Ask MetaFilter questions tagged with financing

Where is the idiot's guide to financing a web startup?

nyc_consultant — Tue, 08 Sep 2009 07:55:03 -0800

Where is the idiot's guide to financing a web startup? I have an idea for a website. I have found a partner, and we have a good handle on the technical/customer/market/revenue issues. What I don't have a good handle on is the equity and financing path over the next 4 years - we will need 2 rounds of funding and I know the approximate amounts.

I also I haven't worked with my partner before, so each of us wants to be protected if our priorities change. Where's the "idiot's guide to financing and the equity structure for a web 2.0 startup?"

Car loan and CarMax

crapmatic — Mon, 24 Aug 2009 14:22:23 -0800

Are there reasons I should avoid CarMax auto financing and go with my local bank? We're intent on buying a used car this week at CarMax and my wife wants to use their in-store financing to keep the whole thing simple.

I know conventional wisdom posted all over the Internet holds that you should line up financing at your bank, on the other hand I think it's common knowledge that CarMax is not run like a shark tank. So my question is whether I need to be on guard getting a loan with them and what I might want to watch out for doing the deal. Our time is more important than merely saving a few bucks, which is why we're doing CarMax and trying to get it over with as smoothly as possible, so a few APR points or a few hundred dollars here or there is not a big deal.

I'm already doing a little due diligence by calling both places, but I'd like to know what to ask for or look for. My bank rep admitted to me that their rates aren't as good as dealers right now; she said they offer 8%, no downpayment, and require 2 years of tax returns (I'm self employed). The guy at Carmax would not answer any questions about downpayment, rates, or paperwork requirements until I submit to a credit check. So that's where I'm at now. Both places appear to allow early payment without penalty (this is even stated on the CarMax site) so maybe it's all good and I need to relax.

Alternatives to CareCredit?

Anonymous — Wed, 15 Jul 2009 14:26:22 -0800

For reasons I don't (yet) fully understand, Care Credit has refused to extend me any credit whatsoever towards a year-long set of (embarrassing) medical procedures that will end up totalling in the neighborhood of $30,000 US. What viable alternatives to Care Credit exist for financing expensive and drawn-out medical procedures? More details: Single, no dependents. Only debt of any kind is a 4-year auto loan, which has never been late, and will be paid off in a little over 2 years. I rent. My annual income approaches six figures. I am in no danger of missing work due to the procedures (they're all outpatient).

I just don't understand why I would be rejected for this line of credit (even in this economy) and am hopeful that mefites will be able to recommend some alternative. Thanks in advance.

(As an aside: I'd really like to avoid speculation on what work needs done - the whole situation is one I find dreadfully embarassing, and the question isn't about the procedures needed, merely what alternatives exist to finance them. Thanks.)

Is this wise / How unwise is this?

dance — Wed, 20 May 2009 08:52:50 -0800

Should I take out a car loan? I live in an expensive country but it looks like I'm about to get a steady job with a decent salary. My partner too. We're about to make the move from student style living to normal life and I want to finally buy a decent car that will last a while. But I'm not sure if taking out a loan on a car is a good idea, especially when the car won't increase in value. Can anyone advise? Especially with regards what rules of thumb there are for car loans...I read somewhere above a certain percentage + number of years means the whole thing becomes extremely ill-advised, but under that percentage it's okay.

Obviously the best thing would be to pay for the whole car with saved up cash - but to do that I'll have to wait a lot of years.

down payment after papers are signed

vocpanda — Mon, 16 Mar 2009 21:27:57 -0800

NewCarOwnerFilter: Got a new car, signed the papers (including financing through dealer), and took the car home. Now dealer is telling us that we must put a down payment even though we signed the papers with 0 down. First time buyer here. We bought a new car through a dealership with their financing option on 0% down over the weekend. Today, they called us and said our financing application was denied by the bank unless we put some down payment. The bank, Chase, apparently denied our application due to lack of down payment even though we have excellent credit (>750). The down payment is not an issue, financially for us.

However, what worries me is that the dealership refused to send us anything official from the bank (email, fax, or mail) and insist that we must go to the dealership in order to see any ‘official’ papers from the bank. When we asked the dealership if we can talk to a rep from the bank, the dealership guy on the phone said that Chase would only talk to the dealership since they’re the one booking the deal.

Anything that we need to worry about or am I being paranoid? Again, the down payment is not the issue as much as the fact that the dealership never stated a down payment is a requirement at the time of sale.

Are No-Credit Auto Loans No Problem?

lekvar — Sat, 08 Nov 2008 12:10:26 -0800

Online auto loans; too good to be true? My credit is non-existant, but I need to get a new(er) car. I have a good amount of money for a down payment, but no reputable bank will touch me. However, I just found a number of online auto loan lenders who specialize in bad/no credit/bankruptcy loans.

Obviously, there's no such thing as a free lunch. Just as obviously, I'll likely be hit with a usurious interest rate. I'm OK with that for the time being, but I feel like there's something I'm overlooking.

Any MeFites have experience in this area? Are they a scam or a godsend? Any hidden weirdness I should look out for? Any specific recommendations?

Hard facts and anecdotes are equally welcome.

Public financing of campaigns.

pithy comment — Mon, 23 Jun 2008 06:39:28 -0800

Last week Obama eschewed the public financing system for the general election. It seems that many of the articles I am reading are saying that he is the "first major party candidate to reject public financing and its attendant spending limits." Do they mean in this election, or ever? If they mean "first-ever" (since public financing started) and public financing means a candidate can't raise private funds, then why is there always so much talk of candidates hosting various fund-raising events like $x,000-a-plate dinners? Are the publicly financed campaigns having their PACs raise money or what?

Should I only be paying interest on land I purchased?

Anonymous — Thu, 22 May 2008 23:17:16 -0800

Bought a piece of land and only paying interest. Why would I do that? This is for my mother actually. She bought a piece of land (13 acres) and under the advice of her financial advisor/ stock broker she's paying only interest. She doesn't understand why.

I know she should ask him why, and will, but I'd like to get independent advice. I'm guessing the theory is that he can continue making money in the stock market (more than the interest she's paying) if she doesn't take money out to pay for the land. But this is a bit over my head.

What are the advantages and possible downfalls doing this? A few more details: She's retired, well off but not rich, and has no plans to sell the land (it's family land she's attached to).

Thanks for any advice/suggestions/information.

How to get money to start a business?

frijole — Wed, 02 Apr 2008 08:14:31 -0800

Some friends and I are looking at starting a business, and we need some up-front capital. About $100k. What's the best way to try and get this? Running the numbers, it looks like we'll be able to re-pay it well within the first year of operation, anywhere from 3-4 months (if everything goes perfectly right) to 8-10 months if it gets off to a rocky start. Chances are if it doesn't take off by then, it won't and we'll be hosed.

Should we try to pitch to VC companies, and if so, how does one go about doing this? Should we just try and get a bank loan? Or an SBA loan?

Thanks in advance!

Lease or own, which is a better experience?

geoff. — Fri, 11 Jan 2008 10:16:49 -0800

What's the best way you've found to evaluate whether to lease or buy when financing the purchase of a car? Can I treat it as a forward or future contract? Can I negotiate the strike price? Does anyone have experiences on which worked out cheaper for them (lease, buy)? I was computing the NPV of loan, lease-to-own or lease at each interval (3, 4, 5 years) and try to find which is cheapest. Ideally I would like to have a new car at either 3 or 4 years to get rid of it before the warranty expires. Actually all NPV calculations are within the warranty as I hate owning cars past warranty.

What have been your real, empirical experiences with on whether lease, lease-to-own or a loan would be best?

Looking for financing to start a small business

amysk — Mon, 03 Dec 2007 11:52:34 -0800

My husband has been given the opportunity to purchase a small business. He knows that the company will be sucessful. We need about $10,000 to start it up. Here is the problem: he has a great credit rating, but he is currently unemployed and we do not own a home to put up as collateral. Are there any creative financing solutions out there for him?

buying a car from an individual with my bank in another state, protecting him and me

amtho — Mon, 26 Nov 2007 09:37:51 -0800

How do I be fair to myself and the guy whose car I'm buying, when the actual title transaction will be taking place mostly between banks in another state? Contract/time of delivery/protecting of interests question. background

I'm in the process of buying a 2007 Mazda3 from a nice guy who determined that he couldn't afford the payments. I've had it inspected by a mechanic, it's apparently great. I told him that I could be laid back about when I actually got the car since he still needs to find an inexpensive used car for himself. In exchange, he's going to have it detailed/cleaned for me. It's got around 6000 miles on it, and is probably racking up more, but I've decided not to worry about that.

The total price I'm paying is less than he owes to the Mazda [something] financing co. -- he purchased the car in June and "owns" very little of it. I'm taking a loan out for about 60% of my price from my credit union, which is in GA (I'm in NC). The rest will be sent to the credit union in the form of a cashier's check made out to Mazda [something] financing co.

status

I'm working with my credit union, who has sent a power of attorney form for him to sign that basically says "your credit union lawyer can take care of the title". The credit union requires that POA or the one from NC; I think the POA situation is under control. They also have asked for various bits of legal information, contact info for the Mazda financing co., exact spelling of his name on the title, etc.

How to I make sure that the ownership, and drivership, of the car takes place at a time that protects us both? Should he hand over the keys just based on my word that I'm going to mail stuff to the credit union? Should I let him keep the keys even after sending the stuff to the credit union, until I get a phone call from them saying that the transaction is complete (how inconvenient)? How does this work?

what I'm trying to prevent

What if he wrecks, or otherwise damages, the car between the time the credit union sets up the ownership/loan and the time I get the car? What if he sets up the paperwork, gives me the keys, and then somehow the paperwork gets lost in the mail? What about things that could happen during this time now, between our verbal agreement and any contract/exchange of funds?

wrap up

I did a quick search of the web and even the local library, but example contracts I found were, as far as I could tell, not right for this situation.

I'm thinking we might make some kind of written understanding between us would help, or parking the car somewhere neutral until the transaction is officially complete.

Has anyone done a transaction like this before? What steps make sense?

I'd be willing to hire a lawyer for an hour or so, but am hoping it won't be necessary. On the whole, the seller and I trust each other, but I'm older and feel a responsibility to protect his interests as well.

Also: Should I insist that he provide an actual title, even if it's not in his name? Would he have access to this document? Or will the bank people handle this entirely?

Thanks in advance for any "Not a Lawyer/Not Your Lawyer" advice.

Buy or sell first?

ShakeyFingers — Tue, 16 Oct 2007 11:46:21 -0800

Home finance question - sell my house first or make an offer first? Much more inside... I own and live in a house with a paid off mortgage. Lovely Wife (LW) and I have been looking to get more space, and have finally seen a house of interest.

To minimize the risk of either failing to sell in a timely way or selling for a lot less than we anticipate, we have been advised to try and sell first. LW is afraid that this plan will have us losing the house of interest.

Alternatively, we could make the offer first, but this leaves us with the selling risk, and without the proceeds from the current house to use as down payment for the new. I have seen three suggested solutions:

1. Get a home equity line of credit (HELOC) before listing our house, and use it for the down payment. If I do this, I'm concerned about the credit impact of the HELOC application before I try to get a mortgage. Plus I'm paying for both the HELOC and a new mortgage while I wait for the old house to sell.

2. Get a bridge loan for the down payment. Same issues as above, plus more expensive.

3. Try and mortgage the entire new house amount using both houses as collateral, then refinance when the old house sells. Pretty sure we could afford it for a few months.

I'm at a loss to evaluate these for relative merit. I would be content to sell first, but LW is probably not.

Any words of wisdom?

[More details - current house will probably sell for X, new house is X*2, we have liquid investments of X/2, some of which could be liquidated to help finance the purchase (but we'd rather not). No matter which plan we select, the mortgage will be a jumbo. Finally, we're talking western Cook County, IL if that makes any difference.]

Go Big Or Go Little

jasondigitized — Thu, 26 Jul 2007 11:40:35 -0800

The wife and I just 'committed' to a pre-construction, 2200 sq/ft townhouse in Raleigh. We put down 2k and it will be finished in Mar-Apr 2008. After upgrades, the place will be about 275k. We will most likely stay in this place 5-8 years. My question is about financing. We know nothing about the intricacies of mortgages except what I am slowly learning at Mortgage Professor. We have 100k we could put towards a down payment. Do we go for the 100k down payment, or something a little more creative? We like that fact that we would have a small bi-weekly payment, which gives us peace of mind about carrying the mortgage. We have an additional 200k tied up in index funds and cash. Is this as simple as speculating about what I could get out the stock market or an alternative investment? What factors do we need to consider?

If we only knew.

ok — Thu, 10 May 2007 07:22:37 -0800

0% Ford Financing - will we see it again? Timing is everything. They just ended it, didn't need a car then. We will soon.

How to sell an upside-down car on poor credit?

Ziggy Zaga — Tue, 24 Oct 2006 17:00:28 -0800

My worst nightmares were realized when I found myself in exactly this situation last month. Negotiations with the dealer have failed and we are considering repossession, but we would like a second opinion. Here is where our story starts to differ:

She (girlfriend) went and bought (and financed) a new car behind my back, but she did not trade her current car (also financed) in because she knew she could sell it for more money privately. A month later she's realized that she can't sell the car privately because she has poor credit (resulting from a recent bankruptcy) and can't get a lender to loan her enough money to pay off whatever she doesn't get from the sale (she is severely upside down on her old car, as well as the one she just bought). She is so far upside down on both cars that it would take a colossal idiot to give her anywhere near enough money to pay either of the damn things off.

So now she is stuck financing two cars; a situation she obviously cannot afford. The payment on the old one has already lapsed for one month, so we've got two months to figure out how to get rid of it before plan B (repossession) is forcefully enacted anyway.

(a) The dealer will absolutely not take the new car back.
(b) The dealer has told her that there is no way they will accept the old car as an after-the-fact trade-in because she has too much negative equity--they can't find anyone who will finance the total amount (old + new = over $30k) with credit as bad as hers.
(c) She can't get a personal loan from anybody more reputable than a loan shark that will cover what she owes on the old car, minus what she's asking for it privately.
(d) Insurance fraud is not an option; she does not have gap insurance and it's not really something I want to be party to anyway.

If it matters, the old car is in sellable condition--works fine, with some minor cosmetic damage.

Is there anything she can do to favorably get out of this situation, or is repossession going to be the only option? Furthermore, would having a repossession on her record have any effect on her line of credit for her new car?

I've done my research and I know if we repo she's going to get virtually nothing once it goes to auction, so anything she/I could do to pawn it off, even at below market value, would be better than the alternative.

Thanks

Pick your brains- turn the mortgage industry on its head!

Izzmeister — Fri, 04 Aug 2006 12:16:24 -0800

Building a mortgage company from the ground up- turn it on its head! I am in the process of launching a new mortgage brokerage.

I'm looking for some out of the box ideas that can be used to turn the business on its head- doing things totally differently to generate business and word of mouth...

any ideas?

Some thoughts:

* allowing every single customer to rate the company, bank, loan product with feedback (like ebay style)

* "process your own loan" - do it yourself, be your own broker, pick any program and sign up as a rep for our company and turn each customer into a broker for the company- (people love to see ratesheets and understand exactly what is being done and how much the broker is making)

* "see how much we will make on your loan"

* give a small (stock) ownership percentage of the company to people based on amount of referrals and amount of loans/money closed.

what have you wished would be done differently by brokers? where is the business broken? what other ideas or comments on the above do you have?

and yes, before any of them is implemented, the legality will have to be checked. i know that....

looking for some real good ideas!

Credit card debt vs. car loan debt

tristeza — Tue, 27 Jun 2006 16:18:13 -0800

Which is a "worse" type of debt - credit card debt or car loan? I have a goodly sum left to pay on my car (around $6k). The interest rate is 5.5%.

I have the opportunity to put up to 19K on a particular credit card which they say has a 4.9% APR until the balance is paid in full.

Obviously, one rate's better than the other which is why I'm tempted to pay off the car with the card, but....is credit debt somehow "worse" or more insecure than car financing? Are there pitfalls to the credit card deal I'm unaware of (I had them confirm over the phone the rate for LIFE).

Please assume that a) I will never charge anything else to this card, b) I will pay more than the minimum, on time, every month, til death do us part amen.

Financed Motorcycle Insurance Woes

Bondrake — Thu, 02 Mar 2006 23:31:56 -0800

I financed a used motorcycle and am faced with unexpected high insurance rates. What are my options? I have had bikes in the past, but have paid cash for them. Same thing with all of my cars. I don't like paying interest if I can avoid it at all, but I had been very eager to ride the last couple of months (I'm sure the motorcyclists reading out there know the feeling) and didn't want to wait four months and miss spring riding weather just to have the $5,000 I needed saved to buy another bike, so I bit the bullet and went to a dealership last weekend. I got an '04 SV650s, which is great. With tax, title, license, and a 24-month warranty it came out to around $6,500. I know that is more than I would pay for one private party, but it was worth it to me to be able to ride now.

Here's the problem. I am used to paying less than $30/month for liability insurance. The state I'm in (Arizona) is a title-holding state and I found out after the purchase that I have to have comprehensive and collision coverage if there is a lien on the title. This raises my rate to about $330 /month (I'm young). I have Progressive right now and have gotten higher quotes from a couple of other providers.

Even if I live lean and put my money into paying off the loan in 8 or 9 months (luckily Arizona also has no prepayment penalties) I'm left with an excess insurance payment of at least $2,400 more than I was expecting.

So basically.... overpaying and paying interest in order to ride now rather than in 4 months (and also get an all-inclusive 2 year warranty) was worth it to me... overpaying, paying interest, and overpaying for insurance is definitely not worth it for me.

This leads me to the actual question: What are my options? I initialled a document at purchase that said, "Purchaser understands that there is no right of rescission; no option for return or exhange, and the purchase of title/or registered vehicle(s) has been made." How binding is this and do you think the dealer would offer any flexibility? If so, how should I approach them?

If not, suggestions for alternate providers that might be cheaper would be great. I don't care if they are no-names and could possibly have horrible service, as long as the State of Arizona and my lienholder finds them acceptable. I am a responsible driver/rider and am not expecting any mishaps. I am 20, male, and have one ticket on my record from march of '04 for doing 48 in a 35 (watch out for the camera vans they drive up off the side of the road in Tempe, they trigger at 10 over and Tempe PD thinks it's a good idea to park them immediately after a 45 transitions to a 35 on eastbound lanes early in the morning).

Will the Crooks Get Away With It?

astorias — Sat, 04 Feb 2006 10:01:18 -0800

Will the crooks get away with it? I have some friends who are working for a company that is doing well, and they believe the company will go public or get VC money. However, I know the company has engaged in some questionable accounting practices, and I wouldn't be surprised to see the company leaders get indicted for tax fraud. What are the chances the company will get funding or be able to go public if the CEO is indicted? I'd like to warn my friends that they may be wasting their time, and they could get stuck with a questionable company on their resume. Finally, I am not at liberty to say how I know about the questionable accounting; and I'm just looking for some insight from our financial gurus.

Great Company Name.. how to market it for JV?

Izzmeister — Thu, 02 Feb 2006 05:22:17 -0800

CEO-Filter: Advertising Question: How to I reach my intended audence? I have come up with a phenominal Idea for a company (think mortgagges, title insurnce, that sort of thing.)

I need to find an existing firm that has the infrastructure set up, to take the company name, and domain name (which are trademarked & registered) and use it to set up a new "virtual store" using the current setup and the new brand to increase their market share.

I'm looking for ideas on how to reach those people? (Would it be 'Director of Business Development"?) or do I put an ad in the Wall Street journal (or somewhere else?where?)

I basically have an Idea, trademarked name, logo, and idea.. now I need to find the people that have the dough to make it happen....

sort of like how GMAC Mortgage has Ditech.com, I want a major player to pick me up and see the amazing potential, bank roll it and eventually give me a piece of the pie...

Repercussions of an offer for a famous public company by an unkown one?

Izzmeister — Mon, 09 Jan 2006 08:19:22 -0800

What are the repercussions of an offer for a famous public company by an unknown one? I am looking to take a small publicly traded company, and aquiring another public company (or at least making an offer on it) which is trading on a larger exchange.

I am looking for more information on how such an offer would be looked upon the the general market?

if the company I am interested in is undervalued, and I bring to the table with my all stock offer a compelling story what I feel I can do to create more value for the shareholders of that company, do I have a shot?

And how would the media look at such a tender offer? And if it did not succeed, how would it affect my company and its publicity? negatively?

I'm thinging along the lines of, hypotetically, issung an offer for "JetBlue Airways", with a premium over the current price per share payable in my own companie's stock, with a compelling reason as to how I was going to make the company more money...

For example...

"We feel that the JetBlue name, which is mentally associated with a pleasant, economical, experience, could be leveraged into other industries, such as Insurance. Often times, people are fed up with their Insurance Agents and feel like they are getting "ripped off" (no offense to insurance agents on MF!)...

"therefore, we propose such extension of the JetBlue Brand... JetBlue Insurance Agency will be synonomous with all the "feel good" vibes associated with JetBlue Airways, and we feel would immediately capture a large market share in the Insurance Industry.

Cross Promotion opportunities also abound in inflight advertising..."

I am curious as to what the reaction to such an offer, and its potential repercussions (both positive and negative) to my company.

If it fails, as many offers do, would my company still benefit from the publicity? Would I get a serious response from the company or media?

Thanks for the brain pickin'!

Help me buy an overpriced European sports car.

geoff. — Mon, 17 Oct 2005 07:24:17 -0800

Self-indulgence! Here's the low-down, I drove a Porsche Boxster and found my calling in life. I'll be either out of this country or Manhattan in 1.5 years so if I get a car now I'll definitely be selling it in under two years. Help figure out the best way to pay for this... I guess what I want is somewhat comparable to a lease (which incidently, I don't want to do). I'm in college right now and due to extenuating circumstances am living at home so I now have rent, food and student loan money for my own pleasure. I realize that financially, this is the least prudent thing I can do (though Porsche's keep their value pretty well).

So with all this in mind (deferred student loans used for a terrible purpose) what's the best way to go about this where I can get the lowest payments possible and come out more or less even at the end of next year?

At least in my area it looks like one with 30,000 years can be had for around $25,000. It also looks like Porsche's depcreciate moreso on their mileage than years alone -- and I plan on using this as my second weekend car. This would put a ~$3000 difference between buying it and selling it (could I be too optimistic?). So I think you guys get what I'm trying to do, help me cleverly finance this so that I may not sulk at home.

Credit Card Mortgage

samoa — Sun, 09 Oct 2005 12:05:56 -0800

I have about 75K left on a long term mortgage at about 6.5%. Recently a credit card I have with a large credit limit (20K+) sent checks that could be used for full amount of credit @ 1.9% fixed for the life of the loan. Should I use this to pay off some of the mortgage at a lower interest rate? I know I can make the min payments, are there dangers or problems I'm not considering?

Independence or stability?

Kickstart70 — Wed, 27 Jul 2005 16:04:01 -0800

What's the best way to finance a small business? Or should I, at this junction? I'm looking at the possibilities of financing a business. I have a pretty clear idea of the business concept, and a fair idea of the business potential. However, my debt-to-investments ratio is just about 1:1, and both numbers are not terribly high. The business wouldn't, in and of itself, cost a whole lot to start up but I'd have to support myself and my family (wife, with an upcoming child) while it got going. The debts I have will be paid off within 1 year. The opportunity I see in the business could be taken over by someone else within that timeframe.

What questions should I be asking myself in order to gauge my financial ability to start this business? Or, with a child coming up, should I just stay at my current job (which is fairly stable, if not possessing any expansion capability whatsoever) until debts are paid off and kid is born?