Rescue Capital Blog Your Money, Your Way

21Jun/12Off

Bad credit not relevant with structured settlements

Posted by Dawn Anderson

When you’re suffering financially, waiting for payouts from a structured settlement annuity isn’t the most convenient way to get bad credit ok at Rescue Capitalmoney.  Clearly it would help if you can have access to your money sooner perhaps in a lump sum payment. Maybe you thought about looking into it before but delayed calling because you have bad credit and were afraid you wouldn’t be approved. The good news is that selling your future payments allows you to get the cash you need without borrowing money. It is not a loan it is a transfer of the legal rights to your future payments. So there is no money to pay back or credit approval.

The only way to improve your credit is to pay off your debt and selling your structured settlement could be the key to financial stability. Use the cash lump sum to pay off your credit cards or avoid foreclosure and invest the remaining funds to start earning interest for you. It is time to take control of your finances and reap the benefits of your money.

Working with Rescue Capital to sell your structured settlement for a lump sum has some benefits too. We can custom tailor the package to suit to your needs and goals. They can help you develop a plan to pay off your debts and work with your creditors to pay off the debts immediately. We’re also here to answer your questions without delay. Remember, the money is legally your property so why not use it to suit your needs.

You don’t have to sell you entire settlement. You can sell only part of your settlement, keeping some of your scheduled payments and have an influx of cash for your immediate needs. Cashing out your structured settlements can give you more financial freedom which is something everyone can use.

Don’t delay getting the facts about your financial situation. Call Rescue Capital today to discuss your situation and make your structured settlement to work for you. Call 866.688.3532 for your free no-obligation quote.



13Jun/12Off

Payday loans: Unfortunate trap or necessary evil

Posted by Dawn Anderson

Rescue Capital can save for having to rely on payday loansOnce again payday loans are a trending news topic. Just in the past five days, Pennsylvania and Delaware have introduced legislation to regulate the practice while payday loans from banks are now part of a FDIC probe. Two tribal nations in Oklahoma were cited in a FTC complaint and payday loan lead generation website MoneyMutual.com has also come into fire for its auctioning practices. While some groups and individuals feel that there is a need for these types of businesses, there is a need to protect consumers from themselves as well as predatory, deceptive or fraudulent lenders.

Pennsylvania

The PA house voted to approve an industry backed bill to regulate short-term lending. The bill, which hasn’t been approved by the PA State Senate, would require short-term lenders to obtain state licenses and limit borrowers to a 25% max of their gross monthly income or $1,000, whichever is less. Lenders could charge only 12.5% interest plus a $5 fee for each loan. For example, a $300 loan would cost $42.50 if it was repaid at the end of two weeks. However, consumer groups argue that the interest and fees would equal to 369% when calculated as an APR. PA currently has a maximum APR of 24% that can be charged by licensed lenders. [i]

One short-term lender stated that a 24% APR on a $100 loan is not economically feasible because only $.92 cents would be generated by the end of 2 weeks. If one person defaults, it requires 108 successful loans to recover the lost principal.[ii]

Delaware

State lawmakers in Delaware have taken a different approach. Under House Bill 289, borrowers would be limited to 5 payday loans in any 12 month period including loan rollovers and refinancing. In addition, they could only borrow $1,000 or less and the state would establish a database to track the number of loans a person has taken. The Bill was established in order to prevent the number of defaults within the state. Currently there are 70 licenses lenders with approximately 200 locations throughout the state. The bill is waiting for the signature of Gov. Jack Markell.[iii]

Detractors of both bills believe that these restrictions will force individuals to go out of state or online where there are fewer restrictions. Currently 13 states prohibit payday loans, while another 21 state prohibit rollovers. Only 13 states have statewide databases that track these short-term loans.[iv]

Bank Payday Loans

In response to a February petition signed by consumer rights advocates, the FDIC announced it will investigate payday loans from banks. According to the petition, several banks including Wells Fargo were called out for their lending practices. In addition, the petition cites Fiserv’s lending software, which promises to increase fee income, as a contributor to the problem.

Oklahoma

The Federal Trade Commission (FTC) complaint states that two American Indian tribes in Oklahoma are allegedly operation payday loan companies that add hidden fees, violate lending laws and threaten customers will false arrest for defaulting. In the complaint, the tribes are citing tribal immunity but the FTC states that tribal affiliation does not exempt them from federal law, in this case the Truth in Lending Act.  On a $300 loan borrowers were told they would pay $90 in interest. But the lender automatically renewed the loan at the end of two weeks resulting in fees of $975. The FTC stated that they have received 7,500 complaints about the defendants over the past 5 years.[v]

MoneyMutual.com

You may have seen their commercials on TV featuring former talk show host Montel Williams as their pitchman, but Money Mutual isn’t actually a lender. They are a lead generation website that auctions off prospects’ information to the highest bidder. Sometimes it is a legitimate lender but other times it could be a fraudster who has enough information to make unauthorized withdrawals from unsuspecting consumers’ accounts. While the company claims to take “extraordinary” steps to protect their information, others might disagree. The Director of the Consumer Financial Protection Bureau is reviewing how the sites treat data and the FTC has received numerous consumer complaints about the firm.[vi]

The parent company of Money Mutual doesn’t believe that government regulation of the industry is necessary because the industry is policing itself. Consumer advocates believe that it is a huge risk to consumers. In one case, information collected by an unnamed lead generation website was used by call centers in India to badger consumers into paying debts they didn’t owe.[vii]

Thoughts and considerations

Payday loans are a tricky business. Some individuals believe that people without access to traditional forms of credit have a legitimate need for these services. Consumer advocates believe these types of products prey on the poor and cause them to become deeper in debt. The industry believes it doesn’t need government regulation but at the same time current regulation has caused individuals to seek riskier internet based alternatives. So in those instances is the regulation really helping?

One of the biggest issues is the lack of authority over the tribal nations; the government needs to get that issue under control. But there needs to be a balance. Obviously states will have a hard time finding legitimate lenders if the interest rate caps are so low that the lenders won’t make money. Consumers need access to cash in a hurry but they also need to some sort of regulation that will prevent them from financial disaster. While it is difficult to regulate the Internet, there needs to be a way of protecting users from fraud and harassment.

If you look at other industries such as structured settlement factoring, government regulation has helped the consumer. While not logistically possible for payday loans, each structured settlement factoring transaction requires court approval to determine if the sale is in the best interest of the seller. Perhaps a nationwide database used by lenders to limit the number of transactions an individual could take in a 12-month period we could prevent some issues. A cap in the loan amount could also help. There also needs to be uniform laws nationwide regarding this type of lending that applies to online as well as offline lenders.

Sources:

[i] http://www.cbsnews.com/8301-505245_162-57448930/pa-house-approves-payday-lending-bill/

[ii] http://www.cbsnews.com/8301-505245_162-57448930/pa-house-approves-payday-lending-bill/

[iii] http://www.newsworks.org/index.php?option=com_flexicontent&view=items&id=39697:delaware-payday-loan-bill-heads-to-governors-desk

[iv] http://www.newsworks.org/index.php?option=com_flexicontent&view=items&id=39697:delaware-payday-loan-bill-heads-to-governors-desk

[v] http://www.loansafe.org/two-oklahoma-tribes-payday-loan-operations-cited-in-ftc-complaint

[vi] http://www.businessweek.com/news/2012-06-08/data-from-payday-loan-applicants-sold-in-online-auctions#p2

[vii] http://www.businessweek.com/news/2012-06-08/data-from-payday-loan-applicants-sold-in-online-auctions#p2

 



2May/12Off

Test your knowledge

Posted by Dawn Anderson

Think you know a lot about structured settlements, annuities and future payments. Take our quiz and find out.

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24Apr/12Off

5 Major sources of business capital financing

Posted by Dawn Anderson

Sufficient supply of funds is the key to the success of your business. There are two broad categories of capital requirements for your business - fixed capital requirement and working capital requirement. Under fixed capital expenses, there are machinery, plant and other fixed costs that you have to incur. On the other hand, working capital expenses include those expenses which you have to incur on a day to day basis. Anyways, all businesses are required to finance these two types of expenses. There can be long term as well as medium and short term sources of capital financing. Here we discuss about some sources of capital financing.

Share capital or equity capital
Share capital or the equity capital is the capital stock of a business generated from trading the stocks of the company in the share market. Unlike the debt capital, equity capital is not repaid to the investors. Equity capital is generated by the company by purchasing the ordinary shares or the common stocks of the company. The value of equity capital is determined by subtracting the current market value of everything owned by the company from the liabilities of the company. The equity capital is shown as the stockholders' equity or owners' equity in the balance sheet of the company.

Debt capital
Another important source of capital financing is debt capital. This particular type of capital is infused by the other parties under the condition that the money will be paid back within a predetermined future date, along with interest. In case of debt capital, bondholders, banks or wealthy individuals come to an agreement to borrow money to you in exchange of interest rate. You as the owner of the business can use the money to expand your business. Debt capital is considered as an excellent way to get funds as it is very easy to obtain this kind of capital. The profit of the owner is obtained by subtracting the cost of borrowing from the rate of return on the capital.

Mortgage loan (Home equity loan)
Another way to obtain capital is through taking out a home mortgage loan. Mortgage loans are secured loans and these loans are taken out against some real properties. The rate of interest associated with secured mortgage loans is comparatively less than the rate of interest associated with unsecured loans. You can use the mortgage loan proceeds for business expansion purposes.

Retained profit
You as the owner of the business can use retained profits to expand your business. Retained profits are nothing but the part of the net income earned by you after paying dividends to the investors. You can reinvest a part of the retained earning for developing your business.

Venture capital
Venture capital is for the early stage businesses which have high growth potential. If you have innovative business ideas with a lot of opportunities, then you can seek for venture capital. The venture capitalists are now playing vital role in modern growth-oriented business.

Apart from these, there are many other sources of business capital financing. As the owner of a business unit, you can opt for one or more sources of business capital.

About Guest Blogger
Kavin Matthews
- Kavin is a prolific business writer, with expertise in personal debt issues. To know more on personal debt related aspects, visit https://twitter.com/debtcc