Thursday, November 5, 2009

The Global Economy - 2010 and Beyond

The caption for the 1984 science fiction film 2010, directed by Peter Hyams was “The Year We Make Contact” – perhaps in 2010 we will make contact with our lost economy.

As 2009 draws to its close, the status of the global economy, is ranked at about a ‘3′ on a scale of 1-10. With no realistic cures in sight, this ‘3′ may easily be a ‘1′ by the end of 2010.

Globally speaking neither the politicians nor the economists have come close to resolving the problem and in fact have failed in their every endeavor. Nothing they have tried has worked. Nothing they have implemented has borne any effects and they are fast running out of ideas.

The latest (but not greatest) idea is to devalue the US dollar. Actually, speaking as an entrepreneur and visionary, this isn’t such a bad idea at all.

But the solution to the crisis we believe, rests in the minds of businessmen who stand on the front line battling survival day after melancholy day. Put the money in the hands of businessmen not bankers, and things will improve. Allow businesses to invest in themselves and growth will and must result.

One of the problems is that finding the money has taken precedent over repairing the problem. No longer the world’s economic powerhouse, America’s economic future looks bleak. Every market surge is followed by an immediate selloff indicate a lack of faith and confidence on Wall Street. And Europe and the Far East no longer look to America for inspiration or ideas. Each country must fend for itself and not join together, as has been repeatedly suggested by the G-8 (now G20) team of incompetents. It is somewhat insane to believe that a change in the German or French government’s economic policies would direct affect the lives of citizens on Main Street USA and vice versa.

So what does 2010 hold? Do we make contact, with ourselves, with our economies, and with our daily lives? The answer is a resounding YES.

First we have to start believing in ourselves and our neighbors and rid ourselves of the clouds of paranoia and mistrust which are preventing all kinds of forward movement.

When it comes to business loans, a business loan broker is today’s best source for locating money. The successful broker has learned to adapt and survive in these difficult economic times, by developing a network of funding sources for its clients seeking loans.

The Web Lender, of Tel Aviv, Israel is one such successful business loan broker that boasts a network of over 400+ funding sources located on 4 different continents. They are informed, experienced, and respected.

Visit any or all of The Web Lender’s seven websites and gain a wealth of knowledge about business loans in today’s global economy.

Monday, September 14, 2009

More Reason To Use A Loan Broker

The credit crunch in Europe worsened over the summer as corporate bond finance issuance failed to plug the gap left by a sharp contraction of bank lending.

Net lending by banks went further into negative territory in July as companies paid back more loans than they took out new ones.

Loans outstanding contracted by a net €25bn ($36bn) in the month, the fifth successive month of an increasing shrinkage of supply.

At the same time, there was a retreat in the recent record corporate bond issuance.

Bond issuance in July declined for the first time since March, by €20bn month on month to €27bn, although bankers are convinced that it was only seasonal.

The scant availability of bank lending would penalise smaller companies that have no access to bond markets. As Europe’s commercial banks de-lever, lending is likely to be squeezed. There was €319bn of corporate bond issuance in the first seven months of the year and a decline of €33bn in European bank-originated loans. That marked a reversal of the balance of corporate funding from the same time last year, when bank loans totalled €356bn compared with corporate bond issuance of only €119bn.

Banks across Europe have insisted in recent months any decline in lending is due to a fall-off in demand, not supply.

Saturday, August 29, 2009

The Increased Value of a Business Loan Broker

As three more U.S. banks failed on Friday, bringing the total to 84 so far this year, the industry continues to grapple with deteriorating loans on their books and the importance of a good business loan broker for companies seeking a business loan, is both essential and valuable.


Regulators shuttered Affinity Bank of Ventura, California, Bradford Bank in Baltimore, and Mainstreet Bank of Forest Lake, Minnesota, which in total are expected to cost the government’s deposit insurance fund about $446 million.


The Federal Deposit Insurance Corp on Thursday reported that the insurance fund’s balance stood at $10.4 billion at the end of the second quarter. But the agency also noted that the figure was adjusted to account for $32 billion set aside for expected failures over the next year.


FDIC Chairman Sheila Bair said this week that bank failures will remain elevated as banks go through the painful process of recognizing loan losses and cleaning up balance sheets.


The total of 84 failures this year marks a sharp rise over the 25 last year, and the three failures in all of 2007.


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Sunday, August 16, 2009

Is Bank Lending to Business Failing?

In a word – yes.

It is not responsible of the banks to lend to poor and failing businesses and startups.

Banks are being governed to rebuild their reserves and balance sheets and start lending more money. However, this is almost impossible during a recession when the number of failed business is up 50% year on year.

The real problem is for medium businesses. Growing pressure on banks in which the government hold a large stake cannot free-up credit for small businesses, and slightly larger businesses – likely to be more stable – are struggling to access cash and refinance at competitive rates.

Where can businesses, small, medium, and large find cash?

The Web Lender is a global financial brokerage providing the solution with fast and easy financing.

The Web Lender brokers creative financing solutions through its global network of lending institutions located on every continent. Clients receive more liquidity, flexibility and faster funding results compared to traditional funding sources like banks.

Whether the need is for cash flow improvement, working capital, equipment financing, bridge loans, purchase order financing, commercial real estate financing or accounts receivable funding, The Web Lender has a solution for you.

Monday, July 13, 2009

European Leaders Pay The Price

Europeans have grown more critical of their governments’ handling of the financial crisis in spite of recent signs pointing to economic recovery.


The findings of a recent poll show the price that European politicians are paying for the deep recessions in many countries. Europeans believe their leaders are responding more poorly to the crisis than do poll respondents in the US, where support for the government’s action has risen under president Barack Obama.


About half of respondents believe interest rate cuts and government spending will stoke inflation in the near future. Concerned by the crisis as the holiday season starts, almost half of respondents in some countries said they would cancel or cut short their holidays or spend less.


However, support for central banks’ actions has risen. About one in five people thinks central banks – the Bank of England, the Federal Reserve and the European Central bank – have responded appropriately to the economic downturn. This is a larger proportion than last August, before the collapse of Lehman Brothers aggravated the financial crisis and prompted aggressive rate-cutting by central banks.


Carried out in five European countries and the US between June 24 and 29, the poll shows no expectation of a quick end to the economic downturn. Most respondents expect the crisis to last at least another year – similar to the situation at the end of 2008.


The revelation of growing discontent at government performance is particularly stark in France, where respondents had previously been the most generous about their government. Only 8% of French respondents think President Nicolas Sarkozy’s government has handled the crisis well, compared with 23% in November.


Some 16% of US respondents rate the Obama government’s performance as good, compared with last November when just 4% thought George W. Bush’s administration was handling the crisis well and two-thirds thought it was poor.


Germans remain the least critical of their government but support for its performance has been eroded ahead of the general election in September.


Only in Italy have impressions of the government’s response to the crisis remained stable.


Poll respondents in Britain have remained more supportive of their central bank than respondents in other countries. Some 28% of those in the UK think the Bank of England – which last week held its main interest rate at a record low of 0.5% – has responded appropriately, compared with 23% last August.


Economic gloom is hitting holiday plans in the US and Europe alike, with almost two in five Americans and almost half of French and Spanish respondents curtailing, cancelling or spending less on holidays.


Only Germans remain relatively determined to enjoy their break, with almost half saying the crisis would have no impact on their plans.


Friday, June 19, 2009

Why Do We Need Economic Growth?

With recession looming and unemployment rising, politicians and economists are trying to find ways of stimulating economic growth. But is growth a good thing? Does it have harmful consequences? Could we live without it?


First of all, what do we mean by economic growth?


It is the annual rate of increase in gross domestic product. This is the country’s production of goods and services, valued at market prices (or at cost when the goods are not sold). The figures are then corrected for inflation by using the prices that existed in some chosen base year.


So, Do We Need Economic Growth?


Yes, if we are to meet people’s aspirations. It also makes it easier to relieve poverty, but growth has a downside too. From one year to the next, the crucial factor affecting growth is spending. If people spend more, firms will sell more and this will encourage them to produce more. Whether the spending is by individuals, business, the government or people abroad on our exports, higher demand will lead to higher output.


The big danger at the moment is lack of spending. With bank loans down, and people becoming cautious about spending, we have the recipe for recession. But the answer to getting long-term growth is not simply one of increasing spending. If we spend beyond the capacity of the economy to produce, we’ll simply end up with inflation and boom will be followed by bust.


If growth is to be sustained over the years the key is a growth in investment and productivity. This is partly down to scientists and engineers in developing new efficient techniques and new products, but partly down to getting incentives right to encourage investment.


Politicians see growth as very important. Elections are won or lost on the state of the economy. But do governments need to do more than just keep production going and avoid recession? Do we really need output to go on growing year after year after year?


Well, in one sense we do. If living standards are to be maintained and population is growing, then output at least needs to grow as fast as population.


Then there is the question of poverty. If poverty is to be relieved and the rich are not to be made poorer, then growth is necessary. Of course, making the poor richer is not easy and there are many political obstacles in the way. But at least growth makes it easier.


Imagine trying to alleviate poverty without growth. Income would have to be redistributed from rich to poor. But this doesn’t go down well with the rich.

Then there is the question of human wants. People want more. Ask anyone if they would like to be richer and very few people would say no. Why do people do the lottery? And what politician doesn’t want to give the people what they want.


There is the question of debt. Some people are so keen to consume that they just borrow more and more – and this has been fuelled by banks offering easy credit.

Economic growth may lead to the depletion of resources – a problem that’s likely to get worse as world population and world consumption grows.


Then there are things included in GDP, which are really ‘bads’ rather than ‘goods’. For example, if you live near your work and walk or cycle, then this will probably benefit your health. Now assume that you take a job a long way from where you live and have to buy a car, or a second one. The commuting costs – the car, the petrol, the insurance – will all be counted in GDP. But the commuting is likely to decrease your well-being, not increase it.


Growth may be necessary, but it certainly isn’t sufficient.


Certainly for poor people, to be able to consume more food, have better clothing and shelter, and access to education and healthcare would be an improvement in their living standards. Economic growth that allows these things to occur would be good.


But whilst economic growth may be a necessary condition for the relief of poverty and can be desirable for middle- and high-income people too, it is not enough on its own. Governments and society need to be judged on so much more than simply whether their economies are growing.


Tuesday, May 5, 2009

Why The Banks Aren't Lending

The British government has unveiled a plan to guarantee up to £20 billion of bank loans to small businesses. In return for a fee, the state will, in effect, insure banks against firms defaulting on loan repayments. It is the latest initiative to get banks lending again and help small business survive the economic downturn.


So Why Isn't This Working ?


One reason that even healthy banks are not making new loans is that they can buy sound corporate credits at substantial discounts to par. While they earn a high return doing that why would a bank go to all the trouble and expense of making a new loan at a lower rate?


Banks are still writing off bad debts and other assets that have fallen sharply in value during the credit crunch. Existing small-business loans are defaulting at an alarming rate. More than 4.4% of small-business loans were in 30-day default, up from 3.48% a year ago. And 1.29% were delinquent 90 days, up from 1.04% a year earlier, while 0.63% were 180 days delinquent, double the rate a year ago, according to PayNet, a small-business payment network.


In a recession there is a greater chance that people will default on their mortgages / loans. Businesses are more likely to go under. Therefore banks want to be much more cautious about lending in case they lose their loan.


In the boom years, banks became highly leveraged. Basically this meant they lent a high % of their deposits. These business strategies are now seen to be too risky so banks are trying to encourage a greater % of deposits.


Banks are reluctant to lend to each other. There is a shortage of credit. Therefore, although credit is cheaper, it just isn’t there.


There Is A Solution


In these trying economic times The Web Lender acknowledges that being approved for a business loan from a commercial bank is difficult.


Traditionally, conventional banks make business loans commercial loans, and loans on their terms.


The Web Lender offers this contrarian business acumen.


You name the terms for your business loan. 





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