Essay Loan Loans From The Bank

Essay Loan Loans From The Bank

Length: 1389 words (4 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Bank loans are loans from the bank which is based on the future value of the business. Banks are very particular when it comes to granting loans because they want to be sure that the borrower will be able to repay. In some situations, if the loan is not repaid to bank can take possession of the borrower’s personal assets. Even though the bank pays for the business, they do not take possession of the establishment. Figuratively, when Joe Smith pays off the loan, he doe not have any more ties with the bank, unless he asks for a subsequent loan. A precaution that must be taken when requesting a loan is the cost of bank loans. Interest rates are very high and must be paid regardless of if the specific business became successful. This is a huge risk that new business owners, who decide to take out a loans, have to take. Borrowers receive tax deductibles which makes it easy for businesses to make monthly loans payments and keep up with interest rates.
US Small Business Administration (SBA) loan is the most common loan program for small businesses. They offer the the “7(a)” loan which is the easiest loan to get. The loan does not actually come from the SBA, it comes from a lender and a portion of it is guaranteed. Because lenders can lower its standards, which means the small businesses who do not have good credit histories can qualify. Lenders observe to potential business earnings, collateral and resource management. According to the SBA to qualify a small business must have these characteristics. The must me in the Unites States, demonstrate a need for a loan, no prior U.S debt, meet the SBA definition of a small business and operate for profit. There is no minimum for the size of the loan but the maximum is five million dollars. M...

... middle of paper ...

...t. Using their connection could have amazing benefits. Unfortunately, the owner does lose some control. Because the VC are putting their money into a business, they want to be very involved. The size of the financing loan determines their level of involvement in a company.
Private placements in stocks are very customizable and flexible when it comes to raising money. These investors are more patient and less aggressive than venture capitalists because they wait a longer time before asking for their investments back. This route is also faster. The downside, is like many other financing options, it requires owners to give up some control. Private investors can also have access to all of the financial records. On the upside, it is less stress on the owner because of help from investors and the fact that there isn’t any repayments involved unlike a commercial loan.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay about The Role Of Bank Loans On The Cost Of Debt

- As the argument in previous part, the Chinese stock market is not efficient as a developing countries.It has different situation from developed countries, stock market reactions is only a short-term change and may not reflect the economic consequences of corporate fraud.In other word, previous researches only focus on the cost of equity rather than the cost of debt. In the Chinese capital market, there are various restrictions for firms on equity fianancing such as seasoned equity offerings and right offerings....   [tags: Debt, Interest, Loan, Corporate finance]

Better Essays
1320 words (3.8 pages)

Sample Resume : Loan Fee Adaptability Essay

- It is normally said that for by far most, the purchase of their home will be their single most vital utilization. Purchasing a home can be astoundingly invigorating besides altogether obnoxious. Various individuals need to endeavor to get the best course of action as on their home advance. The bank functions as a cash moneylender and the cash we get as an advance from a bank are known as a home loan. Bank loans cash and gathers with premium. On the off chance that anybody will need to not pay with premium, then the bank goes to lawful activity....   [tags: Loan, Debt, Interest, Mortgage loan]

Better Essays
801 words (2.3 pages)

Benefits Of Pay Day Loans Essay

- What Is The Real Purpose Of Pay Day Loans If you really require instant amount, you have a better guide named as pay day loans. Though you have alternative ways, you can compare and put analysis on benefits between different options to conclude to one solution. In this way, pay day loans are comparatively better in terms of time. If you apply for bank loan, you should wait for time more than you expect. Apart from time, you are also supposed to submit credits to receive loan. With pay day loans, you no need to submit any credits....   [tags: Loan, Debt, Payday loan]

Better Essays
844 words (2.4 pages)

Student Bank Loans? Essay

- Most of the students are always eager to go to the last stage of their educational program and attain the highest degree. This is also very important for their professional lives too. The students need to make sure that they have attained the good results or, good marks in their examinations. But, these are always like dream for the students having less financial abilities as the higher education needs you to have some money for managing the academic expenses. This becomes really impossible to carry out the personal expenses even if a student manages the academic expenses....   [tags: Finance]

Better Essays
583 words (1.7 pages)

Essay on Mortgage Loans : A Mortgage Loan

- A subprime loan is a mortgage loan type whereby borrowers with below par credit scores, limited funds for a down payment, and/limited income documentation are lent funds at adjustable, above-market interest rates so as to purchase a home that is valued at or above the fair market value. Notably, a housing boom resulted when real estate agents, mortgagers, appraisers, home builders, and politicians pushed the concept of home ownership to the nation and started approving large amount of subprime loans to reach a broader range of home buyers....   [tags: Mortgage, Subprime mortgage crisis]

Better Essays
1096 words (3.1 pages)

A Comprehensive Guide For Education Loan Essay

- A comprehensive guide to Education Loan. Many of us are used to the idea that our parents are going to pay for our education. However, this may be difficult in many cases if you are opting for super expensive professional studies. A model has emerged now under which students go to expensive colleges that lead to good recruitment, making it easy to pay for the educational loan when the student is finally employed. Education has been commoditized and studying from the top-notch B-school or law school adds to the professional skills in your portfolio and gets you a placement for a good desk job....   [tags: Debt, Interest, Loan, Money]

Better Essays
1670 words (4.8 pages)

The Cost Of A Student Loan Essay

- As Bob sat there looking at the cost to go to the college that he has wanted to go to, he realized that he would never be able to pay the staggering amount of money this will take to go to college. That is, without help from other people. Bob then started calling his friends and family, hoping that he could find someone who is able to help pay for college. Sadly, no one could spare any money to help him. Bob knew that the only way he was going to this college was to ask the bank for a student loan....   [tags: Debt, Money, Loan, Credit]

Better Essays
1381 words (3.9 pages)

Description of Texas FHA Refinance Loans Essay

- If you are looking to invest your property and enjoy the benefits year after year, refinancing with an FHA loan puts your investment to work for you. Letting you reduce the interest rate of your home, while making sure you don’t default on your mortgage payments. The Federal Government issues a loan insured by the Federal Housing Administration reducing the risk of loss. This program was instated due to a massive amount of foreclosures and defaults in the 1930’s. This new program had stimulated the housing market; making sure home loans were easily achieved....   [tags: fha loans, mortages, home owners]

Better Essays
736 words (2.1 pages)

Dealing With A Personal Loan Essay

- Personal Loan Defaulters Beware Certain eventualities and dispositions often hamper an individual from maintaining a regular and a healthy financial record but lets explore what happens when you default on a personal loan. Firstly, you are immediately termed as a “defaulter” and the implications on your credit profiling are huge. However, you don’t have to remain a defaulter all your life and hence we shed light below on various ways to rectify your situation. What leads to defaulting. Personal emergencies, loss of job, death, company going bankrupt, accidents and various unpredictable calamities can lead an individual to defaulting on a personal loan....   [tags: Debt, Credit, Loan, Default]

Better Essays
864 words (2.5 pages)

Loans Essay

- Borrowers flooded the Department of Education and lenders with phone calls as they rushed to beat the deadline to consolidate student loans before interest rates rise. The variable interest rate on federal student loans will rise nearly 2 percentage points after midnight Thursday. Some borrowers could save thousands of dollars over the lives of their loans by consolidating at the lower rate. The unusually sharp increase has prompted a wave of last-minute inquiries, causing back-ups for banks' 800 numbers and at the Department of Education's Direct Loan Servicing Center, where at least some calls weren't getting through Wednesday....   [tags: essays research papers]

Free Essays
405 words (1.2 pages)