Commercial loan brokers can save you time by identifying the best loans for your business’s needs. They can also help you navigate the often complicated process of identifying eligibility and applying for financing. Because loans can be highly specific, there are various types of loan brokers who specialize in different commercial loans. Finding the right broker can be as important as selecting the right loan for your business. Definition and Examples of a Business Loan Broker A business loan broker specializes in connecting businesses with third-party lenders and investors to secure loans for their business’s needs....

In this case, the derivative is the contract. The underlying asset is the resource being purchased. If the market price of the underlying rises more than expected during the length of the contract, the business will save money, since the asset can be purchased at the lower, fixed price of the contract. If the market price drops or rises less than expected, the business will have lost money, since it will purchase the underlying asset at the higher-than-market derivative contract price....

A holiday loan has a fixed interest rate, fixed monthly payment, and a set loan term, typically offering a predictable repayment schedule from six months to five years. Some lenders may charge an upfront origination fee to cover the costs of creating the loan. Depending on the lender, you may be able to borrow up to $5,000 to purchase gifts for loved ones or to pay for other holiday expenses like festive meals and plane tickets....

Definition and Examples of a Life Insurance Health Class A life insurance health class is part of a system insurance companies use to determine the premium you’ll pay on your policy. An insurance company places applicants into figurative groups or classes based on their projected mortality risks. When you apply for life insurance, you need to answer questions about your occupation, hobbies, and whether you smoke. You’ll also typically answer questions about your health history and your family’s health history, and may be required to take a medical exam....

The United States Constitution guided America towards a mixed economy. The Fifth Amendment protects ownership of private property. It also limits government interference in business operations. That promotes the innovation that’s a hallmark of a market economy. At the same time, the Constitution encourages the government to promote general welfare. That creates the ability to use aspects of a command economy if it’s for the overall good of the people....

Definition and Examples of a Mortgage Par Rate A mortgage par rate is an unadjusted rate. “Think of a mortgage par rate as essentially a ‘base rate,’ with no special discounts and no markups added by a mortgage broker,” Tabitha Mazzara, director of operations at Mortgage Bank of California, told The Balance by email. You may be more familiar with the terminology “points,” something a mortgage par rate does not include, since it is the mortgage rate before any discount points or lender credits....

kyoshino / Getty Images Alternate names: Alternate income loan, alternative income verification loan, no-doc loan, bank statement loan, no-income verification mortgage For example, if you don’t work because you receive monthly payments from a trust that your well-to-do grandparents had set up for you, you have an alternative source of income. If you decide to buy a house, you might need to apply for a mortgage. The lender would need to verify that you have enough alternative income to make payments and would determine your ability to pay off the mortgage eventually....

Managers often create a performance improvement plan after issuing at least one verbal or written warning, although the process varies at different employers. Once placed on a PIP, employees usually have 30, 60, or 90 days to achieve their goals. Example of a Performance Improvement Plan Most performance plans include the following sections: Employee Information This includes your name, job title, manager’s name, and date the plan was issued. Statement of Purpose In the first line or first paragraph, the manager will summarize the problem....

Definition and Example of Private Foundation Private foundations are charitable entities supported by a single benefactor or by a small number of sources. It’s common to see private foundations supported by a business, a family, or an individual. The IRS categorizes 501(c)(3) organizations as either public charities or private foundations. These designations are determined based on the level of public involvement in the charitable activities. Public charities typically receive a greater portion of their financial support from either government units or from the general public....

Francesco Carta fotografo / Getty Images Stores offer private label credit cards to boost sales and maintain customer loyalty. Some private label credit cards are part of the store’s customer loyalty program, which allows cardholders to accumulate rewards that can be used as a discount on a future purchase. Examples of private label credit cards are: Alternate name: Store credit card, retail card, closed-loop credit card How Private Label Credit Cards Work Retailers or brands partner with a bank to offer credit cards that incentivize customers to shop within the store....

Property Taxes vs. Income Taxes A taxpayer who loses their job will find that their income taxes go down, because they’re earning less. However, their property taxes will remain the same, even though their ability to pay those taxes has decreased. Residential taxes are said to be “regressive” for this reason. The Institute on Taxation and Economic Policy (ITEP) assessed the fairness of state and local property tax systems. It found that they’re fundamentally inequitable, because they take a much greater percentage of income from low- and middle-income families....

Let’s review how a reverse stock split works, why companies may use them, and what investors should know about them. Definition and Example of a Reverse Stock Split Reverse stock splits are when companies consolidate shares, typically to increase the share price. Each share is converted into a fractional share, and the share price is increased by the amount of the reverse split. For example, say a stock was priced at $1 per share and an investor owned 500 shares....

Definition and Examples of a Safe Haven Investing means accepting some level of risk. The stock market can be volatile, causing the value of a share to rise and fall very quickly. Investors worried about excess volatility in their investment portfolios may want to look for safe havens. Bonds are a classic example of a safe haven asset. High-quality bonds with a low risk of default continue to pay interest through good times and bad....

Individuals, businesses, estates, trusts, and taxpayers age 65 or older all have their own tax returns for reporting this income and claiming deductions and credits. Generally speaking, the average taxpayer files their return via Form 1040. Example of a Tax Return Form 1040 calculates the amount you personally owe in income tax, taking various factors into consideration. Your total tax owed will depend on your filing status and how much you’ve already paid to the IRS during the tax year....

PhotoAlto/Frederic Cirou / Getty Images Whole loans are an alternative to securitization, which is when a financial institution pools multiple loans and issues a security backed by these loans, known as a mortgage-backed security (MBS). These then are broken up and resold to investors. Whole loans are not broken up; hence, the name. Lenders may resell whole loans or keep them on their books. In the latter scenario, the loans remain financial assets for the lending financial institution....

A firm interested in improving their customer service practices may compare its own processes and metrics against those of its most successful competitor. If it identifies negative discrepancies or differences in measures, it may start improving its processes to strengthen its performance. The firm will observe and measure the competitor’s operations, and in some industries, it will send in employees as customers to gain direct experience. A good example is a quick-service/drive-thru restaurant chain....

When a company is considering going public, it typically hires an investment bank to advise it, and guide the company through the lengthy and costly IPO process. The investment bank, as the lead underwriter, commits to buying all the shares from the issuer at a certain price, assuming the risk of carrying them. Then the bank resells the shares to the market. With book building, the investment bank solicits a range of bids from its client base of institutional and large investors with capital....

Companies may create CSR programs that involve every part of their business and often have dedicated staff members and resources for CSR. Types of Corporate Social Responsibility In 1991, researcher Archie B. Carroll, came up with a ‘pyramid of corporate social responsibility.’ His pyramid included the four components of CSR – economic responsibility (make profits), legal responsibility (follow laws), ethical responsibility (be fair) and philanthropic responsibility (be charitable). These components have evolved over time into the following types of CSR:...

Many people invest in bonds because they’re seeking regular interest payments called coupons for fixed income. When you sell a bond between coupon payment dates, you’re entitled to the price of the bond in addition to the interest that accrued between payment dates. To calculate the dirty price, you need to know the clean price along with the amount of interest that accrued. The dirty price is calculated as follows: Dirty price = Clean price + Accrued interest You’ll typically see a bond price quoted as a percentage of its face value, also known as par value....

Let’s explore the basics of market frothiness and how to tell when we’re in a frothy market. We’ll discuss some historical examples of froth, such as the dot-com bubble and the period leading up to the 2008 housing crash. We’ll also cover what to do if you’re worried that a market bubble is about to burst. Definition and Examples of Froth Froth is generally the period in which demand drives up an asset price to unsustainably high levels....