 |
Family Business Advisors
Selected Newsletter Articles
Business Owners Profiled
B2B Peer Groups
Effectiveness Strategies
Financial Growth Resources
Strategic Conversations
Strategic Planning Toolkit
Leadership Development
Experience Exchange
Managing Differences
Association Presentations
Family Business Forum
Search iBizResources.com
Search The Entire Internet
Locate Congress @ Home
2,000 Contributed Articles
Breaking News 24/7/365
Keep informed, add our breaking news feed to your web site.
eBay's Most Popular Searches We have the 3,000 most searched for items, listed alphabetically.
Thousands of Government Programs...
publications, programs, grants, and documents. A free search engine for you!.
Take Control Of The Internet! Connect with prospects, vendors, suppliers, customers, the media - put the Internet to do for you TODAY!
Add Instant Audio...
to your web site. It will revolutionize how you connect with prospects, customers & clients!
Leadership University
Professional development systems for individuals and organizations!
Small Business Marketing Attract new customers, sell more to your existing customers, and bring them back more often!
Email Marketing Resources Manage all your email, newsletters, messages, and mailings from ONE user-friendly Message Control Center!
Strategic Conversations
Enhanced communications for life. Revolutionize your professional & business effectiveness!
Database Marketing System
Keep in continual contact with your prospects and clients. Competitively priced for companies and professionals!
Sales Training Process
Learn how to find, identify, and sell to the people most likely to buy your products and services!
|
©1999-2007 www.iBizResources.com
® All rights reserved
|
|
 |
Self-Liquidating Loans - Fact or Fiction?
Read What Others Are Saying. Add Your Comments Too!
FICTION! There is no such thing as a self-liquidating "LOAN." If you walk into a bank and ask for a self liquidating loan, they'll look at you as though you were nuts!
You may see ads promising -
- Self-Liquidating "LOANS!" - Investment Capital Overnight! - Your "LOAN" has been Approved! - BORROW Money And Never Pay Back! - etc.
A self-liquidating "LOAN" is fiction. You will never get a loan that you will never have to pay back from anybody. You need to be very careful when you are presented with the opportunity to get "money for nothing!"
A true, self liquidating "LOAN", standing on it's own, is a pipe dream - it's perpetual motion. A loan that pays itself off is of NO benefit to the lender
-
so, Why Would They Do It? The answer is simple - they WON'T!
Con men typically ask for up-front fees to get people a Self-Liquidating Loan. "Your "Loan" Has Been Approved" is their typical ploy. Since there is NO such thing as a Self-Liquidating "Loan" this should be a tip off that all they want is your money and you will never see such a "LOAN"!
Remember the money MUST come first, and if they can't prove to you how the money will come first to create such a transaction, you will lose any money you pay to these con men. Also beware of the con men that do not charge front fees but want to see if you qualify for such a "LOAN", then notifies you later that you have been approved for a "Loan" and want you to pay points, closing costs, advance interest fees, etc.
But there is a way to use this CONCEPT!
In a Self-Liquidating Loan CONCEPT there are no such expenses! The money comes first, then the transaction is created using a Roll Account (Compensating Balance)!
A Self-Liquidating loan actually does NOT exist. I know you see several ads in many publications advertising such a loan. There has been a mystique about these loans. Many people believe that to get a so-called Self Liquidating, Loan one only needs to apply and like magic, there it is! A multi-million dollar loan with money pouring out of the envelope! Not so -but the Self-Liquidating Loan concept is done every day and you can learn how!
There is ONE way for a TYPE of self-liquidating loan to exist. Remember, I
said *type* of self-liquidating loan.
A better term for a "self liquidating loan" would be a Roll Over Loan, Roll
Program or a Compensating Balance Loan.
What is a Roll Over Loan?
Simply put - a roll over loan is a security-based loan that starts out with a
security such as a CD, zero coupon bonds, government savings bonds,
debentures, bank notes, etc. as collateral for the loan and as final payment
for the loan.
These can be purchased at a fraction of their end value and can be used as
collateral for a loan.
Example 1a:
An example would be Government Zero Coupon Bonds. These bonds can
be bought at a discount of normally 33% of the face value. A $1,000 face
value bond could be bought for around $330. The government guarantees
you a return of $1,000 or a $770 profit. Offering this secured financial
instrument to a financial institution as a compensating balance for your loan
creates a form of a self-liquidating loan. Borrow $1,000 and receive $770.
Example 1b:
Another example would be life insurance or annuity. If you have an annuity
that pays a fixed or variable amount it would be possible to instruct this
financial instrument to be used as a compensating balance for the loan you
want to take out. In fact many times the insurance company could be in a
position to arrange this form of a self-liquidating loan via an annuity.
Example 2:
You will need to find an investment group that functions in an offshore
environment. (An offshore environment provides you with higher interest
rates and higher returns on your money along with lower lending rates.) Use this
group to leverage your money, thus creating a compensating balance. This
creates, in effect, a "self liquidating" situation. In this example you not
only receive a "loan" but you will receive a residual income besides!
Final Note.
Remember, if there is no security placed up front, NO lender will even
consider providing a loan under these conditions. However, there are places
where you can find information on how to create a roll program! You just
have to find one that you can trust.
About the Author
Dave Laforge
webmaster@valtechservices.com
Webmaster of the Valtech Services Group
If you are interested in finding out more on how you can create your own roll
program, a good place to get the information you will need is at:
http://www.valtechservices.com
By: Dave Laforge
Reader's Comments:
<< Back to More Articles
|
|
