Dean Williams By:


Among the many solutions available to you if you are facing foreclosure is a short sale. Individuals and companies that promise fast foreclosure help often fail to inform you on the damage a short sale will have on your credit report. A foreclosure will remain on your credit score for 10 years and you’ll typically have to wait 2-4 years before you can apply for any loan that offers a reasonable rate. The truth is there is no credit score advantage to a short sale over a foreclosure. Both of these options will lower your credit score between 200 to 300 points. That means if you had a FICO score of 700, it may drop to 400 depending on the overall condition of your credit. A short sale will have the identical effect on your credit report as a foreclosure. The short sale will show up as a pre-foreclosure redemption status, costing you between 200 and 300 points on your FICO score. A Deed-In-Lieu of Foreclosure will affect your credit just as badly as a foreclosure.

A homeowner might consider letting their home go into foreclosure because it enables them to stay in the property, basically rent free, from four months to a year before being forced to vacate. But that fact does not mean a foreclosure is the better option because a short sale has the same effect on your credit. Another issue with short sale or foreclosure is that discharged debts are considered income according to the IRS. So if you have a $250,000 mortgage on your home it is foreclosed on or discharged by bankruptcy, the IRS treats that as if you received income of $250,000. Likewise, in a short sale the difference between the mortgage and what the lender agreed to sell it for will be considered forgiven debt, and you will be taxed on that amount. You can often negotiate that down to a lower level, but it is a tough process.

Contrary to popular opinion, short sales do not have shorter wait periods when compared to foreclosures before an individual can buy another home. Fannie Mae guidelines state that individuals need at least 24 months “seasoning” before they can be considered for home loans. Additionally, a seller could fall victim to a deficiency judgment where they will be held liable for the difference between the mortgage amount and the short sale price. It is up to the lender as to whether or not they will pursue a deficiency judgment.

If you wish to save your credit, and possibly keep your home, you should explore other foreclosure solutions. For instance, if there is enough equity in the home, a real estate investor may be willing to bring your payments current if you agree to sign over the deed and rent the home from them. You will lose ownership, but you’ll continue living in the home and once your hardship passes you may be able to repurchase the home from the investor or a new home. The key to this is finding a reputable real estate investor through a local real estate investment club. Should a homeowner find a real estate investor, and the circumstances are right, he or she may be able to stay in their home and salvage their credit altogether.

Foreclosures are not a pleasant experience and you probably want to end this misery as soon as possible. The best way to do this is not to stick your head in the sand! Start taking action and save your home.

Healthcare decision makers face continual challenges when it comes to allocating scant recourses. Patients demand the best that medical equipment technology has to offer. But the equipment is expensive. Capital budgets typically fall way short of requests for medical technology. It is therefore critical that all aspects of the equipment purchases and financing be carefully considered before a decision is made.

Equipment to purchase:

Deciding what type of equipment to acquire can be a daunting task in and of itself. Let’s say you are considering the purchase of a CT scanner. The current and most widely-used model costs around $1 million new. You’ve also been approached by a supplier that sells refurnished equipment. His company will sell you a refurbished 16-slice machine for $400,000. You’ve also discovered that a new scanner is being rolled out in six months. Although this machine will be able to detect cancer and other diseases it its early stages, the cost is $1.5 million. What do you do? Will you be able to charge more per scan with the newest technology so that revenues match expenditures? Will you be able to “get by” with the 16-slice for a period of time? These are questions that are at the root of the decision.

Once the decision has been made as to the type of medical equipment to be acquired, the next challenge is to decide what will be the optimal way of financing it. There are many options available, but the most common are borrowing the funds from a lender or leasing the equipment.

Medical Equipment Leasing:

Leases usually run from three to six years and have lower monthly payments than buying the equipment outright and financing it through a lender. That’s because the lessee is paying for the use of the equipment during the term rather than owning it. In addition, leasing offers 100% financing, as there is no down payment required other than the first payment and a security deposit equal to a payment. Since the payments are lower, providers are able to improve their cash flow and are more likely to match revenues with expenses. From a tax standpoint, leasing also offers the advantage of writing off 100% of the lease payments.

Many medical professionals also opt for leasing because of its flexibility. A lease can be negotiated in such a way as to include maintenance, upgrades, and other services. At the end of the lease term, the provider has the option to purchase, renew, or simply return the equipment. This is an important advantage, as it guards against equipment obsolescence. At the inception of the lease, you should consider negotiating a fair market value cap or placing an early buyout option in the contract. These details are rarely in a standard lease, so you must ask the lessor for these items.

Since the payments are lower, providers are able to improve their cash flow and are more likely to match revenues with expenses. From a tax standpoint, leasing also offers the advantage of writing off 100% of the lease payments.

Medical Equipment Loans:

When equipment obsolescence or cash flow isn’t an issue (which is rare in the medical industry), an equipment loan might be a better alternative. At the end of the lease term, the provider has an asset that he can either continue using or dispose of it on the open market. Borrowers also receive tax benefits, such as the depreciation expense on the equipment and the interest expense incurred during the loan payout.

Using a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization) is a common method of valuing healthcare practices and hospitals. If a healthcare group is considering going public or selling the business, financing equipment through a lender may be advantageous because it would result in a higher valuation than if they had leased the equipment. Leasing would be an “above the line” expense.

Personal Guarantees:

With both medical equipment leases and loans, personal guarantees from the owners are usually required. This provides a comfort level for the lessor or lender. If there is a default, the lender/lessor can attach personal assets of the lessee for the balance of the loan or lease that isn’t satisfied by the liquidation of equipment. Most providers do not want to sign a personal guarantee for obvious reasons. However, if the clinic or practice has a solid track record of profits for five years or more, the lender/lessor will oftentimes abandon the personal guarantee requirement. That is another point that must be negotiated at the inception of the lease.

Choosing a lender or lessee:

Competition is fierce in the equipment financing industry. Acquiring the services of an independent financing consultant is advisable. A properly trained medical equipment financing broker will analyze your particular needs and will know which lender or lessee will be a good fit for your organization. He or she can guide you through the intricate details concerning the contract, which will allow you achieve optimal capital financing.

To learn more about medical financing click here

Owning a healthcare business or practice can be very profitable and very challenging at the same time. Having to wait up to 90 days to get paid by insurance companies, HMOs and Medicare/Medicaid can wreak havoc on your company’s cash flow. This problem can easily be compounded if you have regular periodic expenses, such as rent and payroll, which must be met.

Going to the bank may be of some help, especially if you are a doctor, are willing to personally guarantee a loan and own a medical office. If you run any other type of healthcare business that bills insurance or Medicare you may be out of luck. Banks almost always require significant collateral and three years of audited financials. To make things more complicated, most bank financing has maximum limits. Much like a credit card maximum, once you reach it, that is the end of the line.

But what if your business is growing?

Medical factoring allows you to finance your business by using your slow paying insurance claims as collateral. In effect it reduces the time it takes you to get paid from up to 90 days down to a few days.

You can use the financing to pay rent, meet payroll and pay suppliers. You can also use it to grow your business.

As opposed to other financing tools, factoring has no arbitrary maximum limits. Your maximum amount of financing is solely determined by how much you invoice.  (See diagram to learn more)

The more you invoice, the more you can finance. Factoring enables you to grow your business and eliminates having to wait to get paid by insurance companies and by Medicare/Medicaid.

Medical factoring is easy to qualify for. It works equally well for new and for established healthcare companies. If you cannot afford to wait up to 90 days to get paid by your insurance carriers, you must consider factoring as a solution.

Martyn Witt By:


There is an estimated 5.2 million commercial properties within the UK. The commercial property market expanded by over 32 per cent during 1990-2000 (according to the new products started) compared with the previous decade, in itself a decade of exceptional growth. Bank lending for commercial property deals rose by a record £7.7 billion in the first quarter of 2005, according to data provided by the Bank of England, and property experts believe the bulk of the new lending was for investment purchases.

There has also been a substantial rise in the number of investors looking to buy commercial properties to put into Self Invested Personal Pension Schemes. Property investment funds received a boost as of late last year after the Government announced plans to allow them to be included in an ISA (Individual Savings Account) wrapper.

Savers will now be able to add investments, such as property funds and funds of funds, that have previously been restricted from being included in ISA’s because the asset class did not feature on a European standard of eligible investments and commercial property funds are seemingly the greatest beneficiary of the rule change.

With this diversified interest in commercial property by investor, speculator and businesses alike the role of the broker has become a more integral part of the process. Increasing numbers of mortgage brokers have branched out into non regulated markets such as the commercial loan sector since Mortgage Day in late 2004 and subsequent involvement by the Financial Services Authority, interestingly 58 per cent of mortgage brokers claim profits are down since Mortgage Day.

Commercial lending is now not the preserve of the high street banks who, in the past, have not only seemed to cherry pick but have also had a tendency to only lend to their existing business customers. The result was that there are now over 1,200 commercial lenders currently operating within the UK.

The competitive market for commercial lending has also been confirmed by the rates available. There are also many other flexible options such as rolled up interest (No interest payments) for the first year to help with cash flow, start up finance, business expansion finance or even for finance on low yield investment properties.

Lenders will typically lend up to 80 per cent loan to value but 100% is achievable with additional security. Three years audited accounts are also now not the normal requirement as self certification of income has also found its way into commercial lending. Adverse credit clients are now considered and in the majority of cases loans approved. However self certification and bad credit applicants can expect a loading on the rate of typically between 1 to 4 per cent.

A cross section of business funding is available to retail businesses such as convenience stores, fast food outlets, specialist shops and supermarkets. Investment properties, professional practices such as accountants, doctors, vets and solicitors. Property development including speculative or pre-let for both commercial and residential. Offices and factories along with the health care sector including nursing homes, residential care and special needs homes. The leisure market has also been seen as the main stay for commercial lending over many years embracing hotels, guest houses, cafes, restaurants, wine bars and pubs.

Although latterly pubs have often sought brewery loans as a traditional way of borrowing money in the trade often referred to as Advance of Discount (AOD) or “Write Off” loans, the interest rates seem favourable at significant discounts over the banks but barrelage discount is affected and the repayment terms are often shorter over 10 years.

Lending on leasehold is also available up to 65 per cent on the security property (often the applicants main residence). With many businesses failing in the first year and business failure rates up 13 per cent in the first quarter of 2006 applicants must carefully consider whether they should be securing their main residence against the lease.

To calculate monthly charges use one of our many custom built calculators. Commercial loan applications, for both single and joint applicants, are processed on our own dedicated secure server.