Part Time Workers Struggle With Health Care

Part time workers are often on the financial edge, struggling to make ends meet, unable to find full time work. With the weak jobs market, many workers are underemployed, seeking full time positions but having to settle for part time hours. To make matters worse, there is a growing trend amongst companies to no longer provide health insurance coverage to their part time workers.The largest private employer in the United States, Walmart, has recently announced they will no longer offer health insurance to their new part time hires. Walmart had been offering health benefits to its part time workers since 1996, a valuable financial benefit to a position that did not come with a high wage.While the news may create negative PR for Walmart, the Fortune 500 company is hardly alone. The number of large employers offering health insurance benefits to part time workers is down to 42% according to the Kaiser Family Foundation. The rate drops to just 16% of total businesses in the U.S., regardless of size. The cost of providing health care is often too steep for small companies with low payrolls.While some large companies like United Parcel Service provide extensive health coverage to their workers based on union contracts, many more companies provide it voluntarily. Such companies are coming under pressure to change this policy as health care premiums continue to rise at levels well above inflation.Some expect the situation for part time workers to worsen if some of the provisions in the Affordable Care Act are enacted in 2014. One requirement of the new law requires employers with more then 50 employees to offer health benefits or face a $2,000 fine for each uncovered worker. However the penalty only applies to full time workers, not part time workers. Under the Affordable Care act, employers will face no penalty for not providing coverage to a worker who puts in less then 30 hours a week.There is concern the law will provide an incentive for employers to shift to more partial rather then full positions, leaving fewer workers with health coverage. A recent study by the Urban Institute found many employers would not make this switch, as offering good benefits helps retain talented workers. However the study did find that companies with a high number of low wage workers would be more likely to drop their health plans.The reason for this is another provision in the Affordable Care Act. Workers who are at or below 250% of the poverty level will be eligible for federal subsidies to purchase private health insurance. The amount of the subsidy declines as income rises above the poverty level. While this is of some benefit to less then full time workers, the subsidy will likely not cover the full cost of insurance, leaving them behind where they would be with an employer sponsored plan. Because employers will face no fine for not providing health benefits to part time workers, and because many of those workers will be eligible for federal subsidies, companies will have an incentive to create more part time positions that do not offer health care.

Posted in health care | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Comments Off

Commercial Real Estate Lending Trends in 2015 With Comparison to California

In March 2015, the National Association of Realtors (NAR) invited a random sample of 49,485 realtors who worked in commercial real estate to fill out an online survey. A total of 791 responses were received for an overall response rate of 1.6 percent. The survey queried realtors’ opinion of how they found their lending environment to be during that past year. Living and working in California, I find it interesting and informative to compare general results to survey opinions in our state. I think you will find it instructive, too. Without further ado, here are the opinions of the brokers and private lenders as mentioned state by state:States that provided difficult lending situationsThe National Association of Realtors (NAR) found that 58% of investors preferred approaching banks but not all banks were ready to lend. Of those that did, these traditional lending institutions aggravated the situation with clumsy procedures, irksome schedules and terms, and long drawn out processes. Few banks,too, exerted themselves to please their clients or to make the situation more comfortable for them.Said a private lender in New YorkBanks have been very aggressive to get deals financed.Such a situation can be expected from a city like New York where banks have to be on their feet regarding delays and have had to cut back due to bad loans. Besides, New York is known for its aggressive and abrasive environment. Deficiency of empathy to clients is one of its sore points.More unexpected has been the fact that genteel places such as Louisiana are reporting the same difficulties.Said a local agent:Banks are doing well but they make it hard to do business, and is hard to move forward in an environment like this. – Louisiana
And in North Carolina:The money is cheap, but still very difficult to obtain. – North CarolinaApparently, the banks place monopoly on investors and act like nefarious scrooges. Other investors had this to say:The rules put in place for the big banks are handcuffing the regional and community banks. – North CarolinaJust refinanced 3 properties from $150,000 to $1,000,000. Low loan to value deals. – ColoradoSecondary market commercial financing terms are either so burdensome that it’s not worth the process, or terms so tough that purchasers do not see the value in financing and just pay cash for smaller commercial deals. – New MexicoStates who found the lending environment goodIf you want to invest, you may wish to consider moving to one of these areas. There is less opportunity than in California. There may be a flatter market in place with distressed inventory and possibly less promise, but the banks are more eager to help investors.There is plenty of money available for qualified buyers of commercial properties. – TexasFinancing has not been a problem with reasonable transactions. MassachusettsStates that provide a positive environment for commercial private lenders to work inLending conditions of banks in the majority of the states in 2015 have been frustrating for consumers which makes it an ideal situation for private money lenders such as hard money lenders who thrive on disappointed investors. Hard money lenders step in where banks fail with promises of convenience, solid attention, client comfort, fast hand-overs (think of receiving a loan in the same week as compared to a 60 days plus of the banks!) and far less paperwork. All you’d have to do is sign your name on a few forms and fill out details regarding the value of your property and your work, experience, and/ or credit background. Nothing major and far smoother than the banks. The underwriting, in short, is lovely. Even the loan-to-value structures in some places (particularly in California) has picked up with commercial private lenders now offering higher to full percentages.The downside is the high interest rates and balloon payments (think of payments that are double as much as banks). On the other hand, shunned want to-be-investors may have no alternative.Agents in Pennsylvania and Carolina lauded the private lending market:Generally, entrepreneurs have vision and are way ahead of the cultural curve while banks operate seemingly in a closed cave and compensate for their lack of skill with aggressive rates and terms, or an unrealistic client process. – PennsylvaniaCarolina was more severe. One investor explained that he preferred the alternate sector because:I think the banks have let down the entire country. They are mindless lemmings and have abandoned their role in the greatest economy. – North CarolinaThese agents in Georgia, Carolina and Illinois, for instance, who were let down by their banks may have no choice but to seek out private commercial lenders especially if they want to invest.Illinois: Commercial funding is a problem. I have a great property on the market for 1 year and no takers.Another commented that banks areSlow in processing loans. Abnormal waiting time to be funded. – IllinoisNorth Carolina: Commercial land loans almost non-existent.And Georgia. (He sounds really caustic):When lenders begin lending again, the demand backed up by buyers is very high and the economy will perk along. No money – no recovery.Agents in Wisconsin found a similar situation:Banks have gotten much more aggressive for owner occupied transactions.Seems as though, some private investors would find a ready market in Kentucky:Generally speaking only local banks are lending commercially. It takes twice as long to get a loan and the underwriting requirements are too restrictive. – KentuckyFinally, it seems as though in Ohio, small businesses have no choice but to approach hard money lenders:Big banks are not making loans to small companies anymore… only to big businesses.Flip to the private commercial lending environment in California… The National Association of Realtors discovered that private lenders run a booming lending business in California. More brokers have joined and more are investing in the field. Private lenders in California have profited from a growing interest in investing that came upon the shorttails of the recession. 2015 was a good year with private lenders mainly servicing entrepreneurs and small business owners. As mentioned, these were ones who were turned away from the banks.During the last year, private lenders also boosted the attractiveness of their field by eliminating one of their problems: the low loan-to-value (LTV) rate. Originally, lenders only doled out LTV rates that ranged from 50- 60% which is hugely low for the value of private property. A growing number of agents felt comfortable enough to raise their LTV rates to 80%. Some meet full property percentages. This and tightening government regulations to protect borrowers (particularly residential borrowers) has made investors more willing to see private commercial lenders as an attractive alternative.On the flip side, growing prices and the bonus high interest rates of lenders resulted in a rising percentage of defaults. Inexperienced and new agents had more of these collapsed repayments than others. Defaults are predicted to rise the coming year largely due to an increase In interest rates. Government regulations, too, have meddled in the situation with irksome and complicated rules that force lenders to protract time to acquire loans thus making an original attractive private lending situation less so.Nonetheless, these years seem to be a good time to enter the private commercial lending market in California, particularly if you know how to do it.Here are some of the reports as published by NAR:Most people say they will talk to their bank for commercial loans. – CaliforniaTrue. But then, a majority are turned away. This is particularly due to the fact that:Excessive regulations and self-imposed bank red tape have made commercial borrowing difficult for legitimate customers. – CaliforniaThis causes many investors to turn to hard money lenders.I think there’s enough money available, the problem is not the Banks; it’s the borrower’s inability to qualify for financing. – California
And said another private lender who world in California:Many, many obstacles to getting a loan. Even experienced loan brokers aren’t sure of their deals until the very end of the process. – CaliforniaWhich is why hard money lending in California is thriving…

Posted in Finance | Tagged , , , , , , , , , | Comments Off

Using Payday Loans For Bad Credit Management: There Are Better Options Out There

The financial difficulties that we all face are not small matters. These days, simply meeting our regular bills is something of a challenge, and dealing with these commitments can drive some people to desperate measures, such as taking out a payday loan for bad credit management purposes.In fact, getting a loan under such terms is something of a knee-jerk reaction to counter mounting pressure. Rarely, if ever, will such a move alleviate the problem, and often it leads to a worse situation which prompts the borrower to opt for bankruptcy. It is possible to avoid declaring bankruptcy completely.But exactly why is a payday loan such a bad option when it is arguably the most accessible loan type for bad credit borrowers? Well, while they do have their uses, there other options to consider that are more proactive solutions, and come with far less associated pressure.Why Payday Loans May Not WorkTaking out a payday loan for bad credit management purposes can create more problems than it solves. For a start, the interest rate that is typically charged on this kind of loan is extremely high, ranging between 30% and 50%, depending on the lender.What is more, the amount of time that is given to clear the debt in full is extremely short, with as little as 14 days stipulated in some contracts. This is because the loan is granted against an upcoming paycheck. And with so little time and such high interest, pressure increases dramatically, so that in the long run, it becomes difficult to avoid declaring bankruptcy.Anyway, the size of a payday loan is small. The maximum available is $1,500, which is enough to deal with a financial emergency. And since full repayment ($1,950) is taken from a paycheck, there is little left to deal with regular monthly obligations.Why Payday Loans May WorkOf course, there are situations where using a payday loan for bad credit management is a perfectly viable option.For example, because they are granted with no credit checks, even applicants with the worst credit history can access the funds.It is also possible to get the funds very quickly, with the approval process taking as little as a few minutes. This is because the only condition is that the monthly paycheck is large enough to repay the loan in full. So, once confirmation of income is provided, the lender will grant the funds.The ambition to avoid declaring bankruptcy can also be served if the funds are used to deal with an emergency debt, which would otherwise throw finances into chaos. For example, if $1,000 is secured through a payday loan, it can be used to ensure a mortgage payment is made, or final notice on a credit card debt is dealt with.Other Solutions To The ProblemOf course, there are those who believe bankruptcy is a practical solution to an impossible financial situation, and if getting payday loans for bad credit management purposes fails, it is hard to avoid the fate. But there are other options to consider too.It is possible to avoid declaring bankruptcy if a consolidation loan is secured instead. This offers a constructive solution to debt problems by clearing all debts in one go and replacing them with a single loan. If the term is long enough, then the repayments can be as much as 50% less than the original monthly obligation.It might seem that a payday loan is the only viable option before bankruptcy, but that is not true. So, take some time to consider a consolidation loan – which can be approved within 24 hours – before jumping to the highly-expensive payday option.

Posted in Loans | Tagged , , , , , , , , , , , , , , | Comments Off