Managing finance: Loans | Clevernotes.ie

Syllabus Topics: Managing (2)

Topic 1: Household and Business Finance ? Loans

Key Personalities: Lender, Borrower

Key Concepts: Loan decisions, credit-worthiness, interest rates, repayments

There was a time not too long ago when getting your hands on money was easy, especially if you were in full employment or running your own business.?I was 26, I?d just bought my house, and less than eight months later got a letter from my bank asking me did I want to take out a loan of ?15,000. A few forms later (I didn?t even have to go into the bank) and I was as happy as a pig in muck. I think I ended up spending most of it on a car, which turned out to be clocked but that?s a whole other blog.

All that?s changed.

?

Banks (as far as I know) no longer approach their customers to take out loans, and the criteria for loan decisions have become much more strict.

Businesses are citing huge difficulties in obtaining finance. The Small Firms Association and the Irish Small and Medium Enterprises Association (ISME), the representative bodies for small firms in Ireland, are constantly calling for banks to lend more. The Credit Review Office was set up in 2010 to review unsuccessful small business and farm loan applications of up to ?500,000. The government has demanded that AIB and Bank of Ireland lend up to ?3.5 billion a year to small businesses.

?

Yes, today?s lenders are far more stringent in their approach, and are poring over certain questions before doling out the dosh:

• What?s the financial position of the borrower? What is their income? What are their?outgoings?
• What does/could the future hold? Is the business or employment of the applicant secure?
• What has the savings history of the applicant been like? Yes, banks are now looking more closely at savings than they have in the past.
• Is this person credit-worthy? When the recession hit, did the individual default on their loans, or have they done so in the past?
• What is the reason for the loan? Loans that will help a firm create business or employment will have a better chance of being granted.

?

In the shiny, bright days of the mid-2000s, when money was free?flowing, individuals and businesses thought nothing of taking out a loan. One of the positives to come from the recession is that many are giving greater consideration before even asking for money:

• What size of loan is needed to meet my needs?
• Can I pay back the loan? Make sure you have a good relationship with your bank and present figures to the lender to back up your current financial position.
• What are my future prospects? Circumstances change. Sometimes people lose their job or business slackens. The borrower must consider if they will be able to make the repayments if circumstances change.
• Should I shop around? Irish people are notoriously loyal to their brands and businesses. Now they?re looking for the most competitive interest rates.

?

Jan 27th, 2013 9 views

Source: https://www.clevernotes.ie/business/hlol/leaving-cert/lc-business-unit-4-managing-2-finance-loans-2/

white sox chuck colson ufc 145 results orrin hatch marlon byrd charles colson humber