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Technology has been fueling the innovation of the financial industry for quite some time now. First alternative lenders like OnDeck, CAN Capital and Kabbage entered the scene with new underwriting systems that made it easier than ever for small businesses owners to receive access to working capital. Now Apple and Wal-Mart have stepped into the playing field with mobile payment processors, how will these impact consumers? In October, Apple launched Apple Pay. Marketed as an easier way to pay in stores, or as “your wallet, without the wallet” Apple Pay aims to make your phone your primary method of payment in stores, and online. Essentially, they have created a contactless payment technology so that you can use any of your apple devices to pay for goods, securely. What’s more, is that Apple made partnerships with the big banks to keep Apple Pay transactions at a low price for merchants, even lower than it costs them to process credit cards. In essence, Apple hopes to take over the whole payment processor world by giving people a more secure way to pay for their products or services, limiting the potential for data breaches from hackers. For smaller, community banks, this could be a...

We live in a world where your financial history is very important. If you want to buy a car, rent or own a home, get a credit card, or start a business your credit score will play a huge part in determining if any of this is possible. Credit and FICO scores can be really confusing and hard to understand. We are here to help you better understand what a FICO score is, what a credit score is, what determines if you have good or bad credit and the difference between a free credit score and your FICO score. Often time’s people don’t realize how the FICO credit scoring process works and how it changed during the recession; having a broader understanding of these basic credit tools can help you improve your finances! What is a FICO Score?First off, FICO is a company that specializes in predictive analysis, meaning they take your financial history information and analyze it to predict your financial future. More specifically they take your credit information and uses it to create a score that help lenders predict your financial behavior (whether or not you are a perceived risk). The credit score is calculated using information from one...

Mortgage rates reached their lowest point in 2014 last week, dipping below 4 percent to 3.97 percent (on average for a 30-year fixed mortgage). The dip in rates was a direct result of the commotion that seized financial markets and caused stock prices and bond yields to drastically fall. These fluctuating rates made the opportunity for refinancing seem too good to be true, and according to Josh Boak and Alex Veiga of the Associated Press, “Ultra-low rates do carry risks as well as opportunities. Charges and fees can shortchange refinancers who are focused only on the potential savings. And falling rates are often associated with the broader risk of an economic slowdown that could eventually reduce the income that some people have to pay their mortgages.” Because the rates dipped so low, and due to the current mortgage market, many homeowners took this as a sign that it was time to refinance, before interest rates go up again. The swift fall of interest rates came as a surprise as many assumed rates would begin to increase (to around 6 percent) due to the Federal Reserve raising its key short-term rate next year, which would result in overall higher mortgage rates. The rates dropped to their lowest...

What is Asset-Based Lending? Asset-based lending implies a secured lending arrangement whereby the assets securing the loan are the primary source of repayment as opposed to cash flow or earnings from the business.   In conventional bank underwriting, earnings from operations are assessed to determine debt service capacity and a lender may or may not take collateral to secure the loan as a secondary source of repayment.  In an asset-based structure, the loan is self-liquidating and the conversion of the underlying assets to cash comprises the lender’s primary underwriting focus.  The most common example of this occurs from the collection of accounts receivable and sale of inventory whereby the proceeds are used to relieve or repay the loan. At Celtic Bank we describe an asset based loan as: revolving working capital financing for businesses involved in the extension of credit and management of inventory. These types of loans can be used as working capital, to refinance revolving debt, and for purchase order financing (depending on location and loan amount). Asset based lending usually becomes the most viable option for getting financing for companies that have exhausted all their other fund raising options, or for businesses in dire need of immediate capital. In...