From an office near New York’s Times Square, workers at World Business Lenders call truckers, contractors, and florists across the country, pitching loans with annual interest rates as high as 125 percent. When borrowers can’t pay, the company seizes their vehicles and assets, sometimes sending them into bankruptcy, according to more than two dozen former employees and clients. World Business specializes in subprime business lending—or “alternative” lending, as its practitioners prefer to call it—making high interest loans to small companies that have trouble borrowing elsewhere. The industry has swelled to more than $3 billion in loans a year, estimates Marc Glazer, chief executive officer of Business Financial Services, a subprime lender in Coral Springs, Fla. That’s twice the volume of small loans guaranteed annually by the Small Business Administration. Loans to businesses are largely unregulated and not subject to the federal rules that protect individual borrowers. “This is the new predatory lending,” says Mark Pinsky, president of Opportunity Finance Network, a group of lenders that help the poor. “And the predators, just as they did in the mortgage market, have gotten increasingly aggressive.” Maher and Tamer Kasem, a father and son who sell cigarettes and cosmetics to corner stores in Brooklyn, N.Y., and Philadelphia, are typical customers. They borrowed from World Business in December to keep their business afloat after being rejected by a bank and turned down for a hurricane recovery loan to cover damage from Hurricane Sandy. A saleswoman initially talked about an unsecured $45,000 loan, they say. […]

Getting a mortgage can mean keeping track of a lot of moving parts. Savvy shoppers know to ask lenders about interest rates, closing costs and how much they can borrow. But even seasoned buyers may not know to dig a little deeper. Here’s a look at five key things homebuyers often forget to ask mortgage lenders: What’s the Annual Percentage Rate? Interest rates get advertising attention, but you need to pay equally close attention to the annual percentage rate, or APR. The interest rate, or note rate, is stated on the mortgage note and is used to calculate your monthly payments. But it may not reflect the overall cost of borrowing. Let’s say Lender X offers you a 30-year fixed rate mortgage at 4.5 percent interest. Lender Y offers the same mortgage for 4.25 percent. This would seem to be a no-brainer. But we’re missing some key information, namely all the other costs associated with the loan, from closing costs and origination fees to mortgage insurance and more. Lender Y may have the lower rate, but this loan could cost you more in the long run if their costs and fees are higher. That’s why you need to look at the APR, which factors in those costs beyond just your interest rate. It’s also why lenders are now required to disclose APR. Otherwise, they could hide fees and charges behind an incredibly low — yet ultimately misleading — interest rate. Do I Have to Escrow Taxes and Insurance? Homeowners paid on average about $800 per year for homeowners insurance in 2008, […]

The lottery numbers are getting tempting again: Thanks to recent Mega Millions rule changes designed to build bigger jackpots faster, Tuesday night’s lottery drawing could win somebody $257 million or more. If a single winner chose the cash prize option instead of the annuity (and the majority of winners do), he or she would cash a $139 million check, according to the Mega Millions website.  The odds of winning that life-changing jackpot are less than 1 in 175 million, but the statistics will never discourage those who dream of instant wealth. But maybe they should. Let’s do a quick review of what we know about lotteries, and lottery winners. It’s Not the Jackpot You Think It Is: If you win the Powerball, you won’t actually see the whole $257 million. Uncle Sam places heavy taxes on income that high, so a handsome chunk of your winnings will go to the government. Ironically, a majority of people — even among the ones who say that the rich should be taxed more — feel that those lucky souls who win the lottery shouldn’t have to pay as much in taxes as people who make their money in more conventional ways. It’s a Bad Deal for the Biggest Players: The thought of winning millions is attractive to everyone, but especially attractive to lower classes, who spend up to 9 percent of their income on lottery tickets. With personal debt and unemployment rates at painful levels, who can blame people for being hopeful? But the statistics show that the lottery is a sucker […]

As a small business owner who runs a marketing firm, I hear all the time about the relationships that didn’t work out. Small business owners who can’t find a marketing firm they “click” with, marketing firms that are frustrated by the clients who balk at every idea, etc. Communication is key to avoiding these issues. Remember, marketing is a partnership. Nobody plays tennis alone. You need to be able to do your part to make the relationship work. And a big part of doing your part is being extremely clear about what you want. To do that, you need to ask yourself some questions first. Ask Yourself Before You Hire a Marketing Firm. . . Are You Willing to Listen and Try New Things? Before you spend a penny on your marketing, it’s time to ask yourself if you’re ready, willing and able to listen to the person you hire. No one says you have to implement every idea. Working with a marketer doesn’t mean slavishly adhering to everything they have to say. But if you’re not willing to even consider something different from how you’ve always done it, you’re wasting your money paying for someone else’s new ideas. What’s Your Communication Style? Every business owner is different. Some people prefer to communicate with their marketing firm very rarely, communicating primarily through emails and scheduled meetings. Other people want more time from their marketing team, expecting instant availability and response to calls, emails and tweets. Understanding your communication style is very […]

The euro plunged to new session lows against the US dollar on Thursday, following a string of disappointing economic data released out of the Euro zone, which only reinforced the view that economic recovery in the region remains frail. EUR/USD tumbled to a session low at 1.3633 at 10:50 GMT, also the pair’s lowest point since October 21st, after which consolidation followed at 1.3642, falling 0.68% for the day. Support was likely to be received at psychological level of 1.3600, while resistance was to be encountered at current session high, 1.3738. Eurostat reported earlier on trading Thursday that the preliminary annual consumer price index in the Euro zone, evaluated in consonance with the harmonized methodology, climbed 0.7% in October, marking the slowest pace since November 2009, after in September the index rose 1.1%. Inflation rate diminished in Germany and Spain, with the annual CPI in these countries rising only 0.1% in October. This data puts more pressure upon the European Central Bank (ECB) to increase the money supply and support economic activity. The ECB has said there was a “subdued outlook” for price growth in the currency bloc, while the October data marked the ninth consecutive month, during which the inflation rate has been below bank’s 2% objective. While region’s economy has exited the 18-month recessionary period and survey results improved, the central bank projects a “gradual” recovery. Lower inflation also suggests a weak domestic demand in the common currency bloc. The inflation data “should increase market speculation that the ECB changes […]