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> What do
you Obtain by using our Services?
By using Fidelity Financial
Group, Ltd.’s services to help you with your private
loan, you obtain many tangible things that are necessary
for a multitude of purposes, including:
1. Loan Documents.
We insure that the parties’ loan is properly documented.
If a private loan is not properly documented, the Internal
Revenue Service or other third parties may characterize
it as a gift, rather than a loan. Furthermore, an improperly
documented loan may not be enforceable because it fails
to comply with applicable legal requirements. Finally,
an improperly documented loan may lose value, because
it lacks incidents that would make it transferable to
other parties.
2. Proper Accounting.
Private loans can entail a lot of variables that can
cause its balance to fluctuate – interest charges,
late and other loan charges, escrows such as taxes and
insurance, and the like. Properly applying payments
can be difficult, and mistakes costly, frustrating and
time consuming. In addition, the lender and borrower
may want to use adjustable interest rates for their
loan because interest rates, like inflation, are constantly
changing. Adjustable interest rates can offer the safest
security to a lender that he/she will earn a certain
return on their investment, the loan. At the same time,
adjustable interest rates can offer the least cost for
the borrower. Fixed interest rates always carry a cost
for the risk of interest rate movements. The use of
an adjustable rate with a private loan, makes it difficult
to track and apply payments and loan balances. We have
the systems to insure that the loan carries proper accounting
and reporting, so that the parties don’t have
to worry whether mistakes are made and payoff figures
incorrect.
3. Security.
Private loans, like bank loans, should be secure. If
structured properly, repayment is assured. Collateral
must be carefully selected and monitored. Filings must
be made so that third parties know about the loan and
its security. Certain actions must be taken at certain
times to make sure the security is maintained, otherwise
the secured position is lost. We can help the parties
make sure the lender’s private loan is secure.
4. Escrows.
We can help the parties establish and maintain escrow
accounts for the loan, for the payment of such things
as taxes, insurance and other items.
5. Tax Reporting.
We generate the tax reports the lender and borrower
need to account for the loan. The lender will need the
reports to declare the interest as income, and account
for the monies as a loan. The borrower will need the
reports to deduct the cost of the finance charges, for
example, as a home mortgage interest deduction or a
business financing cost.
6. Electronic
Reporting.
We build our services on an electronic platform. The
borrower and lender will receive regular and periodic
reports that are enabled by this platform.
7. Loan Packaging.
We help the parties develop a full loan package, complete
with loan documents, financing instruments and disclosures.
We can also help the parties complete and document a
standard loan application, complete with credit report
and other incidents normally associated with a loan
that can be sold in the secondary market. As such, we
can help the parties structure the loan, so that it
can be more easily refinanced or sold, in the event
the lender needs to obtain the return of its capital/investment
before the loan matures.
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