SBA: Disaster loans target more than just businesses

Adrianne Laneave and Mary Gipson have jobs that require them to be in areas east of the Mississippi River struck by natural disasters within 48 hours of those disasters occurring. A packed suitcase and a plane ticket can quickly replace the usual daily routine for the two.

Laneave lives in Connecitcut, Gipson in Georgia. But home for the US Small Business Administration representatives in the last couple of weeks has been Mississippi, the site of a series of tornadoes April 28 that killed more than a dozen people and destroyed scores of homes and businesses. They say theyre here to offer something many Mississippians still need more than two weeks after the storms moved through – help.

That help is in the form of SBA disaster loans available to homeowners, business owners and nonprofits that suffered property damage in 12 counties: Itawamba, Jones, Leake, Lee, Lowndes, Madison, Montgomery, Rankin, Simpson, Warren, Wayne and Winston. Additionally, economic-injury loans are available in 33 other counties, including Hinds County, for small businesses, small agriculture co-ops and nonprofits that have been financially disrupted by the storms.

SBA says more than $500,000 in loans have been approved in Mississippi so far, and that number likely will grow significantly in coming weeks. And while there are many people still without shelter and other essentials, Gipson says her travels through Mississippi since April 28 show the states hardest-hit communities are gradually transitioning from trauma to resolve.

The debris has been moved to the side of roads to be picked up. The Red Cross is on the ground. MEMA is on the ground, she said.

Interest rates on SBA disaster and economic-injury loans range from about 2.2 percent for home loans to 4 percent for business loans. Amounts vary, depending on the type of loans sought, but are as much as $2 million for business disaster loans.

For loans involving losses greater than $25,000, collateral is required. If an applicant cant meet that requirement, that doesnt mean theyll be denied, but the applicant will have to pledge whatever physical or financial assets they have, Laneave said. Loans can be repaid over 30 years, and ability to pay is the overarching guideline in whether SBA approves a loan.

Applicants credit histories are taken into consideration, but Laneave says theres no magic number in terms of credit score that determines if someone will be approved or not.

SBA representatives are staffing eight disaster recovery centers statewide to assist people in applying. Locally, those centers can be found at the Rankin County extension office, 601 Marquette Road, Brandon, and the Madison County Road Department, 3137 Liberty St., Canton.

Disaster-loan applications are due by June 30. Economic-injury loan applications must be filed by January 30. Forms are available electronically at https://disasterloan.sba.gov/ela.

Smaller lenders corner small business loans; Officeworks pens plans for …

Small business may get a fairer go with a loan from a smaller lender.

The owner of Radio Rentals and the Thorn Group, John Hughes, yesterday told The Australian the big banks preferred to write loans above $500,000, which allowed finance groups to corner the lower end of the market with loans up to $50,000.

“It’s an area where the banks just find it too small to really spend their time, effort and energy,” said Hughes.

Thorn Group’s financing arm, Thorn Equipment Finance, announced yesterday it had expanded its lease book 37% to $63.6 million.

Officeworks pens plans for smaller stores

Officeworks is preparing to rollout a small-store format to get a piece of the $30 billion office products pie in CBD and inner-city areas.

The company is one of Australia’s first big-box retailers, but has spent more than a year testing the small-format model and refining the product range.

The new stores will be between 400 and 600 square metres, less than half the size of an average 1400 square metre big-box store.

Shares down on open

The local sharemarket is down again this morning, following a drop in US markets overnight.

The Samp;P/ASX200 benchmark was down 29.6 points to 5390.8 points AEST. On Tuesday, the Dow Jones closed 137.55 points lower, down 0.83% to 16374.3 points.

Banks more cautious about approving retail loans

Retail loan approval rates fell sharply to 50% in the first quarter due to more prudent management by banks as overall non-performing loans (NPLs) ticked up to 2.3%.

Anupap Kuvinichkul, the Bank of Thailands senior director for financial institutions strategy, said the rate represented a decline from 70% in the previous quarter.

It should continue falling further but is unlikely to reach as low as 20-30%. However, business loan approvals remained steady at 70%, he said.

Banks bad loans rose to 2.3% of total credit from 2.2% at the end of last year due to higher debt defaults by retail and small and medium-sized enterprises (SMEs) in line with the economic slowdown, Mr Anupap said.

An uptick in NPLs came from overdue loans from the previous quarter, but new overdue loans are not expected to be high.

Outstanding NPLs in the first quarter reached 280 billion baht. Net NPLs stood at 1.1%, up by 0.1% from the previous quarter.

The most concerning sector for NPLs would be the SMEs, as they are more vulnerable to economic conditions and the political situation than other groups, given that they have smaller capital, said Mr Anupap.

Households also shouldered the effect of rising NPLs but have been cautious in spending due to political concerns, while commercial banks have tightened their loan approvals over the past six quarters.

Consumer NPLs increased in all sectors in the first quarter, especially credit card lending, swelling to 3.3% from 2.6%.

Mr Anupap said the NPL outlook in the second quarter depended on whether the economic slowdown and political situation continued.

Meanwhile, overdue business and consumer loans declined in the first quarter as they became NPLs.

Banks also extended debtors repayment periods or allowed them to pay interest only for a certain period.

Bank loans increased by 9.8% year-on-year and 11% on a quarterly basis in the first quarter.

The economic slowdown will deteriorate banks loan quality, but to what extent depends on several factors such as forthcoming economic conditions, commercial bank management and adaptability of businesses, Mr Anupap said.

Business loans declined by 9.4% in the first quarter, an improvement from a 10.2% drop in the previous quarter, due to a slowdown in loan extension to property and commercial sectors.

SME loans decreased by 11.7%, improved from 14.7% in the final quarter of 2013, while consumer loans dropped by 10.7%, down from 12.9%. Automobile loans experienced the biggest decline, growing by only 2.5% compared with the fourth quarters 8.4%, after the impact from the excise tax rebate for first-time car buyers wore off.

Commercial banks increased their loan-loss reserves to 170% in preparation for economic uncertainty.

UAE consumers need to invest in financial literacy

Part of the problem is that there is a pervasive culture of spending in the UAE and there is no emphasis on educating the consumers so that they are able to understand complex financial products and make sound financial decisions. Financial institutions, especially banks, are not transparent enough in their offerings and customers don’t do due diligence and invest in their own literacy needs.

CBMS not limited to products or services of the financial services industry

A recent Patent Trial and Appeal Board (PTAB) decision provides further guidance regarding the scope of covered business method (CBM) patents under the AIA. AIA sect; 18(d) defines covered business method patents as patents claiming a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patens for technological inventions. As illustrated by the PTABs recent determination that a patent for smart-phone advertising was subject to CBM review, this definition extends beyond the world of banks and financial services.

InGoogle Inc. v. Unwired Planet, LLC, CBM2014-00006, Paper 11 (April 8, 2014), the PTAB confirmed that CBM reviews are not limited to products or services of the financial services industry. Looking to the AIAs legislative history, the PTAB found the proper inquiry is whether the patent claims activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity.

Claim 25 of US Patent No. 7,203,752 recites a method of controlling access to location information for wireless communication devices that is requested by a client application. Based on the patents disclosure, the Petitioner argued that such client applications could be used in business applications incidental or complementary to financial products or services, such as banks or other financial service companies. In response, the Patent Owner argued that such a broad definition of covered business methods would improperly capture patents only remotely related to financial uses.

Rather than considering thetypesof businesses using the client application, the PTAB focused onhowthat application could be used. The 752 patent explained that a business could use the claimed client application to learn when a wireless device is in its area so that relevant advertising may be transmitted to the wireless device. Advertising, the PTAB found, is complementary or incidental to the financial activity of a service or product sales, making claim 25 of the 752 patent a covered business method. As this analysis illustrates, patents unrelated to the financial services industry, but still financial in nature, may qualify for CBM review.

Ranger Specialty Income Fund Expands Into Small Business Loans By Teaming …

Summary

The Ranger Specialty Income Fund will begin investing in crowdfunded small business loans through a relationship with crowdsourcing platform – Funding Circle USA. The Ranger Specialty Income Fund seeks to provide both domestic and international investors with attractive yields and monthly cash flow attributable to investments in the peer to peer and crowdlending space. The Ranger Specialty Income Fund was formed to invest in all types of peer to peer and crowdlending loans; and the relationship with Funding Circle USA assists the fund in executing its strategy with respect to small business loans.

The inexorable logic of financial literacy

The future of humanity is irrevocably tied to empowered individuals capable of discharging their obligations and responsibilities. Literacy was a key enabler in our collective civilizational advance. In a similar vein, the evolving context is placing big financial burdens on individuals, demanding an enhanced level of financial ability.

Should we continue to trudge in a cloak of fatalism where financial well-being is tethered to the benevolent designs of vigilant legislation or do we let the markets make provision for this good? Concerns about poor financial decision-making and weak consumer protection have elicited feverish regulatory and legislative responses. The overriding intent is to empower consumers about personal financial management and the role of economic literacy as an antidote to limited individual financial capabilities.

The global financial crisis, rapidly changing economic climate, bewildering array of financial products, increased life expectancy and greater focus on personal investment management have brought a heightened attention to financial capabilities and fitness. The complexity of the financial terrain calls for a more effective response than is provided by a simple combination of a parent-like government and service providers, often companies that also sell investment products.

The market forces will only help consumers overcome their fallibilities while the incentives to such interventions align with their interests. There is some evidence suggesting that markets help individuals surmount the affliction of limited financial capabilities. But a financial services company with a product to sell seldom helps nave consumers in all the ways they need. Opaque and complicated fee structures are pandemic in the market and their very existence is a testament to all too common customer frailty and fallibility.

Though far from conclusive, academic studies shed some light on the positive correlation of financial literacy with planning for retirement, savings and wealth accumulation. Financial literacy has also been found to lead to greater financial inclusion, participation in capital markets, better diversification and choosing a low-fee investment portfolio.

On the other hand, low financial literacy is associated with insidious outcomes such as debt accumulation, high-cost borrowing and poor mortgage choices among others. While a cautious response should make us guard against an unabashed acceptance of the redemptive powers of financial literacy, waiting interminably for big government and big companies to solve this problem will not work.

Globally there are nearly 2.3 billion working-age adults who are financially excluded, and financial inclusion can help break the vicious circle where people incur inordinate costs on account of lack of access to mainstream financial products and knowledge. Financial development matters for the distribution of incomes and poverty. With increasing sophistication of financial markets, the enhanced capacity to embrace investment opportunities may help reduce inequality.

Economic literacy has been found to mediate the empirical association between financial development and reduced inequality, suggesting that financial development in the absence of economic competences may do little to reduce inequality.

However, in the final analysis, financial efficacy and competences are driven by the judicious mix of content, delivery, knowledge retention and instigation to transform intent into action. Teachable moments just prior to making key financial decisions are especially pertinent. Joe Saari, who co-founded Precision Information LLC, a leading provider of interactive financial education products, echoes this sentiment about context when he says that the best place to administer wealth education is where people make money, namely the workplace.

Dollar volume of North Bay SBA loans dips, but number of loans up

The dollar volume of North Bay small business loans backed by US Small Business Administration decreased 6.7 percent comparing the first half of the administrations fiscal year to the same period in the prior year, while the number of loans ticked upward, according to data from the SBA.

Lenders approved $47 million in both 7(a) and 504 loans the two most popular SBA programs across Sonoma, Marin, Napa, Solano, Mendocino and Lake counties in the six-month period ended March 31. There were 86 loans completed during the period, up from 83 loans in the first half of the prior fiscal year.

Sonoma County saw the greatest share of that activity in both dollar volume and number of loans, with $28.2 million in lending across 46 borrowers. That compares to $17.9 million in loans and 48 borrowers during the same period in the prior fiscal year a 57.5 percent increase in dollar volume.

Lenders funded $11.9 million loans across 18 borrowers in Solano County, with 18 borrowers and $6.9 million in loans in Marin County. Two Mendocino County loans accounted for $455,000 in borrowing, and a single Lake County loan totaled $270,000. There were no SBA loans in Napa for the period, according to the SBA.

Accounting for the greatest share of 7(a) lending activity in both dollar volume and loans in the broader North Bay for the period was Wells Fargo, with 19 loans totaling $6.76 million. The San Francisco-based banking giant is an active participant in the government-backed loan programs provided under the SBA, and also ranked highest among lenders across California, according to SBA data.

Santa Rosa-based First Community Bank lent the greatest volume of dollars in the region among North Bay-based institutions through the 7(a) program, with $4.45 million across five loans. The institution currently ranks 24th in dollar volume among the 200 active SBA lenders in California for the six-month period, according to the SBA.

Exchange Bank, another active SBA lender based in the city, also completed five 7(a) loans in the North Bay at a value of $1.15 million. Santa Rosas Redwood Credit Union completed two of those loans in the region totaling $825,000.

Oakland-based Bay Area Development Company was the most active on the 504 side. Its share of eight loans across the North Bay totaled $7.9 million.

The various loan programs under the SBA provide a government-backed guarantee that helps mitigate risk for financial institutions lending to small business. Terms of those loans are typically better than the borrower could obtain otherwise, providing fixed-rate financing for business operations and expansion.

The 7(a) program the SBAs most popular is available for a variety of business needs. The 504 program, which combines a loan from a so-called certified development company with one from a traditional lender, is generally tailored for real estate and equipment.

The San Francisco district for the SBA, which includes all nine Bay Area counties plus Santa Cruz, recorded 618 loans totaling $318.3 million for the period. Lenders provided $1.8 billion in financing across the state of California over the six months, with 3,370 loans.

MetLife Inc (NYSE:MET) | MetLife and MetLife Foundation Launch Mother’s Day …

[Business Wire] Ahead of Mother’s Day, MetLife is inviting social media users to say thank you to their moms through a poem, or #Moem, posted on Facebook or Twitter. A #Moem is defined
Read more on this.

MetLife, Inc. (MET), valued at $57.61B, started trading this morning at $50.08.

Looking at todays trading action, the companys one day range from $50.07 to $51.25 with the price of the stock fluctuating between $40.35 to $54.80 over the last 52 weeks.

MET shares are currently priced at 8.82x this years forecasted earnings, which makes them relatively inexpensive compared to the industrys 16.82x earnings multiple.

And for income investors, the company pays shareholders $1.40 per share annually in dividends, yielding 2.80%.

According to a consensus of 20 analysts, the earnings estimate of $1.42 per share would be $0.02 worse than the year-ago quarter and a $0.00 sequential decrease. The full-year EPS estimate is $5.66, which would be a $0.03 better than last year.

The quarterly earnings estimate is based on a consensus revenue forecast of the current quarter of $17.62 Billion. If realized, that would be a 3.40% increase over the year-ago quarter.

More recently, UBS downgraded MET from Buy to Neutral (Jan 6, 2014). Previously, Deutsche Bank Initiated MET at to Hold.

With the above information in mind, readers should note that the average price target is $60.24, which is 20.29% above where the stock opened this morning.

Summary (NYSE:MET) : MetLife, Inc., through its subsidiaries, provides insurance, annuities, and employee benefit programs in the United States, Japan, Latin America, Asia, Europe, and the Middle East. It operates in six segments: Retail; Group, Voluntary amp; Worksite Benefits; Corporate Benefit Funding; Latin America; Asia; and Europe, the Middle East and Africa. The company provides variable, universal, term, and whole life products; individual disability income products; personal lines property and casualty insurance, including private passenger automobile, homeowners, and personal excess liability insurance; and variable and fixed annuities for asset accumulation and distribution needs, as well as mutual funds and other securities products. It also offers group insurance products, such as variable, universal, and term life products; dental, group short- and long-term disability, and accidental death and dismemberment coverages; and voluntary and worksite products consisting of personal lines property and casualty insurance, as well as LTC, prepaid legal plans, and critical illness products. In addition, the company provides annuity and investment products comprising guaranteed interest products and other stable value products, income annuities, and separate account contracts for the investment management of defined benefit and defined contribution plan assets; and structured settlements and products to fund postretirement benefits and company-, bank- or trust-owned life insurance, as well as health insurance, group medical, credit insurance, endowment, retirement, and savings products. It serves individuals and corporations, as well as other institutions and their employees. The company sells its products through sales forces, third-party organizations, independent agents, and property and casualty specialists, as well as through career agency, bancassurance, direct marketing, brokerage, and e-commerce channels. MetLife, Inc. was founded in 1863 and is based in New York, New York.

Tag Helper ~ Stock Code: MET | Common Company name: MetLife | Full Company name: MetLife Inc (NYSE:MET) .