Celtic Bank Blog

DEC
17

Complete SBA Loan Guide

Complete SBA Loan Guide
Small business lending has never looked so good, which is great both for small business owners and our local economy. In fact, by the end of the 2014 Fiscal year (Sept 30) the Small Business Associations 7(a) Loan Program has approved over fifty-two thousand loans for nearly 20 billion dollars (that is a 12 percent increase from the 2013 fiscal year). What does this mean? Now is most certainly the time to look into your borrowing options, as in previous years SBA lending saw decreases. Small Business loans can be a treacherous territory to navigate, so we have prepared a brief guide to help you understand what an SBA loan is, the benefits and your best options for getting one! What is an SBA Loan ? First, the SBA does not lend money. A lot of people think the SBA provides grants to small business owners, but that is not true. The SBA is a government guarantee program that issues guarantees to decrease the risk to the bank when lending to small businesses. Available SBA Loans   There are several lending options open to businesses, each suited for different needs. The 7(a) loan program is great for small businesses looking...
DEC
02

Mortgage Rates Likely to Increase

Mortgage Rates Likely to Increase
If you took out a mortgage ten years ago, you were most likely certain that it was the best time, and the best rate because the housing bubble was at its Peak. Well it is almost 2015 now, and those loans taken out in 2005 are about to burst.   Monthly payments will reset, all higher and in some cases they may even double- especially if you have an adjustable rate or interest-only period.  The problem here is that hundreds of thousands of people with sub-prime credit took out prime, jumbo loans, ones in which they would not have been able to afford via a fixed rate-loan, loans that Fannie Mae and Freddie Mac would have never have approved. Today, more subprime loans have reset than the total number of affected prime jumbo loans, but the payments will hugely increase above what they did for subprime loans.  Interest rates may remain low these next few years, however principal payments will start to be due and borrowers whose loans were set to reset after ten years now have only 20 years left to repay what they borrowed – meaning the monthly principle payment will be higher now than it would have...
NOV
14

The Impact of Mobile Payment Technology on Small Business

The Impact of Mobile Payment Technology on Small Business
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...
NOV
05

Navigating Credit and FICO Scores

Navigating Credit and FICO Scores
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...
OCT
30

Fluctuating Mortgage Rates Result in a Refinancing Craze

Fluctuating Mortgage Rates Result in a Refinancing Craze
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...
OCT
24

Asset-Based Lending Guide

Asset-Based Lending Guide
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....
OCT
08

Student Loans Outlook is Improving

Student Loans Outlook is Improving
According to a September 24, 2014 Bloomberg Business week Article , the outlook for student loans, which has previously been quite bleak in the United States, looks much better for the future. According to the article, fewer individuals are not able to pay their student loans back year after year, and the student loan default rate decreased from 14.7 percent to 13.7 percent from 2013 to 2014 alone. Although the forecast for student loans seems to be getting better, there are still a large amount of young adults defaulting on their loan payments, meaning there is a larger problem with the state of Student Lending in general that needs to be addressed. Education debt has the potential to affect the whole country, not just the student who are defaulting on their loans, and not just the schools they attend. Those students to face harmful credit scores and those schools do face decreased federal funding the more students default (most of the schools facing losing funding are for profit schools with a high percentage of students defaulting on student loans). Student loans are a rocky terrain, and there is a lot of information out there that the American Public doesn't know...
SEP
30

Banks and Big Data

Banks and Big Data
Your financial institution has access to your name, phone numbers, home and work addresses, social security number, credit card data, account information and whatever other personal information you use as your security checks. This information has turned banks, credit unions and alternative lenders into technological companies that are driven by data with the ability to analyze millions and billions of data points. In a market where companies would do anything for this type of data, what are your financial institutions using it for? Fraud Detection: because we have the ability to use our financial information anywhere at any moment, fraud has become more prevalent. To combat the fraudulent use of credit card and identity information, financial institutions are using your data to detect falsified transactions among all of your legitimate account activity. Has your bank or credit card company ever called you in order to approve a transaction? It was most likely because this transaction was unusual to your spending history based on the data your financial institution analyzes about you. Risk Management: your data isn’t only being used to keep you safe; your financial institutions are also using your data to protect themselves. Banks can use your data to...
SEP
24

Why Women Business Owners Are Having Trouble Finding SBA Loans

Why Women Business Owners Are Having Trouble Finding SBA Loans
Although there has been a steady increase in the amount of businesses owned by Women Entrepreneurs this past year, Small Business Loan approval rates for Women Owned Businesses has not increased , and in fact is seemingly getting worse. The approval rate for women Small Business Loans is between 15 and 20 percent below that of their male counterparts. One reason for this trend might be that these Women Owned businesses are newer, and have less revenue which deems them as a riskier asset to most traditional lenders. It has also become apparent that women business owners on average have lower credit scores than male business owners, which makes it harder for them to secure traditional financing as well. 2/3rds of all women owned businesses actually have less than $25,000 in revenue a year, another big hinderance to their financing needs. We can only hope and assume that as women owned business age and become more common their lending forecast will look much better