Retirement Planning & 401 K Investing Secrets to Keeping the IRS Out of Your 401K

At some point in the future, you will no longer be working where you are. Whether it’s because you retire, get laid off or change employers, it’s your responsibility to be prepared. It’s a necessity -- your retirement depends on it.

That’s because when it comes to your pension funds, you have several options open to you when you leave your job. And if you don’t know what those options are, and choose the wrong one, you will have the IRS smack dab in the middle of your IRA. This means your chances of having the opportunity for long-term tax deferred wealth building become very slim.

Option 1: Taking a lump-sum distribution (cash out)

Off the top, you will lose 20% of your accumulated money because your employer is required to withhold this amount for federal taxes. Cashing out your retirement plan is counted as receiving ordinary income, and depending on your tax bracket (ordinary rates now reach 35%) you may end up owing even more than that 20%, and that doesn’t include the state taxes that may apply as well.

Furthermore, if you are younger than 59ฝ (age 55 in some limited cases) you will be penalized for an additional 10% off the top. So, our old pal Uncle Sam just slashed your retirement savings you have accumulated for your Golden Years by a third or more!

Avoid this entirely. (In fact, it’s difficult to even think of it as an “option.”)

For example, Dan, age 50, left his job. He had $100,000 in his employer's 401(k) plan. Dan decided to take the money from the plan and open a self-directed IRA account. As a result Dan's former employer sent him a distribution check for $80,000 -- Dan's $100,000 account balance, less 20% withholding. To avoid all income taxes and penalties, Dan must not only deposit the $80,000 check within 60 days of the distribution, he also must deposit $20,000 (the amount withheld by his employer) by that same date. The $20,000 must come from sources outside of the distribution. If Dan does not have $20,000 from other sources, that amount will be treated as a distribution and will be subject to income taxes and penalties.

Sure, Dan will get this $20,000 back in the form of taxes withheld when he files his tax return, but that could take a number of months. Why go through this hassle when using the correct transfer method will avoid the 20% withholding and will not make you scramble to find funds to cover the withholding amount?

Build Your Wealth and Retire Financially Secure With Your 3 Other Options

Your other options include (1) leaving your money with your former employer’s plan; (2) rolling it over to your new employer; or (3) rolling it over to an IRA.

Each of these options will help keep the IRS out of your IRA, if you choose wisely and follow all the rules, which can be complex. However, there’s more to consider than merely the tax implications. What about growth? Safety? The next Enron?

Retire Financially Sound or Retire With Debt – It’s Your Responsibility To Make The Right Choice

So, in conclusion, taking a lump-sum distribution (cash out) from your 401K means that all the money you withdraw will be subject to income tax at ordinary income rates that now reach 35%. And don’t forget that additional penalty of 10 percent on top of the ordinary income tax if you leave your job before age 55. This will leave you with no tax deferred wealth building for you and your family, which means there is a good chance you will not retire financially secure. Is that what you want for you and your family?

Avoiding all the pitfalls and dangers can be accomplished by choosing the right kind of rollover for your IRA, based on your specific, individual and unique situation.

Remember, this is your retirement nest egg. The better you can protect it and invest it, the farther along the road to a glorious retirement you will find yourself.

Paul Hooper, President of Marketracker Capital Management, Inc. can help you keep the IRS out of your IRA. Learn how to make smarter choices with your money by emailing paul@marketrackeronline.com to receive a FREE SPECIAL REPORT full of ideas and tips on how to keep the IRS out of your IRA and roll it over in a way that will lead you to a life of prosperity. Be sure to include SPECIAL REPORT in the subject line to ensure a safe delivery.

[tags]Retirement Planning, 401K, IRS, pension funds, wealth, finance[/tags]

Retirement Options

A wide variety of retirement planning options can meet your projected needs. Some are funded by your employer, others are funded by you. Keep in mind that in most cases, withdrawals made before age 59 1/2 are subject to a 10 percent penalty, and withdrawals in most cases must begin by April 1 of the year after you turn age 70 1/2.

Income taxes are also due upon withdrawal in most cases. This list describes 10 of the most common options available to you.

Defined benefit pension: provides a specific monthly benefit from the time you retire until you die. This monthly benefit is often a percentage of your final salary multiplied by the number of years you’ve been with the company. Defined benefit pensions are funded completely by your employer.
Money purchase pension: provides either a lump-sum payment or a series of monthly payments. The benefit size depends on the size of the contributions to the plan. The employer funds money purchase pension plans, although some do allow employee contributions.

Profit-sharing plan: employer funded from comanpy profits; employee contributions are usually optional. You will normally receive this benefit as a lump sum. The company’s contributions — and thus your retirement benefit — may depend on the company’s profits. If a profit-sharing plan is set up as a 401(k) plan, additional employee contributions may be tax deductible.

Savings plan: provides a lump-sum payment at your retirement. You, the employee, fund savings plans although employers may also contribute. If a savings plan is set up as a 401(k) plan, employee contributions may be tax deductible.

Employee stock ownership plan (ESOP): a plan where the employer periodically contributes company stock toward an employee’s retirement plan. Employee stock ownership plans may provide a single payment of stock shares at retirement. Upon reaching age 55, with 10 or more years of plan participation, you have the option of diversifying your ESOP account up to 25 percent of the value. This continues until age 60, at which time you have a one-time option to diversify up to 50 percent of the account.

Tax-sheltered annuities or 403(b) plans: these plans are offered by tax-exempt and educational organizations. When retiring, employees have a choice of a lump sum or a series of monthly payments. These plans are funded by tax deductible employee contributions.

Individual retirement account or IRA: available to nearly every wage earner at any salary and are funded only by individual contributions. IRAs are held in an account with a bank, brokerage firm, insurance company, mutual fund company, credit union, or savings association. They will provide either a lump-sum payment or periodic withdrawals upon retirement and come in two basic types of IRAs: traditional and Roth. Contributions to traditional IRAs may be tax deductible and are taxed upon withdrawal, whereas contributions to Roth IRAs are not tax deductible but qualified withdrawals are tax-free.

Keogh plans: specifically designed for self-employed people. They are funded by wage-earner contributions and provide either a lump-sum payment or periodic withdrawals upon retirement. Keogh plans have the same investment opportunities as IRAs and the contributions are tax deductible within certain limitations.

Simplified employee pensions: are designed for small businesses. Like IRAs, they provide either a lump-sum payment or periodic withdrawals upon retirement. Unlike an IRA, the employer is the primary contributor, although some simplified employee pensions do allow employee contributions. SEPs are usually held in the same types of accounts that hold IRAs.

Savings Incentive Match Plans for Employees: these SIMPLE plans are designed for small businesses. They can be set up either as IRAs or as deferred arrangements such as 401(k)s. The employee funds them on a pre-tax basis, and employers make matching contributions. Principal and interest grow tax deferred.

Roger Sorensen

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[tags]retirement planning,financial planning,wealth building,retirement tips,retirement finances[/tags]

'Ready' and 'Set' Come Before 'Go' the Worth of Research Prior to a Business Venture is Immeasurabl

There are a number of unique - and important - aspects to bear in mind when running a small business; there is, for instance, a higher probability that a small business owner will fulfil dealings directly with a client rather than working with - or having the client work with - various intermediary bodies which characterise larger businesses. Subsequently, small business owners often have a good chance of gaining and establishing a certain familiarity with their clients - which certainly has its advantages. When business owners know their clients well, they can better identify, understand and satisfy client needs and requirements; but at the same time, they need to ensure that they're doing everything possible to optimise the profitability and success of their own business.

For anyone thinking about starting a small business, or perhaps in the process of doing so, it's important to research all the valuable resources which are available. Starting a business is undeniably an exciting venture to undertake; yet it can also become an overwhelming and exhausting experience if the right kind of support is not sought out in time. Before even beginning the process of establishing a new business, it is essential to take into account all the facts regarding business plans, marketing, loans and financing, and insurance. Gaining access to various targeted opportunity profiles in order to get an idea as to the constituents of starting a business within a specific industry can be a worthwhile endeavour.

Marketing can make a world of difference for any business - not only because it attracts and retains customers, but because it enables businesses to monitor the changing needs within their given industry. There are a number of effective means through which to initiate or enhance a marketing scheme for a small business; and whether the information is gained through an external marketing company or by attending marketing seminars and personally taking on the task as an internal project, you can expect to see results.

Obtaining a suitable financing plan or a loan will also prove to be another significant process in the establishment of any business; and because every business is different, it's essential for finance plans or loans to adapt to changing circumstances accordingly. There are a number of specialist small business finance institutions which offer manageable loan packages to cater specifically to the needs of small businesses - so it is possible to ensure the right package is obtained for any individual business needs. And once the loan has been granted to begin the building of the business, the next step is to consider the other various financial services such as business banking or accounting services, which are required. These can usually be obtained from other providers, or are often made available along with the loan, through a single establishment, so it is simple to get all the help you need - without additional hassle.

Insurance is yet another vital aspect of starting up a business; a comprehensive insurance plan can provide peace of mind, as it will allow a chance to focus on running the business rather than on all the things which could go wrong. Break-ins, damage, and even injuries are covered through various plans - so energy can be focused and placed where it really counts.

Whether the aim is to start a new business or to expand a current existing company, there are a number of resources which can be turned to for advice and support. Because when it comes to a small business, the efforts required to make it a success are anything but small.

Michael is a keen writer living in Edinburgh. Michael's Website: Taxis Belfast

[tags]Small business, business finance, business startup, new business[/tags]

Purchase Order Finance - Your Tool For Unlimited Sales

Do you sell to the government or to large companies? Do you regularly get purchase orders that stretch your company’s ability to deliver? Lastly, if you had financing to cover all your supplier costs, could you sell more? Much more?

If you answered yes to any of these questions, then purchase order financing could help your business grow.

Purchase order financing is a way of financing sales that has been gaining popularity with US and Canadian businesses. It offers a very simple proposition. If you have an order from a large credit worthy business (or government agency), then the financing company will provide you with the necessary funding to fulfill your supplier payments and make the sale. Call it sales based financing. It works well for resellers, distributors and wholesalers, although it can also be used in other industries.

Here is how purchase order financing works. Let’s say that you own a company that has been getting progressively larger orders, tightening your cash flow. After setting up a purchase order financing agreement, this is how your sales financing would work:

1. You get an order from a client

2. The purchase order finance company handles up to 100% of your supplier payments (by direct payment or letter of credit)

3. The order is fulfilled and the goods are delivered

4. The transaction is settled, once the client pays their invoices

As you can see, purchase order financing allows you to leverage the resources of the financing company and allows you to increase your sales. With PO financing, lack of cash flow will never be a reason to lose a sale.

As opposed to a business loan from a bank, purchase order financing is very easy to obtain and can be set up in days. The main requirement is to have valid orders from good commercial or government clients. Most banks won’t offer this type of financing, but you can get it from a factoring company. As a matter of fact, purchase order financing and invoice factoring are frequently combined to help reduce the costs of the transaction.

So, if your purchase orders are piling up, be sure to consider financing with purchase order funding.

About Commercial Capital LLC

Interested in purchase order financing? We are purchase order finance experts can provide you with a purchase order financing proposal. For more information, call Marco Terry at (866) 730 1922 (toll free USA / Canada).

[tags]purchase order financing, purchase order funding,po funding,po financing,factoring[/tags]

Property Investments

With the UK property market cooling off and rate hikes looking certain, property investors are now looking outside the UK for their investments.

Bulgaria is set to join the EU next year, this combined with cheap resources have turned it into an attractive proposition for International property investors. Bansko is one of the favourite locations, once a small rural community it now resembles a large building site; it has even been given the nickname ‘Little England’. It all started in Bansko with the introduction of the ski gondola in 2002, from then it has not looked back. With Bulgaria’s fortunes set to change and property value 5 times cheaper than France, there is little wonder that property investors worldwide are now taking an interest.

The amount of developments planned at Bansko is now viewed as excessive, this has led to a suspension of planning permission for any future developments in the area. This and the sheer demand have over inflated the property prices in the area, currently a 1 bedroom apartment is selling for approx ฃ50,000. Still this is viewed as cheap compared to property at other European ski resorts.

A good rental income from these properties is possible due to the cheap cost of living in Bulgaria, an example is, a pint of beer currently costs in the region of 40p. The only downside to renting an apartment would be the competition form the other 1000’s of apartments. The amount of apartments could also prove problematic for any investor looking to sell in the future.

My own research has made me look away from Bansko, recently I came across a ski-golf development at the foot of the Rila Mountains, just a few miles away from the ski resort of Borovets. The development due for completion in 2008 is being constructed around a Nicklaus golf course. The Private gated complex will have restricted access to property owners and their tenants.

As this development combines golf and skiing it is viewed as a great potential for any property investor. There is no wonder the off-plan villas are being snapped up.

Peter Arkwright recently retired from the military; he is now the Managing Director of Bizseller4u Ltd - Providing business solutions in sales, advertising, funding, debt collection and recovery plans

For details on this development visit www.bulgariasfinest.com

If you would like any more information on this subject then please visit our website at www.bizseller4u.com

This article is free to republish with the signature block

[tags]business for sale, small business for sale, businesses for sale, small businesses for sale, free adv[/tags]

PMI - An Integral Part Of Value Driven M&A Success

A merger or acquisition is a corporate intervention, sometimes with a cataclysmic force, that if left unchecked may destroy the acquirer as well as the acquired. Defecting key personnel, competitor reactions, poor customer service and supplier unrest can upset the best deals. Ideally the big fish in the deal will lead all the little fish through these decisions and actions but few companies make enough acquisitions to develop a tested methodology. As a result most organizations treat post-acquisition integrations not as repeatable processes but as hurdles to overcome, so everyone can get back to business as usual. Quick up front planning, post closing action and strong gate keeping are necessary to ensure the desired results are achieved.

Combining multiple organizations creates the need for a multitude of decisions such as reporting relationships, strategic and operational controls, budgeting and performance requirements, organizational structures and staffing, policy integration, performance measurements, and reward systems. Combining businesses requires techniques and expertise far different from that required to run the businesses. A successful implementation takes transformation management expertise specific to managing the integration process.

Acquisitions are normally justified on the basis of the increased value that’s anticipated post merger. On paper they all look great but no matter how good it looks on paper value isn’t created until after the dust settles, when people from the combining organizations collaborate to create the new, larger, more valuable, more productive entity. Unfortunately, mergers and acquisitions have a habit of not meeting expectations. Why? Because of poor planning; roadblocks were not eliminated, expectations weren’t clearly communicated, politics and positioning reared its ugly head, and what plan there was was never executed. Increased performance expectation drift further and further from reality.

Successfully joining processes, procedures and cultures is better accommodated by continuing to operate each entity independently while the same time transitioning to a new enterprise. Doing the transformation in this manner usually results in a more rapid integration with the least amount of value destruction in the process. It minimizes the loss of capabilities and disruption of services.

Rather than trying to implement all changes at once, integration managers can focus their efforts on core performance areas. PMI, or Post-Merger Integration, is designed to identify and prioritize the keys to value creation in order to simplify some very complex challenges. The connections between strategy and operations are identified, and linked to performance metrics. While the PMI process coordinates strategy and structure re-engineering, human resource effectiveness and efficiency, systems and technology, and financial engineering its true purpose is to drive:

• Competitive Advantage

• Satisfied Customers

• Operating Cash Flow

• Enterprise Value

• Applied Capabilities

• Mission & Strategy

The PMI process anticipates a coordinated transition effort under an integration manager rather than leaving business unit manager to integrate in their unit using their preferred technique, . A coordinated PMI Implementation cycle may take several months, and sometimes quarters, to complete, depending on complexity, condition of the enterprise and management’s prior experience. With a coordinated integration, however, progress can be steadily made and measured and the process becomes both scalable and repeatable.

To get the benefits of the merger and to free capacity for additional acquisition opportunities without losing momentum as business conditions change the post merger integration period needs to be shortened as much as practical and performed efficiently . An acquisition that is not operating with a positive cash flow within the first year rarely, if ever, generate a positive returns without massive restructuring.

The PMI process was specifically designed to be implemented by the acquirer independent regardless of the level of experience. The process is effective without regard to type and size of integration, whether it public or private or if the scope includes an entire multinational concern or a single business unit that is linked to one or several organizations. These best practices will result in sustained performance, broad acceptance and a cost-effective implementation.

The PMI process is divided into two cycles: Planning and Implementation. Both cycles serve as guide books to lead organizations through the tasks needed to effectively and efficiently produce results. It enables substantive business improvement by addressing all the synergies, dependencies and interrelationships included in a well-managed integration project.

Dan Light is I am a target-driven professional and MBA with over 30 years of experience in modeling, business modeling, and process reengineering. He has planned and managed projects valued between $13K and $20M without a cost overrun or delay in delivery. In a 12-year period, he generated over $10B in new revenue. A superior communicator and leader he has directed teams of up to 160 professionals.

Dan gets things done in companies ranging in size from start-ups to the Fortune 25.

[tags]merger, acquisition, value, M&A,success, integration, management, finance, metrics, performance,[/tags]

One Income Source Is Not Enough!

My personal opinion is that in today’s new economy, it is wise to have multiple income streams. Reliance on one income source poses a risk to individuals, entrepreneurs, and even large corporations. A single-source income stream, rather it comes from a job, a million-dollar customer, or a highly targeted market segment can dry up for any number of reasons.

I live in Michigan where many people derive their income from the auto industry. A downturn in that industry can affect masses of people in various industries because their critical source-point is the auto industry. In fact, before I got laid off from IBM last year, Ford was their biggest client here in Michigan. As Ford started making drastic cuts, so did IBM and many other IT consulting companies. This trend happened over and over again and our mid-western economy has still not fully recovered.

People still assume that a job provides security but the reality of unemployment tells an entirely different story. I was laid off for 7 months and I had plenty of time to come to terms with my own financial vulnerability. Financial consultants have always advised a person to have 6 months income saved up and as sound as this advice is, many people don’t even have 2 months income saved up; they are actually living from paycheck to paycheck.

Over my 20+ year career, I’ve gone through the down-sizing fiasco more than 5 times and I would be quite foolish to pretend that I can depend on a job to be there just because I need the money. Jobs are good…they keep the economy flowing…people get paid…people spend money…the money flows in and out and everybody’s happy. But…and this is a big BUT, jobs cannot be viewed as the single source of personal long-term security. Our view of jobs have to change to match the reality and the reality is - we’d better learn to manage our money well and we’d better learn to generate income from multiple sources if we want to create financial security.

There are a few people who don’t have to worry about money now or in the future. They have money handled; their income is quite substantial, their lifestyle is affordable, their savings, investments, and retirement plans are unassailable. Most wealthy people cannot even claim this kind of stability because their lifestyles are exorbitant and out of control. But there are people who simply have no money worries; they made the right career choice, they love their work, they handle their career and money like an expert. How many people do you know that fall into this category? Not very many, right.

It’s true, money doesn’t buy happiness but don’t let anyone trick you into believing that you can have a quality life without certain financial means. In western society, having a certain income is essential to survival. I know everyone who reads this article may not be suited to join my business but everyone who is looking for way to give themselves some financial breathing room should consider three things, controlling the money going out, diversifying the income streams, and increasing the money coming in. Starting a part-time home-based business is an excellent way to do this. This is one of very few ways that a person can legitimately reduce their tax liabilities and take the money they save and use it to make more money.

Robin Harris is a DesignerLife Coach who specializes in helping people get money handled once and for all. You can find out more about acquiring your free copy of the Self-care Kit which includes the amazing Money Module at http://www.how-are-you-doing.com

[tags]money, finances, business, job, debt, home-based business, starting a business[/tags]

Offshore Banking Services

Offshore banking simply means to have your bank accounts in a bank outside your own country. It is therefore easy to find offshore banks that offer exactly the same services as you would expect from a bank in your own city.

All offshore banks will of course let you deposit and withdraw money. Offshore banks normally issue credit cards to help you do so. A credit card from an offshore bank works just like any other credit card and it can often be used in ATMs around the world.

In addition, an offshore bank would typically offer the following services to its private customers:

• Money transmissions
  
• Loans
  
• Currency Exchange
  
• Investment Management
  
• Fund Management
  

Fund and investment management means that the bank is managing securities (stocks, bonds, etc.) for the bank customers. This is also known as portfolio management or money management.

Depending on the size of the bank, it might offer additional services. It is normal for offshore banks to charge money for use of their services. The price of using the services varies a lot from one bank to the other.

Most of the services are used through the Internet since offshore banks are situated far from their customers. An offshore bank will typically have an advanced and very secure website where you can handle your accounts, access services and communicate with the bank.

The services mentioned here applies for private customers in an offshore bank. The banks will typically have a set of extra services for company customers.

Mads Phican is a successful entrepreneur. He studies offshore finance and runs a popular offshore banking website: http://www.offshorebankingcentral.com

[tags]offshore banking, banking services, offshore bank, bank account, bank accounts, personal finance[/tags]

North Carolina Farm Loans

If you live in North Carolina, you know that farming plays a significant role in the North Carolina economy. With just over 9 million residents, the “Old North State” features many farms producing a wide variety of agricultural products. Indeed, North Carolina is a leader in the production of tobacco, grapes, sweet potatoes, peanuts, and pork; Tarheel products are sold via grocers all across America. So, how can you get started? By reading the following ideas I have listed.

Financial Institutions – Commercial banks, savings banks, savings and loan institutions as well as credit unions are all good places to go for your North Carolina farm loan. You need to bring with you detailed monetary information including a list of your assets, pay stubs, recommendations, and more. While at the lending institution you will be given the suitable forms and disclosures to help you get going. Depending on which lending institution you select, they may have a distinct North Carolina Farm Loan division or it may be part of their small business association section.

Government Agencies – The state of North Carolina is a large provider of government services. Naturally, they want their multibillion dollar industry to prosper and the proper agencies are in place to help you with your North Carolina Farm Loan. Call Raleigh to find out which agency is best for you.

Farm Associations – Farmers in your area probably belong to a farm association. Pay the association a call and see if they offer North Carolina Farm Loan plans. Some may act as an agent for the U.S. federal government’s Farm Service Agency [part of the USDA] and can then direct you accordingly. Regardless, check with the association for their recommendations.

You can also borrow against your own assets and craft your own North Carolina Farm Loan. If you have equity in a home, a 401(k) plan, a life insurance policy, or other assets these may turn out to be worthy funding devices for your new farm.

North Carolina Farm Loans are available to you, especially if your credit is very good. Make inquiries, talk with other farmers, and find the loan that is best for you. Soon, you will be tilling soil and planting the crops that will adorn American supper tables.

Copyright 2006 – For additional information regarding Matt Keegan, The Article Writer, please visit his blog for wit, quips, and freelance writing tips.

[tags]North Carolina farm loans, Raleigh, Charlotte, Winston-Salem, Durham, Chapel Hill, Cary, Wake County[/tags]

Money Matters-Things Banks & Other Lenders Won't Tell You

Everyday people go to the bank with a loan request written on the back of a napkin and end up getting denied for a loan. Ever wondered why? The obvious reason is they are not qualified for the loan because of a lack of employment, insufficient income, too much debt, poor credit, no previous credit or any combination of these factors. But are these the only reasons? Maybe, maybe not. Keep in mind that bankers are on a salary…they get paid the same amount of money whether they work hard on your deal or not. You see, lenders tend to group people into categories known as A, B or C-borrowers.

A-borrowers tend to be perfect people with perfect credit and high income to debt ratio. B-borrowers tend to be people who have decent income, decent credit and a decent income to debt ratio. C-borrowers, on the other hand, have marginal income and marginal to poor credit ratings. And then there are the projects…lenders also tend to group projects into categories known as A, B and C-projects. Here are a few examples of how projects are ranked: A-projects are the kinds of loans the lender likes to do…class-A residential home loans from, say, $100.000.00 and up. B-projects may be a used car loan…C-projects could include a debt consolidation loan for a marginal borrower. C-borrowers and projects are often quickly denied. You can see more clearly now how borrowers and projects are basically ranked in the mind of lenders.

Remember; bankers are human and humans tend to take the path of least resistance. If you were a banker, would you rather do a slam-dunk million dollar loan to someone who didn’t need the money or work real hard (day in and day out) trying to fund risky C-projects for marginal borrowers? Most people are not perfect borrowers and you may fall into this category. So what do you do to increase your chances of getting the loan you need? Here’s a few secrets that can help get the loans you need: First, ask yourself a few questions… Does your loan request make economic sense? If it doesn’t make sense to you, it probably won’t impress the lender. What can you do to structure the loan to make sense? Secondly, if you were a lender, would you (really) loan yourself the money considering your income, credit and project?

Whether you answer yes or no, you should identify why or why not? Do you have a professional bank package or is your loan request written on the back of a napkin? By having a professional bank package you will get the attention of the lender because most people don’t know how to assemble a bank package. By having a bank package, you can move yourself from a C-borrower to a B-borrower status in the mind of a lender. If you are a B-borrower you can move to A-borrower status. Why? By creating a bank package you have done your homework (and much of the work the lender needs to make a decision) in a format that professionally communicates with the lender. Here’s an outline for a basic bank package for consumer (or business) loan proposals in the order shown below:

1) Cover letter (to the lender, lending institution, brief overview of package and purpose)

2) Loan summary (purpose of loan, use of funds, payback plan, economic justification, etc.)

3) Table of contents

4) Standard bank application for review (get it from the bank)

5) Statement of assets (everything you own that can be used as collateral)

6) Statement of credit debt (all outstanding debts with totals and account numbers)

7) Photo-copies last two (2) years of tax returns

8) Photo-copies last two (2) years of payroll stubs

9) Supporting documentation (borrower’s resume’, explain past credit problems, documents, etc.)

You want to organize your bank package using an inexpensive 3-ring binder. A bank package does not guarantee financing but it can greatly improve your chances for funding tough deals.

Copyright ฉ 2006
James W. Hart, IV
All Rights reserved

James W. Hart, IV, a consumer advocate and CEO of Smart Books Publishing http://www.smart67.com has been involved in the field of residential and commercial real estate mortgage financing since 1987. Hart, previously licensed to engage in the sale of real estate in the state of Ohio, has been directly involved in the origination of residential and commercial mortgage financing and has worked with residential and commercial mortgage lenders, large commercial mortgage banking firms and life insurance companies for financing. Hart is an honorably discharged veteran of the U.S. Army, graduate of the University of Toledo and graduate of the Cleveland Institute of electronics. He is a member of the National Panel of Consumer Arbitrators and the Council of Better Business Bureaus, Inc. During 1992/93 Mr. Hart appeared on a number of radio and TV stations throughout the U.S. including WJR-AM, WWWE-AM, WHUR-FM, WRC-AM, WLW-AM, WTVN-AM, WSPD-AM, KDKA-AM, KBGS-AM and CNBC-TV and many others…

[tags]Money, Cash, Banking, Financing, Loans, Lending, Personal Finance, bankruptcy[/tags]