This is intentional.  Commercial lenders and CMBS investors want to make sure that low interest rates, low caps rates, and high leverage never again push commercial real estate valuations to sky-high levels.

So what is an acceptable Debt Yield Ratio?  For several years after the Great Recession, 10% was the lowest Debt Yield Ratio that most conduit lenders were using to determine the maximum size of their advances.  That number has crept down to 9% today and occasionally lower.

In our example above, the subject commercial property generated a NOI of $437,000.  Four-hundred thirty-seven dollars divided by 0.10 (10% expressed as a decimal) would suggest a maximum loan amount of $4,370,000.

Whether, one is looking, to purchase a new home, and/ or, feels it is in his best – interests, to refinance, for whatever reason (for example, other financial need, seeking better rates, etc), it’s important to carefully choose/ select, the best mortgage banker, for you! Since, each of us, is different, and, the combination of one’s personal knowledge and experience/ expertise, as well as our emotional composure/ make – up, it is, often, a significant consideration, ensuring, choosing, the right person, for you, to professionally, assist you, in your financing/ mortgage needs! With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 6 specific priorities, one should consider, in making their choice/ selection.

Photo by Tim Mossholder from Pexels

1. Listens effectively: Like, in many consumer positions, etc, it is wise, to choose, someone, who listens, effectively, rather than dominating the conversation! How can anyone, make the best recommendations, in terms of, mortgage – terms (lengths, down – payments, using – points, etc), unless/ he, fully considers, individual needs, in a customized way, rather than, merely, proceeding, on a one – size – fits – all, basis?

2. Custom service: Each of us, has individual needs, knowledge, etc, so, choose a mortgage banker, who customizes his approach, to best serve your needs, priorities, and best – interests, instead of, merely, the same – old, same – old, manner! Since, for most people, their house, represents their single – biggest, financial asset, doesn’t it make sense, to carefully, consider, all relevant aspects, and details?

3. Explains thoroughly, what is needed: Beware of the difference, between, being, pre – qualified, and pre – approved, for a loan! The more detail, and documentation, up – front, generally, eases the rest of the transaction period. Seek, someone, who, openly, thoroughly, explains, what will be needed, an overall strategy, and the best path, forward!

4. Explains thoroughly, what to expect: Few things, become more stressful, than being confronted with surprises, and the need, to produce, on a timely basis, additional documentation, etc. When, your chosen professional, thoroughly, explains, what to expect, and has you, as prepared as possible, it significantly, eases the process!

5. Hand – holding: Many find the entire, real estate transaction period, stressful, it demonstrates, how important, your choice of your agent, and mortgage banker, is! It is best, to choose, someone, and/ or, a team, which is there, for you, every – step, along the way, and holds – your – hand, and comforts you, throughout!

6. Expedites/ stays on – the – ball: It’s not enough, for someone, to be, simply, a glorified, order – taker! Seek someone, who, proactively, expedites, and eases the process, is consistently, prepared (no surprises), and stays, on – the – ball!

Ease the home – purchasing, and/ or, financing process, by hiring the finest, mortgage professional, for you, and your specific needs, and priorities! The wiser, you proceed, the easier, this will be!

We are currently, witnessing, a period, of time, with the longest, extended period, of historically, low, interest rates, in recent memory! While, there are many reasons, for this, it may be, beneficial, to better understand, the fundamentals, and relationships/ ramifications/ impacts, of this sort of prolonged, extended period. However, it’s also important, to recognize, since, we have never witnessed this, before, our concepts are based on theories, concepts, and apparent, common sense. Will interest rates, remain, this low, and become, the New – Normal, or, will, we, once again, see cycles, over – time? With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 4 questions, and whether, it will, in the longer – run, create undesirable ramifications.

1. Historic lows – How low, will rates go?: In the last year, or two, many have believed, we experienced, the lowest rates, only, to discover, they went, even – lower! Although, these are historic lows, how low, will they go? We observe mortgage interest rates, which have never been lower, in recent memory, and the impacts. In housing, it means, a buyer, can purchase, more house, for – his – bucks, because, it creates low monthly payments, etc. It also means, individuals, can qualify for bigger loans, because, their monthly expenditures, are a lower percentage of one’s overall income, etc. When, banks pay, such low – interest, and bonds, such, low dividends, it contributes, strongly, to the rising stock market, for a number of reasons, including, it being, the only game, in – town! However, banks and lenders, also, reap large profits, because, they still charge high rates, on credit cards, and, other, unsecured – consumer loans! It helps car dealers, because, especially, lease rates, but, also car loans, becomes more attractive!

2. Historically, rates fluctuate?: Will they do so, this time?: A review of historic trends, indicates, rates fluctuate, over – time. Since, they seem to have usually done – so, will this occur again, and, if – so, when? Since, the United States budget deficit is also, at a record – high, will that prolong, or reduce, this current period?

3. Relationship between rates and stocks: Because, when rates are low, using bank vehicles, or bonds, bills, etc, become less attractive, largely, because, they may not, even, keep – up, with the inflation rate, especially, in the long – term! Therefore, the stock market, usually benefits, because, many borrow cheap – money, and invest it, in stocks, and, it also, becomes, the only game, in – town!

4. If this continues, what will Federal Reserve use, as new/ future incentives. stimulus: Historically, the Federal Reserve, used lower rates, to stimulate investing, and/ or, spending. If this becomes the New – Normal, what will be the weapons, available, etc?

Will this become the New – Normal, or, just, a temporary, cyclical occurrence? The smartest strategy is to understand impacts, and be prepared!

Richard has owned businesses, been a COO, CEO, Director of Development, consultant, professionally run events, consulted to thousands, assisted with financial planning, and conducted personal development seminars, for 4 decades. Rich has written three books and thousands of articles. Website: http://plan2lead.net and LIKE the Facebook page for planning: http://facebook.com/Plan2lead

The public is, often, bombarded with, a variety of economic terms, which, often, instead of helping the untrained, better understand, merely confuses them. How often have we heard, terms, such as, recession, depression, inflation, stagnation, etc, but, many, have only a limited understanding, of what that means? As, a former, licensed, representative, and principal, for a financial services company, I have learned, and developed, an understanding, and appreciation, for what these mean, and their potential impacts. Often, I try to make others, feel more comfortable, by joking, that the difference, between, a recession and a depression, is, it’s the former, when it happens, to you, but, the latter, when I am affected! With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, these four concepts/ principles, and what they mean, and represent.

Photo by Tim Mossholder from Pexels

1. Recession: A recession is, generally, defined, as a period, of temporary economic/ financial decline, when, trade, industrial activities, and other economic indicators, are identified, in, at least, two consecutive quarters. It is usually reviewed, in terms of, the Gross Domestic Product, or, GDP, which measures, overall economic performance, in a specific nation. Often, the Federal Reserve Bank, uses several tools/ methods, to attempt to enhance activity, including reducing interest rates, etc.

2. Depression: When, the recession, becomes, even more severe, and endures, for a significantly, extended period of time, it is often, considered, a depression. We might witness, either, a specific component of the economy, which is depressed, such as housing, or industry – specific, or, an overall one. Nearly, everyone, is familiar, with the period, which began in 1929, and extended, for several years, which is referred to, as, the Great Depression.

3. Inflation: Inflation is the rate at which, a specific (or several) currency, falls, and, results, in an overall, rise in most prices of products, and services. The usual pattern, of the Federal Reserve Bank, is, to increase the costs, of borrowing money, also referred to, as interest rates. In most cases, when these increase, significantly, many individuals discover, their wages, do not keep up, with the inflation rate!

4. Stagnation: When we refer to, stagnation, in economic/ financial terms, it refers to a significant period of little, or lack of activity, growth, and/ or, meaningful development! When, this occurs, for a prolonged period of time, it generally, creates a loss of employment possibilities, and, often, more unemployment. Historically, governments use a variety of economic stimuli, to strengthen, overall economic activity, and hopefully, restore us, to a stronger, better, financial condition.

When it comes to money – matters, the more, one knows, the better – off, we might be, in being prepared, for eventualities. Learn as much as you can, for you own best interests.

Richard has owned businesses, been a COO, CEO, Director of Development, consultant, professionally run events, consulted to thousands, and conducted personal development seminars, for 4 decades. Rich has written three books and thousands of articles. His company, PLAN2LEAD, LLC has an informative website http://plan2lead.net and Plan2lead can also be followed on Facebook http://facebook.com/Plan2lead

Monetarism is actually a set of views depending on the perception that the entire sum of money in an economy is actually the main determinant of economic development.

Monetarism is directly linked with economist Milton Friedman, who argued, dependent on the amount concept of cash, that the federal government must maintain the money supply relatively constant, expanding it slightly every year largely to allow for the organic progress of the economy.

Monetarism is actually an economic idea that says that the source of cash in an economy is actually the main driver of economic development. As the accessibility of cash in societies increases, aggregate need for goods as well as services goes up. A growth in aggregate demand really encourages job development that brings down the speed of unemployment and influences economic development. Nevertheless, in the long-range, the growing need will ultimately be bigger compared to supply, creating a disequilibrium in the marketplaces. The shortage the result of a higher need than supply is going to force costs to go up, leading to inflation.

Monetary policy, an economic device used in monetarism, is actually applied to change interest rates to manage the money supply. When interest rates are improved, individuals have much more of an incentive to conserve than to invest, therefore, contracting or reducing the money supply. On the flip side, when interest rates are actually lowered observing an expansionary monetary system, the expense of borrowing decreases that means folks are able to borrow even more and invest more, therefore, revitalizing the economy.

Because of the inflationary consequences which could be brought about by too much expansion of the cash source, Milton Friedman, whose job formulated the concept of monetarism, asserted that monetary policy must be performed by focusing on the growth rate of the cash source to keep economic and price stability. In the book, A Monetary History of the United States 1867 – 1960, Friedman proposed a fixed growth rate known as Friedman’s k percent rule, which recommended that money supply must develop at a continuous yearly speed tied to the nominal GDP growth as well as conveyed as a fixed percent per year. By doing this, cash supply are going to be likely to get moderately, companies will have the ability to count on the changes to the cash supply each year and also strategy accordingly, the economy will develop at a constant speed, and inflation is going to be maintained at levels that are low.

Central to monetarism is actually the Quantity Theory of money, that says that the cash supply multiplied by the speed at what some money is actually spent per year equals the nominal expenditures in the economy.

Monetarist theorists observe velocity as frequent, implying that the some money supply is actually the main element of Economic growth or GDP growth. Economic development is actually a characteristic of economic activity as well as inflation. If velocity is actually predictable and constant, subsequently an increase (or perhaps decrease) in money will result in an increase (or perhaps decrease) in possibly the price or quantity of goods and services sold. An increase in cost levels denotes that the quantity of goods and services sold created will continue to be constant, while a growth in the amount of goods produced implies that the typical price level is going to be fairly constant. Based on monetarism, variants in the some money supply will affect cost levels over the economic and long-term output in the short term. A shift in the cash supply, consequently, will immediately determine employment, production, and prices.

The perspective that velocity is actually regular serves like a bone of contention to Keynesians, who think that velocity shouldn’t be regular since the economy is actually subject and volatile to regular instability. Keynesian economics states that aggregate need is actually the answer to economic development and also supports some activity of central banks to inject more cash into the economy to boost interest. As reported previously, this runs contrary to monetarist idea and that asserts that such actions can lead to inflation.

Proponents of monetarism think that managing an economy through fiscal policy is actually a bad decision. Increased government intervention interferes with the functions of a completely free market economy as well as may lead to big deficits, improved sovereign debt, and also greater interest rates, that would ultimately force the economy into a state of destabilization.

Monetarism had the heyday of it in the first 1980s when economists, investors and governments eagerly jumped at each brand new money supply statistic. In the many years that followed, nonetheless, monetarism fell out of favor with economists, as well as the link between various methods of inflation and money supply proved to be much less distinct than almost all monetarist theories had recommended. Many central banks now have stopped establishing monetary targets, rather have adopted stringent inflation targets.

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Bids, Tenders and Proposals

Submitting bids and tenders is a great way to grow and expand your business and is a great way for a small company to become a much larger company. It can be frustrating and costly to bid, this work taking you away from other business activities. However, winning a bid gives you access to a new customer and other project opportunities. You also have to consider as to whether you have the financial standing and moral fortitude to undertake large projects so choose your opportunities with great care. Smaller projects can help your company grow efficiently and profitably with less drama and anguish. Here are a few pointers to remember when producing tenders.

1. Work in partnership on larger tenders, spreading the risk, costs and work required with a similar company, but also the profit.
2. Make sure that what you bid on you can actually provide at the price that you bid on.
3. Be on time with your submission – if you miss the cut off date and time you will not be evaluated.
4. Ask and review the questions if you are unsure. Questions asked are a great way to understand what other bidders are struggling with as well.
5. Similarly attend the briefings.
6. Read the RFP and PQQ numerous times, particularly the guidance notes, the must haves and the evaluation criteria. This gives you a wealth of knowledge about what is required and what will score you good points.
7. Keep to the word count and guidance on what to produce. If it says no attachments for example they will not evaluate these so keep this information in the main body of the tender. This includes CVs/Resumes.
8. Research: Look at sample tenders on the internet and try and find out who your target company deal with currently.
9. Understand your target company and what kind of objectives and visions you have. Prove in your tender that you understand the company.
10. Understand who you may be competing against and try and find your USP that will put you above them.
11. Do not use jargon without explaining it first.
12. Do not lie on your proposal in order to win – it will come back to haunt you if they find out or you win a bid you cannot produce.
13. Many companies are risk adverse so ensure they understand how you are mitigating risk.
14. Mention your company name at least once in each question- just to remind the weary evaluator who you are. Be positive about what you CAN provide. No modesty allowed in proposals.
15. Make your target company excited about working with your company whilst also giving them confidence that you can provide a winning solution.
16. Do not mention competitor names or make any reference to them, but make sure that you appear better than them in your proposal.
17. Use consistent branding and great presentation throughout your proposal, particularly if it is written by more than one person.
18. Ensure all the attachments have your company name, copyrights and bidding reference on them and obviously if you refer to an attachment, make sure they are actually submitted.
19. Ensure that your costing model is accurate and makes you a profit. Winning because you have a low priced bid is no good if you are tied to a non profit making proposal for the next few years.
20. Lastly quality check to ensure you have answered all the questions correctly, spelt and grammar checked and have not missed out any requirements.
21. Always ask for feedback on your proposal, even if you lose.
22. If you are asked to a presentation, do not assume you have won, they often ask several. Prepare to give the best presentation of your solution that you can.
23. Keep bidding, it’s a numbers game, the more you tender the more chance you have of winning, particularly as you get better and quicker and bidding.

© Copyright 2020 Biz Guru Ltd

Lee Lister writes as The Biz Guru, for a number of web sites where she provides assistance for the business entrepreneur. She is known as the Bid Manager and is a recognized bid management expert.

If you would like assistance in writing your tender or PQQ, visit: http://www.TenderWriting.com or read Proposal Writing For Smaller Businesses which can be found on Amazon.

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Having a money sense is critical to becoming successful in life. When an entrepreneur chooses to get to the next level, it is imperative that he takes into cognisance such things that can mar his progress in business. Among the things that can make or mar a business is taking loans. People take loans to meet up with their expectations. However, it takes a wiser entrepreneur to decipher when to or when not to take a loan. Loans can do wonderful things for you when properly managed. It can help solve urgent problems, cater for substantial expenses and grow businesses. Though loans can work perfectly for those who have steady income, yet it has the propensity of entangling those who struggle to earn a living. It is very important for every entrepreneur to note that a mismanaged loan is hell. Credit quickly becomes a source of frustration and can cause real damage to someone’s future financial prospects.

This present generation is a credit bound generation. It is a loan-cultured generation! Countries borrow to finance projects, creating huge damages to their economy, while individuals, companies, organisations, etc delve into the same act of borrowing or taking a loan to make ends meet. Apart from emergency expenses, moving costs, appliance purchases, vehicle finances, wedding expenses, home remodelling, etc, people take loans to consolidate debt. Whatever be the reason to borrow, loan helps as well as entangles.

One of the dangers associated with taking a loan is its strangling nature. You are bound to get chocked if you don’t have your main capital which should exceed the loan. A loan is worth taking only to increase your capital base or to make much more money than the original loan.

Loans can be obtained based on certain terms of agreement between the lender and the borrower, and can come in two forms: secured and unsecured loans. Secured loans require collateral, which could be in a form of property, held back or seized if the borrower defaults payment. Unsecured loans don’t require anything as collateral but typically require a higher credit score. If a borrower fails to pay back an unsecured loan, there is the risk of being sued or having a lawsuit filed against the borrower by the lender or bank.

Money is good, very hard to make but so easy to spend. Our lifestyles most a times help to bring us to a tighter corner. We live so extravagant that our daily/monthly incomes cannot just be enough. Having an attitude problem is one thing, and devising a way to solving it is another. Some of us are ready to make a few tweaks in our lifestyle, stop a few money habits that are toxic to our growth, and take certain steps that will help us break from this cycle.

Growing up, I never knew what is called prudence. I lived so extravagant that it became a problem for me to save for the rainy day. My pocket money was the first to finish and in no time I will start looking for where to borrow. My fellow students were my first point of call. One day, I was deeply insulted by one of them when I approached him for a loan. I gave it a deep thought and decided to change.

Believe me, I was so liberal at school that I could give out my under-wears just to help other students. Little did I know that I was being foolish. Some of them would hide their things and come to share mine. I did not see it coming. I thought I was doing service to humanity. My eyes opened to reality the day I decided to become stingy, so to say. It could be that you have been plunged into perpetual debt, such that you even borrow to pay debt, no matter the interest. Many businesses have collapsed as a result of the owners eating up their capital. The moment they see money, they start spending, especially on irrelevant things. As a business man/woman, does what you spend your money on yield back profit to your business?

You go into a spending spree the moment money enters into your hand. Ask yourself few questions. Some of us have the belief that witches from the villages are the cause of our troubles. Let me tell you, the money in your hand belongs to you. It is only spent on anything by your own approval. If witches are there, you have power over them to control them. Just do the following:

• • Track your spending – If you do not track the way you spend money, you are likely to underestimate how much you spend in certain areas or even to forget some expenses entirely. It is very important to keep your receipts and messages or connect your bank accounts and credit cards to an app that works out the expenses for you.
  • Limit your exposure to debt – Realize that ‘too much credit’ can be very harmful. Taking on multiple loans at a time increase the risk of missing a payment and then getting stuck in nasty cycles of debt – constantly taking additional loans to pay off previous loans which you are already struggling to service is an abrasion. It is very important that you only apply for loans when you need it. A loan is a serious obligation and should be treated as such. Assess your needs prior to applying for a loan, and always try to ask yourself if it is worth it to take loan at this time.
  • Start with the end in mind – Only take loans when you are certain you will have the means to repay on or before the agreed due date(s). Be sure to confirm all interest/fees associated with the loan prior to applying. Only proceed when you are comfortable that you will be able to service the expected repayments. Try as much as possible to avoid late repayments. Late repayments or defaults on loans are not only a breach of the contractual agreement between a borrower and a lender; they also come with very real consequences that can be hard to shake off in the long-term.
  • Minimize your cost of living – When your cost of living is too high, it likely that what you term activities of witches and wizards are the result of high expenses you incur on daily bases. It is advisable to cut your coat according to your size. In other words, try as much as possible to review how much you spend on your fixed expenses and look for areas where you can downsize.
  • Invest wisely – Not investing your money in profitable business can bring about redundancy. Investing helps you make money from money and keeps you financially secure. You basically let your money work for you.
  • Avoid impulse buying – It is natural to say that only animals act on impulse. The animal nature of man can lead him into anything but wisdom. It is in the nature of so many people to get attracted to a nice pair of jeans at the store while buying some household items and so cannot resist buying them simply because they have money in their wallet. Impulse buying can be extremely bad and needs to be curbed if you want to stay away from debt.
  • Avoid comparing yourself to others – Constant comparison between you and your colleagues or friends is never a good idea as you are bound to come across differences that make you see the need to catch up with them. That is not necessary. Focus on yourself, building your savings, and retirement fund.

It important to see patience in the line of what it is – a virtue. Being able to wait for something without being antsy or frustrated is a great skill to have. Break the cycle of living in debt. I did, and I overcame. You too, can!