Loans are inevitable for most adults. If you buy a house or car, use a credit card or go to college, youll likely need to take out a loan. US household debt currently stands at $11.7 trillion, according to a recent Federal Reserve Bank of New York survey that draws on information from 40 million individuals.

But taking out a loan doesnt always work out well, as anyone who has dealt with a debt collector can attest. So what mistakes are you most likely to make in the loan process?

Not reading the fine print. There are always important gems of information buried in all that legalese, so you owe it to yourself to take a good look at what youre signing up for, says Leslie Tayne, a financial attorney and debt specialist who runs the Tayne Law Group PC, based in New York City.

Many people have a tendency to simply sign the dotted line, listening to the salesperson and not double-checking the agreement, Tayne says. I see this all the time.A client will come in and tell me that they didn't know about something in the loan, such as a balloon payment or increase in interest rate.

But if you sign the contract, youre telling the lender that you do know-even if you dont-which, of course, is the problem.

Taking out a loan for someone else. Co-signing is a mistake, but some people double that error by taking out a loan and giving the money to someone else.

Youd be surprised at how often this happens, says Michael Poulos, CEO of Michigan First Credit Union in Lathrup Village, Michigan. He says his staff has, on occasion, encountered loan scenarios such as parents coming in to borrow money for their children and customers needing money to bail out family members from jail. But one of the more interesting cautionary tales about borrowing money for someone else came from a man who financed a loan to buy his girlfriend her own set of wheels.

Sweet, right? But then his wife found out about the car, Poulos says.

The man then decided he didnt want to pay for the vehicle, and the girlfriend broke up with him. The car was repossessed at some point, and the mans credit score took a plunge.

Not thinking about the long term. This new loan will probably be a big part of your budget for quite a while. So buddy up to those terms and get well acquainted with that loan before you commit.

Applying for a loan, like any contract, means entering into a relationship. We actually call the members of our lending team 'relationship managers' because in any good relationship, there is honest communication and discussion, says Marty Gallagher, executive vice president and chief credit officer at Beneficial Bank, headquartered in Philadelphia. This is a process we're entering together, and we want to make sure there is a healthy conversation about goals so we can find a way to accomplish them responsibly."

Gallagher is right. The more desperate you are for the loan-ie, youre shoring up money to pay for surgery or your car is kaput and you need a replacement ASAP-the more you shouldknowhow this loan will affect your month-to-month living expenses. The last thing you need to do is solve a problem and create another one.

Letting emotions fuel your borrowing desires. Poulos says this is a classic error, and it dovetails with consumers not thinking about the long term.

People will find themselves in a crisis, or theyll become passionate about something, and theyll want a loan to fix everything. Weve had customers take out a $1,000 loan so they can hire a limo and get a hotel room for a date, not thinking about the fact that theyll be paying for this amazing night for the next 12 months, Poulos says.

He says the bank staff has had people request loans for plastic surgery. Theyve even had people calling from a casino floor to take out a loan.

That consumers do this may not be surprising, but that they admit it to the teller or bank manager might be. Then again, this is the era of oversharing. Youd be surprised what they tell you, Poulos says.



A plan to revitalize the Hill District and Uptown with tax money from a redeveloped Civic Arena site is more complicated than envisioned, say officials who hope to make public a proposal in January.

"There are a lot of moving parts," said Robert Rubinstein, acting executive director of Pittsburghs Urban Redevelopment Authority, which is crafting a plan to pay for improvements.

An agreement reached this fall by city, neighborhood and Pittsburgh Penguins officials established conditions for the proposed $440 million project. The hockey team won the development rights to the site in a 2007 deal to build Consol Energy Center.

Among conditions in Septembers agreement, the parties will borrow as much as $50 million, then use 65 percent of the anticipated increase in property tax money from the 28-acre site to pay for improvements and programs in the Hill and Uptown.

But after announcing the 20-year deal, officials learned the tax increment financing money legally cannot be used for some intended programs in the nearly 2-square-mile area -- including workforce development, job training and childhood education initiatives.

Pennsylvanias Tax Increment Financing Act, adopted in 1990, allows local governments to borrow money for infrastructure projects to spur development in blighted areas, not for social service programs, Rubinstein said. The governments use a portion, or increment, of tax money generated by development to pay the debt.

Penguins Chief Operating Officer Travis Williams said the team will do what it can to support the neighborhood programs.

"The Penguins remain committed to working with the city, county and (Pittsburgh) school board" to find money for the Community Reinvestment Fund, Williams said.

Rubinstein said officials are pondering sources of money because of the restrictive TIF.

The states Local Economic Revitalization Tax Act could allow officials to abate property taxes on the proposed US Steel headquarters building at the site, and possibly others, for up to 10 years. Up to $750,000 a year that would have been owed in taxes on the properties would go into a fund for neighborhood rebuilding.

Donations from corporations and foundations could help, as could state tax credits.

Finding money to pay for neighborhood revitalization "is key to a successful agreement," said Marimba Milliones, president and CEO of the Hill District Community Development Corp., who signed the agreement.

Its unclear how much money the URA will borrow through a TIF to support the project.

Since 1993, Pittsburgh has pursued 23 TIF projects, borrowing a combined $270.8 million to spur more than $2.8 billion in development, according to URA data. Eighteen completed TIF projects led to 14,576 permanent jobs, which was 242 more than projected.

Five projects in progress or in planning stages are projected to generate 13,231 jobs.

Pittsburgh uses tax increment financing less frequently than it once did. It approved six TIFs in 1999 alone but just nine since, URA records show. The last two TIFs, however, have been among the largest in city history: $80 million for a project to redevelop the 178-acre former LTV Steel Co. site in Hazelwood, the citys largest TIF; and $24 million for the Summerset at Frick Park residential development, the third-largest.

"Its a critical tool to enable projects that might not otherwise have been possible," said Donald F. Smith Jr., president of the Downtown-based Regional Industrial Development Corp., which is teaming with four foundations to redevelop the Hazelwood site.

The development group, doing business as Almono LP, predicts more than $1 billion in development on the site. The TIF money would be used to build infrastructure, including a road through the sprawling development, highway ramps, sanitary sewer and water lines, and a stormwater system.

Tom Fontaine is a staff writer for Trib Total Media.



by Carolyn M. Brown  -Blackenterprise.com

It's borrowing season. Leading up to the holiday season, more small businesses take out cash advances, according to industry reports. Financing continues to be a stumbling block for entrepreneurs, particularly those who have uncertain income, little or no credit history, or blemished credit. African American-owned businesses significantly lag behind their white counterparts in acquiring small business loans, angel investment, and venture capital.

Kabbage, a leading working capital lender, provides instant cash advances to grow a business. It is designed as a quicker fix for companies that need money to buy inventory, ramp up personnel, purchase equipment and more. Kabbage loans fall more within the realm of micro financing for small businesses.

Kabbage reports that it has provided $360 million this year to small businesses across the country, up from $123 million in 2013. The company has funded over $400 million to help over 100,000 businesses. Co-founder Rob Frohwein says more entrepreneurs are turning to alternative lending than ever before, especially banks are leery to lend to small businesses.

Business owners can borrow anywhere from $500 up to $100,000. Kabbage's fast, flexible business line of credit is always available. Borrowers can draw against their line as often as once a day for anything that they need.

The application process in done online and approval is made within seven minutes. Kabbage looks at factors outside of your credit score, including seller rate, years in business, transaction volume, and revenue. Kabbage determines the amount of your line of credit based on your financial information, so the more financial sites you link, the better.

Kabbage only allows you to borrow money for up to 6 months, so if you borrow $50,000, you have to pay that entire sum back (plus interest) within the 6 month time frame.  Fees are 1%-13.5% of the loan amount the first two months, and 1% for each of the remaining four months. One-sixth of the total loan amount plus the monthly fee is paid every month.

Kabbage in general doesn't charge as much interest as traditional banks. However, if you want to take out larger sums and need more than 6 months to pay them back, it might be smarter to try for a traditional bank loan.


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The only thing Ed Miliband remembers is how to borrow money Ed Milibands speech on the deficit shows Labour refuses to change, says minister Priti Patel