 

The leveraged loan spreads

05 Dec

The following types of CDOs are rather common:

  • Investment grade CDOs (synthetic)
  • Collateralized loan obligations/Synthetic balance sheet CLOs
  • High-yield CBOs/Emerging market CBOs

A typical feature of collateralized loan obligations (CLOs) is that all loan collateral is typically in a senior and secured position in the borrower’s capital structure. Various covenants also serve to enhance the secured nature of loans. Loans are typically issued as floating rate instruments and have shorter average lives than high-yield CBOs. The single most important differentiating factor between loans and high-yield bonds is the senior secured nature of the loans (much higher recoveries and actually lower default probability). It shows the leveraged loan spreads.

Adjusting CDS spreads and loans in the investment grade universe for risk (default and recovery rate) and reward (loan pricing) shows that the CDS loan basis should be rather positive.

 
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Posted in credit, finances, income, making money

 

Developing a credit’s lifetime value

23 Oct

The concept of customer lifetime value is not new, but it is worth considering how customer loyalty and repeat business develop profitability.

Most obviously, the longer customers stay with the business the more they will spend over time. This is profitable because having sold once, there is likely to be less need to market or sell to them to attract them back; the only requirement is to focus on the quality of the value proposition. Loyal customers also provide a base on which to build market share, which in turn provides a platform from which to develop new commercial opportunities. For example, it can be used to attract advertisers or to entrench the business’s position in the market.

Repeat business often leads to referral revenue. If customers are pleased with the service they will tell others, and they can be offered incentives to do so. Satisfied customers may be receptive to new products as well as (or instead of) their original purchase. By clearly understanding what the customer wants, you can cross-sell other products.

 
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Posted in income, international markets, loans guide, personal finances, pricing policy, revenue, shareholders, shares

 

The road to success: credit to buy

15 Oct

In the early 1990s, Ryder, the largest truck-leasing company in the world, suffered a steady decline in sales as competitors eroded its business. The company’s main response was to use information more effectively to benefit customers. Its approach had three elements:

To help customers buy. Ryder made it as easy as possible for customers to buy its services. For example, it produced a brochure explaining why customers should buy its damage insurance, and another offering other supplies and accessories. It also recognised that customers would want to make comparisons among competitors (they were doing this anyway), so it produced a truck comparison chart, highlighting its competitiveness and reassuring potential customers.

To help customers use the service. Ryder provided a free guide to moving, The Mover’s Advantage, in Spanish and English, to every current and potential customer. It understood why customers used its trucks and saw the advantage in helping them.

To help customers adapt their usage. As well as ensuring that each outlet displayed a strong commitment to customer service and corporate identity, Ryder offered new products and services from its outlets. This included information about the advantages of using Ryder’s towing equipment and longer-term discount rates for returning customers.

 
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Posted in credit cards, credit score, economy, finances, get out of debt, income, international markets

 

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