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How Functional Capacity Exam May Impact Your Long-term Disability Claim

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How Functional Capacity Exam May Impact Your Long-term Disability Claim

Key Takeaways:

  • A functional capacity evaluation (FCE) tests your physical ability to preform specific abilities.
  • There may be significant safety issues for some people undergoing an FCE test.
  • Therapeutic intervention can reduce the validity of an FCE.
  • FCEs are not uniform or standardized.
  • Always discuss undergoing an FCE with your primary physician.
  • Contact a disability attorney prior to undergoing an FCE, as its results could impact your case.

Insurance companies often request that a claimant undergo a functional capacity evaluation (FCE) for long-term disability claims. However, attending an FCE may be harmful to your claim. Also, many policies do not have any contractual language obligating claimants to undergo a functional capacity evaluation. You may be able to object to an FCE, even if you have a policy that requires one.

When you understand your rights and prepare adequately for the FCE, including using the advice of your treating physician and the guidance of a knowledgeable disability attorney, you can navigate the process with confidence and the knowledge that your evaluation will more accurately reflect your capabilities.

Contact the Law Office of Justin C. Frankel for a free consultation and to learn more about your rights before submitting to a functional capacity evaluation.

What is a Functional Capacity Evaluation (FCE)?

An FCE test for disability is a series of tests that measure several physical abilities, including:

  • Strength
  • Flexibility
  • Endurance
  • Pain
  • Cardiovascular fitness
  • Lifting ability
  • Coordination
  • Static posturing
  • Repetitive movement
  • Other physical abilities

However, these types of activities are potentially extremely dangerous to claimants’ health and could aggravate their conditions.

What to Expect at a Functional Capacity Evaluation

If you and your attorney agree that you should attend an FCE required by your disability insurance company, you can expect:

  • Pre-Evaluation: The doctor performing the FCE may ask you to provide your medical history, your current symptoms, and information about your job duties. You may also discuss your functional limitations, impairments, and pain levels.
  • Physical Examination: The doctor will most likely take your vital signs, including blood pressure and heart rate. He or she may also evaluate your muscle strength, posture, flexibility, reflexes, coordination, motor function, and the range of motion of your joints.

The functional testing portion of the FCE covers several tests, including:

  • Strength Testing: Upper and lower body strength for pulling, lifting, carrying, and pushing
  • Endurance Testing: Ability to sustain physical effort over time, such as doing repetitive tasks, walking, and climbing stairs
  • Mobility Testing: Ability to bend, reach, crawl, and squat
  • Manual Dexterity and Hand Function: Evaluation of eye-hand coordination, including gripping, manipulating small objects, and pinching
  • Postural Tolerance Testing: Ability to tolerate sitting, standing, and kneeling for extended periods

In addition, the FCE will evaluate your ability to perform specific tasks that are the same as your job duties, such as handling tools, operating machinery, or assembly tasks. The assessor monitors and documents pain and fatigue and how they affect your performance.

Are Functional Capacity Evaluations (FCEs) Safe for Patients?

In a study published in Physical Therapy, a medical journal, the authors concluded that there are significant safety issues regarding FCEs. Because a patient is asked to perform physical tasks to demonstrate maximal effort, it could exacerbate the injury or cause additional injury without a physical therapist available to note exterior visible signs of unsafe performance. The authors also concluded that the assessors should have available criteria to determine when maximal effort has been put forth and when to intervene. Currently, no such criteria exist.

What Are the Deficiencies in FCEs?

A man consults with a doctor across a desk in a well-lit, clinical room; medical equipment is visible in the background. Both individuals appear engaged in conversation. - The Law Offices Of Justin FrankelHow Functional Capacity Exam May Impact Your Long-term Disability Claim

Also, according to Physical Therapy, FCEs have many deficiencies, including:

  • Lack of research
  • Lack of protocol
  • Lack of standardization
  • Lack of ability to project what a patient can perform during an 8-hour workday
  • Significant safety deficiencies
  • Very few peer-reviewed journal articles regarding reliability

Additionally, the assessor could conclude that the patient is not putting forth maximal effort, even though he or she is, as there is no reliable and valid method of determining lack of participation.

What Should You Do if Required to Undergo an FCE?

If you are asked to undergo an FCE, consult with a knowledgeable disability insurance attorney to determine if you are contractually required to undergo an FCE. Even if required, you should discuss the potential for harm with your treating provider, who should be required to authorize a claimant’s participation in such testing.

If your insurer says you must attend an FCE for your long-term disability insurance claim, please do not hesitate to contact our nationwide office to see how we can assist you.

How is an FCE Used to Determine Eligibility for Disability Benefits?

An FCE can play a role in determining eligibility for long-term disability benefits, though its role may not always be beneficial for your long-term disability claim. Disability insurance companies use FCE results in the following manner:

  • Comprehensive Assessment: The FCE provides detailed data on your functional abilities and specific limitations and how the limitations affect your ability to perform work-related tasks.
  • Medical and Vocational: The disability insurance company can compare your FCE against your medical records to support or deny your claim for disability benefits. Medical experts can also use the FCE results in testimony for or against you in your initial disability case or a disability appeal.
  • Correlation with Job Requirements: The FCE report compares the physical demands of your job to help determine whether you can perform your current job or a modified version of your job.
  • Determining Restrictions and Recommending Accommodations: The FCE results can help identify work restrictions or recommend reasonable accommodations that would help you do your job safely and effectively.
  • Baseline Functional Ability: The FCE results can establish a baseline of your current physical condition. If you are undergoing rehabilitation, your disability insurance company can ask for it to be repeated so it can track changes in your functional abilities.
  • Rehabilitation: The FCE can also guide rehabilitation professionals in creating a tailored therapy plan or a structured return-to-work plan.

How Do I Prepare for a Functional Capacity Evaluation (FCE) for Disability?

Preparing for an FCE involves several steps.

First, consult with your attorney to determine whether you must take an FCE. If your attorney advises you to undergo the FCE, speak with your doctor and physical therapist regarding the safety of undergoing an FCE.

Additionally, understand your job duties and print out a detailed job description to take with you. You may be asked to bring medical records and other relevant documents related to your disability claim. Wear comfortable clothing and take medications as prescribed.

How Long Does an FCE Take?

The length of time for an FCE depends on the exercises you will need to do. However, an FCE generally lasts one to two hours.

What If I Fail My FCE Test?

If you fail the FCE test, that typically means that the examiner determined that you cannot perform tasks essential to the work you did before your injury. If the insurance company scheduled the FCE then it is likely that they will not provide the claimant with a copy of the report unless they use it to deny or terminate the claim. If it is scheduled by the claimants doctor the claimant will get a copy of the report. Give a copy of the results to your doctor and your attorney if possible, especially if you must meet a court deadline.

Why Clients Trust The Law Office of Justin Frankel With FCE Requests

The Law Office of Justin C. Frankel has experience handling disability claims that require FCEs. We take a compassionate approach where we listen to your claims and unique circumstances to create a personalized approach to your case. We also offer comprehensive support throughout the FCE process and coordinate with medical professionals where necessary. Most importantly, we help you understand the FCE process, your rights and the potential outcome.

Testimonials

“Justin and his team instantly made me feel valued and heard.” — Anthony O.

“I have been working with Mr. Justin Frankel, ESQ., for nearly 20 years, and I have been extremely happy with his services.” — Noa B.

Need Help With An FCE Decision? Consult Our Experienced Attorneys Today

At the Law Office of Justin C. Frankel, we are dedicated to helping our clients navigate the disability claim system, which is why our firm focuses entirely on disability insurance claims and appeals. We have won over $250 million in compensation for our clients and have been awarded the Super Lawyers recognition every year since 2013. We also have a 4.9 average star rating on Google.

When you choose the Law Office of Justin C. Frankel, you are working directly with a top partner — not an associate. Let us use our 20-plus years of experience with disability insurance claims to your advantage. Contact the Law Office of Justin C. Frankel at 888-583-4959 or through our convenient online contact form for a free consultation.

The Ultimate Guide To Budgeting

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The Ultimate Guide To Budgeting

The Ultimate Guide To Budgeting

In today’s financial landscape, mastering the art of budgeting and money management is crucial for achieving financial stability and reaching your goals. This Ultimate Guide To Budgeting, brought to you by Badger Loans, will provide you with practical strategies and insights to take control of your finances, whether you’re just starting out or looking to improve your financial health.

Understanding the Importance of Budgeting

Budgeting is the cornerstone of sound financial management. It allows you to:

  • Track your income and expenses
  • Identify areas where you can save money
  • Set and achieve financial goals
  • Live within your means
  • Prepare for unexpected expenses

By creating and sticking to a budget, you can gain a clear picture of your financial situation and make informed decisions about your money.

Creating Your Budget

Step 1: Track Your Income and Expenses

Start by recording all sources of income and every expense for at least a month. This will give you a realistic view of your financial situation.

Step 2: Categorise Your Spending

Divide your expenses into categories such as:

  • Housing (rent/mortgage, utilities)
  • Transportation
  • Food
  • Healthcare
  • Debt repayments
  • Entertainment
  • Savings

Step 3: Analyse Your Spending Habits

Look for areas where you can cut back on unnecessary expenses.

Step 4: Set Financial Goals

Establish both short-term and long-term financial goals. These might include:

  • Building an emergency fund
  • Paying off debt
  • Saving for a house deposit
  • Planning for retirement

Step 5: Create Your Budget Plan

Allocate your income towards essential expenses, savings, and debt repayment. Use the 50/30/20 rule as a starting point:

  • 50% for needs
  • 30% for wants
  • 20% for savings and debt repayment

Tools for Budgeting

  1. Spreadsheet software like Excel (Great explanation even we could use!)
  2. Budgeting apps (many of which offer Open Banking features)
  3. Traditional pen and paper

Choose a method that works best for you and stick with it.

Staying on Track with Your Budget

  1. Review your budget regularly
  2. Use automatic transfers for savings and bill payments
  3. Avoid impulse purchases
  4. Find ways to increase your income

Managing Debt

  1. Prioritise high-interest debt
  2. Consider debt consolidation options
  3. Negotiate with creditors for better terms
  4. Avoid taking on new debt while paying off existing obligations

Saving and Investing

  1. Build an emergency fund (aim for 3-6 months of living expenses)
  2. Take advantage of tax-efficient savings options like ISAs
  3. Consider pension contributions for long-term savings
  4. Explore ethical investing options aligned with your values

Thriving in Uncertain Economic Times

  1. Invest in recession-proof industries (healthcare, education, essential services)
  2. Consider starting a side business in essential services
  3. Buy non-perishable items in bulk to save money
  4. Evaluate your living situation and consider relocating if necessary

Teaching Financial Literacy to Children

  1. Encourage an entrepreneurial spirit
  2. Teach basic accounting and budgeting skills
  3. Highlight the value of delayed gratification
  4. Discuss the risks of debt
  5. Introduce the concepts of saving and investing

Where to Get Help

If you’re struggling with your finances:

  1. Seek advice from free services like Citizens Advice Bureau or The National Debt Helpline
  2. Consider speaking with an Independent Financial Adviser
  3. Contact your lenders to discuss options if you’re having trouble making payments

Conclusion

Budgeting and managing money effectively is a skill that can significantly improve your financial well-being. By following the strategies outlined in this guide, you can take control of your finances, achieve your goals, and build a more secure financial future.

Remember, Badger Loans is here to help with your financial needs. We offer unsecured loans of up to £25,000 over 1 to 60 months for UK residents aged 18 plus.

By following this guide and making informed financial decisions, you can work towards a more stable and prosperous financial future. We wish you all the best!

Apply for a Loan with Badger Loans

How can I access the Member Rate Discount?

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Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status and and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates reserved for the most creditworthy borrowers. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, years of professional experience, income, and a variety of other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Financial Protection and Innovation under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp. or an affiliate, NMLS # 1121636. (www.nmlsconsumeraccess.org)

✝︎ To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

©2024 Social Finance, LLC All rights reserved.

International P2P Lending Volumes August 2024

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International P2P Lending Volumes August 2024

The table lists the loan originations of p2p lending marketplaces for last month. Mintos* leads ahead of Peerberry* and Esketit*. The total volume for the reported companies in the table adds up to 285 million Euro. I track the development of p2p lending volumes for many markets. Since I already have most of the data on file, I can publish statistics on the monthly loan originations for selected p2p lending platforms.

Investors living in national markets with no or limited selection of local p2p lending services can check this list of international investing on p2p lending services. Investors can also explore how to make use of current p2p lending cashback offers available. UK investors can compare IFISA rates.

International P2P Lending Volumes August 2024international p2p lending volume statistics august 2024
Table: P2P Lending Volumes in August 2024. Source: own research
Note that volumes have been converted from local currency to Euro for the purpose of comparison. Some figures are estimates/approximations.

Links to the platforms listed in the table: Bondora*,  Crowdproperty*, Debitum Investments*, Esketit*, Estateguru*, Finansowo*, Finbee*, Folk2Folk*, Geldvoorelkaar*, Investly*, Iuvo Group*, Kuflink*, Kviku.Finance*, Lendermarket*, Loanch*, Mintos*, Nectaro*, Peerberry*, Proplend*, Robocash*, Swaper*.

Notice to p2p lending services not listed:
For new companies a small listing fee applies. If you want to be included in this chart in future, please contact me for more information.

Notice to representatives of press/media: If you are interested in publishing a branded version of this table in your own layout/design, which will make a nice addendum to your coverage of p2p lending, please contact me.

International P2P Lending Volumes July 2024

Understanding the Short-Term Disability Elimination Period

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Short-term disability insurance is a valuable resource designed to provide financial protection when you are unable to work due to a disability, illness, or injury. However, it’s important to grasp the concept of the elimination period when considering a short-term disability policy. In this blog, we will explore the short-term disability elimination period, its significance, and other essential factors to consider when securing this valuable coverage.

What is the Short-Term Disability Elimination Period?

The elimination period, also known as the waiting period, is a specific period of time that you must wait after a disabling event occurs before your short-term disability insurance benefits become payable. It is essentially a deductible of time rather than a monetary amount. During this period, you are responsible for covering your expenses, including medical bills and daily living costs, until your insurance benefits kick in.

Key Points to Understand About the Short-Term Disability Elimination Period:

Varied Lengths: Elimination periods for short-term disability policies can range from a few days to a few weeks, with 7, 14, and 30 days being common choices. The length of the elimination period you select will influence your policy’s premium.

Customizable: One of the benefits of short-term disability insurance is that you can typically customize your policy by choosing the elimination period that aligns with your financial situation and risk tolerance. Shorter elimination periods result in higher premiums, while longer periods lead to lower premiums.

No Retroactive Payments:

Short-term disability benefits usually do not cover the elimination period retroactively. This means that your benefits will begin after the elimination period ends, and you won’t receive compensation for that period.

Influences Waiting Time:

The elimination period significantly impacts when you will start receiving disability benefits. A shorter elimination period ensures quicker access to benefits, which can be crucial if you need immediate financial support during a disability.

Assess Your Financial Situation: When choosing your elimination period, consider your current financial situation. If you have an emergency fund or savings that can cover expenses during a short elimination period, you may opt for a shorter waiting time. Conversely, a longer elimination period might be suitable if you want to reduce your premium costs.

Workplace Policies: If you have disability coverage through your employer, you should be aware of your employer’s policy regarding the elimination period. Workplace policies may have pre-determined waiting periods that you should be familiar with.

Overlap with Sick Leave: For employees, the elimination period may overlap with available sick leave. Some employers allow employees to use accrued sick days during the elimination period, which can provide a financial cushion before disability benefits commence.

Documentation and Application: When applying for short-term disability benefits, it’s essential to provide accurate and thorough documentation to support your claim. Insurance providers may require medical records and other evidence of your disability.

Additional Factors to Consider When Purchasing Short-Term Disability Insurance:

Benefit Amount: Determine the amount of coverage you need to replace your income during a short-term disability. Most policies provide benefits equal to a percentage of your regular income.

Duration of Coverage: Short-term disability policies offer coverage for a limited duration, typically ranging from a few weeks to a few months. Evaluate your needs and responsibilities to choose an appropriate benefit period.

Policy Exclusions: Review your policy to understand any exclusions or conditions that may impact your eligibility for benefits. It’s crucial to know what is and isn’t covered.

Premium Costs: Short-term disability insurance premiums can vary based on factors such as the benefit amount, elimination period, and your age and occupation. Compare different policies to find the best balance between coverage and cost.

Final Words

Understanding the short-term disability elimination period is vital when purchasing this type of coverage. The elimination period determines how long you must wait before you start receiving benefits. It’s a customizable aspect of your policy, allowing you to align it with your financial situation and preferences. Careful consideration of the elimination period, along with other policy features, is essential to ensure you have the right short-term disability insurance to protect your financial security during times of disability.

Tips for Getting Your Small Business Loan Approved 

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Disclaimer: Information in the Business Financing Blog is provided for general information only, does not constitute financial advice, and does not necessarily describe Biz2Credit commercial financing products. In fact, information in the Business Financing Blog often covers financial products that Biz2Credit does not currently offer. 

When you need capital, getting a loan can be the thing that makes or breaks your small business. Whether you’re looking to expand your operations, purchase new equipment, or manage cash flow, having access to additional capital can provide the boost your business needs. Unfortunately, the fact that you need money doesn’t mean that a traditional bank or financial institution is going to loan you some—28% of business loan applicants are rejected or only partially approved. In order to receive financing, you need to show them that your business is sound, that your future is secure, and that you will be able to pay back the money they lend you with interest. And the way that you prove this to them is through a detailed loan application. In this article, we’ll walk you through the tactics and tips that can help you navigate the loan application process and increase your changes of timely approval. 

3 Key Takeaways 

  • Understand what lenders are looking for in a loan application to better position your business for approval.
  • Prepare all necessary documents thoroughly and ensure your credit score is in good standing before applying.
  • Tailor your application to the specific requirements of the loan type you are seeking to improve your chances of securing the best possible terms.

Types of Small Business Loans 

There are several types of loans available for entrepreneurs and small business owners, each designed to help with different areas of your business. Understanding what the options are can help you choose the right financing for your situation. 

  1. Term Loans: Term loans are one of the most common types of small business financing. With a term loan, you receive a lump sum of money upfront that you then repay with interest over a fixed period of time, typically a few years. These loans are perfect for large, one-time investments like buying equipment, expanding your product line, or buying out a competitor. The structured repayment schedule allows for predictable budgeting, but it’s crucial to ensure that your cash flow can support the regular payments. 
  2. SBA Loans: Small Business Administration (SBA) loans are similar to traditional term loans, except that they are backed by the U.S. SBA, reducing the risk of default for lenders. As a result, they have better interest rates and terms, but at the same time, typically take longer to be approved because they come with more requirements and red tape. 
  3. Commercial Real Estate (CRE) Loans: If you’re planning to purchase or refinance commercial property, CRE loans may be the option for you. These loans allow you to purchase real estate or buildings using the financed property as collateral for the loan. And because the collateral is so strong, you can typically secure low interest rates and favorable terms. That being said, any property that you finance must meet minimum appraisal standards, so getting the loan approved may take longer and be more complex than other types of loans. 
  4. Revenue-Based Financing: This type of financing is not a loan, but allows you to repay what you borrow based on a percentage of your business’s revenue. It’s a flexible option, especially if your income fluctuates, meaning that you’ll pay less when your revenue is down and more when it goes up. The downside is that revenue based financing comes with higher interest rates, and the total repayment amount can vary depending on your business’s performance. 
  5. Business Lines of Credit (LOC): Also not a loan, a business line of credit is like a credit card without the plastic. You’ll be approved for a maximum amount of credit that you can then draw on as needed, only paying interest on what you use. This makes it a great option for managing cash flow, covering short-term expenses, or addressing unexpected costs. LOCs can be revolving, meaning you can continue to borrow as long as you don’t exceed your credit limit, making them a versatile tool for small businesses. 

What Are Banks Looking for When Reviewing a Business Loan Application? 

The key factors banks are looking for in your application are referred to as the “5 C’s of credit” and include character, capacity, capital, collateral, and conditions. 

  1. Character: Lenders want to see that you are a responsible borrower, so will check your credit history, looking to see if you have a history of making debt payments on time. If you’re a startup or new business owner, having a good personal credit score can also help.
  2. Capacity: Capacity measures your ability to repay the loan. Lenders will closely examine your business’s cash flow, revenue, and existing debt obligations to determine if you have sufficient income to cover the loan payments. If your business has been showing consistent cash flow for years and you can demonstrate solid financial performance, it will help you convince lenders that you are able to take on additional debt.
  3. Capital: Capital refers to the amount of money you’ve personally invested in your business. If you’ve self-financed your business, it shows investors that you’re highly committed to its success and that you’re confident in the direction it’s headed. Lenders like to see this, and will be more willing to offer you financing because you have skin in the game.
  4. Collateral: Collateral refers to assets that you pledge as security for the loan, including business assets, real estate, equipment, or inventory. Collateral reduces the lender’s risk because it provides a way to recover their money if you default on the loan. If you don’t have a very strong application, offering up more collateral may be enough to get the lender to still offer you financing.
  5. Conditions: Conditions include the overall economic environment, industry trends, and how you plan to use the loan. Lenders will consider how external factors might impact your business’s ability to repay the loan, and they will want to know how the loan will help you improve your business over the coming months and years, as this will be key to your ability to repay them.

How Can You Prepare for a Business Loan Application? 

  1. Educate Yourself: You’ll want to know everything you can about the different types of loan that are available and the various requirements that each has, since not all loans are suitable for every situation. Do a deep dive on the loan options already mentioned to find the one that best fits your business needs. For instance, if you’re looking for a loan with predictable payments, a term loan might be the best option, but if you need flexible cash that you can draw on as needed, a business line of credit might be the thing for you. 
  2. Decide How Much You Actually Need: Business financing isn’t free money–you’ll have to pay back the loan amount that you receive, plus interest. So make sure you don’t take out more than you need; there needs to be a clear path to ROI. At the same time, you don’t want to borrow too little. If your financing doesn’t actually cover your business need, you’ll be digging yourself into a hole with no way out. Carefully evaluate your business goals, calculate the amount of financing you need to achieve them, and check that your projected cash flow can support the repayment terms.
  3. Improve Your Credit: Your credit history plays a big part in being approved for a loan. If you don’t have great credit, start working on improving it as soon as you can, as it can be a drawn out process. If you need to build stronger credit, work on paying off existing debt, making loan and credit payments on time, and be sure to avoid opening any new accounts before submitting your loan application. If you’re a fairly new business, a good personal credit score may help you secure a loan in lieu of business credit history.
  4. Prepare Key Financial Documents: Lenders will require detailed financial information to assess your business’s financial health, including your balance sheet, income statement, cash flow statement, and tax returns. Ensure these documents are up-to-date and accurately reflect your business’s financial situation. Having well-prepared financial statements can demonstrate to lenders that you have a solid understanding of your business’s finances and are capable of managing a loan.
  5. Build a Strong Business Plan: A well-crafted business plan is essential for securing a loan. Your business plan tells the narrative of what your company does, who it serves, and where you’d like it to be over the next few years. A strong business plan not only helps convince lenders of your business’s potential but also serves as a roadmap for your business’s future growth. 

Tips for Getting Your Business Loan Approved 

Once you’ve completed the initial steps in preparing your business loan application, it’s time to focus on strategies that will enhance your chances of approval. Here are a few tips that can help you secure the small business financing you need: 

  1. Showcase Your Cash Flow Management: Banks need to see that your business earns enough cash to cover the loan repayments and your regular expenses. Your application needs to show that you know how to manage cash flow, so be sure to include historical financial data and future projections.
  2. Emphasize Your Business’s Strengths: Every business has unique strengths that set it apart from the competition. Whether it’s a loyal customer base, a strong market position, or innovative products, make sure to highlight these strengths in your loan application. Highlight your competitive advantage as a way of helping lenders understand why offering you financing is a good investment.
  3. Be Transparent About Risks: While it might be tempting to downplay risks your business might face in your loan application, transparency is key to building trust with lenders. Acknowledge any challenges your business faces and outline the strategies you’ve implemented to mitigate these risks. Whether it’s addressing industry-specific risks, economic factors, or competition, showing that you have a clear plan for managing potential issues can reassure lenders that you’re prepared for any scenario.
  4. Tailor Your Application to the Lender’s Requirements: Different lenders have different criteria for approving loans. Some may prioritize your credit score, while others may focus on your business’s cash flow or collateral. Before submitting your application, research the specific requirements of the lender you’re applying to and tailor your application accordingly. For example, if the lender places a high emphasis on credit history, make sure your credit report is accurate and highlight any improvements you’ve made to your credit score.
  5. Explain How You Plan to Repay the Loan: Lenders don’t just want to know how you will use the loan, they also want to know how you’ll repay it. Be sure to include detailed financial projections, sales forecasts, and cash flow predictions that include your loan payments. 

Conclusion 

Securing a loan can feel like a big step if it’s your first time using business financing. But you’re not alone. Over 40% of small businesses in the U.S. applied for financing last year, and with good reason. Business financing can give you a leg up on your competitors and help you break through in the noise marketplace to reach more customers. To have your best chance at getting the financing you need, make sure your application is thorough, tailor your application to meet lender requirements, and double check every detail before submitting. Focus on building a strong financial foundation, maintaining good credit, and presenting a compelling business plan that showcases your business’s strengths and growth potential. 

FAQ Questions 

  1. What do I need to do to apply for a small business loan?

Recommended steps include:1) educate yourself about financing options, 2) figure out how much you need to achieve your goals, 3) prepare your financial documents, and 4) write a clear business plan. 

  1. What are banks looking for when reviewing business loan applications?

Lenders are looking for a strong business plan, a healthy credit history, collateral to secure the loan, and a clear path to ROI for your business. 

  1. What financial documents are required for a business loan application?

Commonly required documents include your business’s balance sheet, income statement, cash flow statement, tax returns, bank statements, and a detailed business plan with financial projections. 

  1. What are the top ways to increase the chances of approval for a business loan? 

Improve your credit score, provide accurate and detailed financial information, tailor your application to the lender’s specific requirements, and clearly outline how you plan to use the loan and repay it. 

  1. What are the costs and fees for a small business loan?

Fees and costs will vary depending on who your lender is and whether they are a traditional bank, credit union, or online lender. It’s essential to understand these costs upfront and factor them into your financial planning. 

Frequent searches leading to this page
business loan approval, easy business loan approval, getting business loans, startup business loan

 

What’s shaping the UK economy in the next six months? – Mortgage Strategy

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With a new Labour government in place, an autumn budget and the US election fast approaching, the old suspects of inflation and tax rises still generating much debate, there’s plenty to discuss from an economic standpoint.

To help break down this complex economic landscape and explore its implications for the intermediary mortgage market, by popular demand, Will Hobbs, Head of Multi-Asset Wealth at Barclays UK Wealth Management, returns to share his insights, clarify key trends and offer expert analysis on what the future holds for the industry.
With his characteristic optimism and boundless enthusiasm, Will joins host and property expert Phil Spencer to chat about the UK’s position in the global market, the upcoming budget, technological advancements, the lasting impact of the pandemic, housing supply challenges, public sector wages, and why he remains positive about the UK’s economic outlook.
This detailed assessment provides brokers with valuable perspectives and essential indicators on how to navigate the current economic climate and what to expect in 2025.
This episode was recorded on 3rd September.

Mortgage Rates Could Fall Another Half Point Just from Market Normalization

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It’s been a pretty good year so far for mortgage rates, which topped out at around 8% last year.

The 30-year fixed is now priced about one full percentage point below its year ago levels, per Freddie Mac.

And when you consider the high of 7.79% seen in October 2023, is now over 150 basis points lower.

But the recent mortgage rate rally may still have some gas in the tank, especially with how disjointed the mortgage market got in recent years.

Simply getting spreads back to normal could result in another 50 basis points (.50%) or more of relief for mortgage rates going forward.

Forget the Fed, Focus on Spreads

10-year yield

There are a couple of reasons mortgage rates have improved over the past 11 months or so.

For one, 10-year treasury yields have drifted lower thanks to a cooler economy, which is a boost for bonds.

When demand for bonds increases, their price goes up and their yield (interest rate) goes down.

Long-term mortgage rates follow the direction of the 10-year yield because they have similar maturities (mortgages are often prepaid in a decade).

So if you want to track mortgage rates, the 10-year yield is a good place to start.

Anyway, inflation has cooled significantly in recent months thanks to monetary tightening from the Fed.

They raised rates 11 times since early 2022, which seemed to finally do the trick.

This pushed the 10-year yield down from nearly 5% in late October to about 3.65% today. That alone could explain a good chunk of the mortgage rate improvement seen since then.

But there has also been some narrowing of the “spread,” which is the premium MBS investors demand for the risk associated with a home loan vs. a government bond.

Remember, mortgages can fall into default or be prepaid at any time, whereas government bonds are a sure thing.

So consumers pay a premium for a mortgage relative to what that bond might be trading at. Typically, this spread is around 170 basis points above the 10-year yield.

In other words, if the 10-year is 4%, a 30-year fixed might be offered at around 5.75%. Lately, mortgage rate spreads have widened due to increased volatility and uncertainty.

In fact, the spread between the 10-year and 30-year fixed nearly doubled from its longer-term norm, meaning homeowners were stuck with a rate 3%+ higher.

For example, when the 10-year was around 5%, a 30-year fixed was priced around 8%.

Normalizing Spreads Could Drop Rates Another 60 Basis Points

New commentary from J.P. Morgan Economic Research argues that “primary mortgage rates could fall by as much as 60 bps over the next year” thanks to spread normalization alone.

And even more than that if the market prices in more Fed rate cuts.

They note that the primary/secondary spread — what a homeowner pays vs. the secondary mortgage rate (what mortgage-backed securities trade for on the secondary market) remains wide.

Head of Agency MBS Research at J.P. Morgan Nick Maciunas said if the yield curve re-steepens and volatility falls, mortgage rates could ease another 20 bps (0.20%).

In addition, if prepayment risk and duration adjustment fall back in line with their norms, spreads could compress another 20 to 30 bps.

Taken together, Maciunas says mortgage rates could improve another 60 basis points (0.60%).

If we consider the 30-year fixed was hovering around 6.35% when that research was released, the 30-year might fall to 5.75%.

But wait, there’s more. Aside from the mortgage market simply rebalancing itself, additional Fed rate cuts (due to a continued economic slowdown) could push rates even lower.

How Much Will the Fed Actually Cut Over the Next Year?

FFF prob

Remember, the Fed doesn’t set mortgage rates, but it does take cues from economic data.

At last glance, the CME FedWatch tool has the fed funds rate hitting a range of 2.75% to 3.00% by September 2025.

That’s 250 bps below current levels, of which some is “priced in” and some is not. There’s still a chance the Fed doesn’t cut that much.

However, if it becomes more apparent that rates are in fact too high and going to drop to those levels, the 10-year yield should continue to fall.

When we combine a lower 10-year yield with tighter spreads, we could see a 30-year fixed in the low 5s or even high 4s next year.

After all, if the 10-year yield slips to around 3% and the spreads return closer to their norm, if even a bit higher, you start to see a 30-year fixed dip below 5%.

Those who pay discount points at those levels might have the chance to go even lower, perhaps mid-to-low 4s and maybe, just maybe, something in the high 3s depending on loan scenario.

Just note this is all hypothetical and subject to change at any given time. Similar to the ride up for mortgage rates, there will be hiccups and unexpected twists and turns along the way.

And remember that lower mortgage rates don’t necessarily imply another housing boom, assuming higher unemployment offsets purchasing power and/or increases supply.

Colin Robertson
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Farewell: Fintech Nexus is shutting down

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1_healthytip
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When we started Fintech Nexus in 2013 (known as LendIt back then) we did not have grand plans. The idea was simply to gather the brain trust in the newly-emerging online lending industry so we could learn from each other, network, and do business. We figured we would work on a small event a few months a year and work on our other businesses the rest of the year.

It wasn’t long before the community started rallying to our side, and our events were filled with thousands of people. We took on the US, UK and Europe, then China and Latin America. This business proved to be an incredibly satisfying and engaging adventure. Between 2013 and 2023, we executed 31 large-scale events around the world, gathering tens of thousands of professionals to advance the fintech industry through high-value content and interactions.

Along the way, some external challenges, including the pandemic, caused us to take on additional financing — both debt and equity — and then in 2023 we suffered from the fintech downturn and had a financially very disappointing outcome to our big USA event. This led to the sale of our events business last June.

For the past year, we have been focused on our digital media business, which began in earnest during the pandemic. We wanted to see if we could make it a sustainable business without the events business to support it. Unfortunately, we have not been able to make this business profitable.

You may have seen the for-sale announcement we posted back in April. Even if we could not create a sustainable digital media business, we thought somebody else might want to take over. That did not pan out either, and so we have made the difficult decision to close the business down and file for bankruptcy.

While this is certainly not a happy outcome, we have had a fantastic ride and I know it has been the most stimulating and enjoyable decade of my career by far.

So, rather than dwell on the loss, we want to share some of the highlights from our journey.

Here is a farewell video, my partner and co-founder, Bo Brustkern and I recorded recently.

The Fintech Nexus retrospective

2013: A new event called LendIt, focused on online lending, in New York City was launched with 350 people.

2014: Moved the event to San Francisco where we hosted almost 1,000 people. Launched the first UK event with 500 people.

2015: Back to New York with Larry Summers as the big-name keynote: 2,500 people. Launched in China.

2016: The San Francisco event had 3,600 people and was our last U.S. event in a hotel. Launched the daily newsletter.

2017: Moved to the Javits Center in New York City with 5,000 people. Launched the LendIt Industry Awards.

2018: San Francisco at the Moscone Center with Michael Lewis as the keynote speaker. Moved beyond lending to other areas of fintech.

2019: Back to Moscone Center in San Francisco. Canceled the China event, started LatAm event in Miami.

2020: Pandemic. Yikes! Had to cancel the Javits Center event. Held USA, UK and LatAm events virtually.

2021: Another year of virtual events but in December we had a hybrid in-person/virtual event for LatAm in Miami.

2022: Back to in-person events! So exciting to be back in New York, London and Miami. Rebranded to Fintech Nexus.

2023: The 11th annual Fintech Nexus USA event in New York City would be our last. We sold the events business to Fintech Meetup.

2024: Fintech Nexus shuts down after an 11-year run.

It has been a privilege to be at the helm of LendIt / Fintech Nexus. So many incredible highlights as we look back. But what was always most gratifying was when I would talk with people who said they first met at LendIt and they have a thriving partnership. I have heard that story hundreds of times over the past decade.

We could not have achieved everything we did without the support of the fintech community. We have taken this seriously from day one.

I would like to thank the tens of thousands of people who have attended our events, both in-person and digital, over the years, including the thousands of speakers. Your learnings and new business connections helped drive the industry forward.

I already miss the excitement of walking on stage on the opening morning of an event, full of adrenaline.

The podcast will continue

My favorite part of what I do right now is producing my podcast, Fintech One-on-One. The podcast predates Fintech Nexus and will continue as normal, with a new episode coming out every Thursday afternoon. I am about to cross episode 500, and I intend to keep doing this for the foreseeable future. The podcast now has a new home on its own website, and it will continue to appear in your podcast feed as usual.

The Website

The website will also remain online for at least the next few months, subject to the judgment of the Chapter 7 Bankruptcy Trustee. We know it is a great resource for tens of thousands of fintech enthusiasts. But the daily newsletter that we have produced since 2016 will end with today’s issue.

The Webinars

There will be no more Fintech Nexus webinars, although our YouTube channel should continue to live on for many years with thousands of hours of great content.

The next chapter

What happens now? Well, a bankruptcy trustee will be taking over and looking to sell our assets.

The Fintech Nexus team are all free agents now.

I have started to take on a couple of new fintech projects. In the coming months, you will see me at a handful of events (I love a good fintech conference). After a couple of summer trips, I will have the bandwidth to take on more projects.

If you are interested in reaching out to me or others on the Fintech Nexus team, we can be reached here:

The fintech industry will continue to thrive

We would like to think we have played a meaningful role in establishing a thriving fintech industry. For us, this has always been a labor of love. The fintech space is doing such interesting and important work, and it has been the opportunity of a lifetime to be near the center of it all.

We have matured as an industry and collectively we are now a driving force in financial services. Let’s all continue the good fight.

  • Peter RentonPeter Renton

    Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.

Individual vs. Group Disability Insurance

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1_healthytip
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Group Disability Insurance

Here’s a closer look at group disability insurance, including what it is, its benefits, and its drawbacks.

What Is a Group Disability Insurance Policy?

Group insurance is provided through a plan sponsor and covers a group of people. Employers usually offer these insurance plans to employees. However, you could be part of a group insurance plan through another avenue, such as a professional organization of which you’re a member.

What Are the Benefits of Group Disability Insurance?

  • Easy Enrollment: In most cases, it’s easy to sign up and qualify for these plans, even if you have a pre-existing condition. Additionally, paperwork is limited because coverage is pre-determined by the sponsor’s group plan.
  • Affordable: Your sponsor will likely pay all or most of your premiums, so these policies are a low-cost option. 

What Are the Disadvantages of Group Disability Insurance?

  • Less Coverage Control: You don’t have a lot of control or options when it comes to your group coverage. Your employer handles any plan alterations or cancellations. 
  • Definition of Income: Group disability insurance plans cover a portion of your income. However, your insurance may exclude certain forms of income, such as bonuses and commissions.
  • Definition of Disability: Group plans have limited definitions of disability. For example, you may need to be considered completely disabled to receive benefits. Additionally, you may not be regarded as disabled if you’re deemed able to perform work in any other occupation.
  • Payout Reductions: Group policies have language including “Deductible Source of Income,” which is a list of potential other sources of income you could receive while disabled. If you receive any of these items, it will reduce your group payout accordingly. This includes items such as Social Security Benefits, Workers’ Compensation, lawsuit settlements, any other pay while disabled, etc.
  • Non-Portable: You’ll experience a lapse in coverage if you change employers. If your new employer doesn’t provide group disability insurance, you would need to start investigating individual disability insurance plans, during a time where your health may have changed affecting coverage options.
  •  Taxability: Your benefits are taxable if your employer pays for your group disability insurance.

Let’s go over individual disability insurance, including what it is, its advantages, and its drawbacks.

What Makes Individual Disability Insurance Different?

Individual disability insurance works similarly to group insurance plans, but these policies are under your control and unaffected by your employer. They stick with you no matter your career changes, and you determine every facet of your plan. 

Let’s take a closer look at individual vs. group disability insurance plans and how they compare. 

What Are the Advantages of Individual Disability Insurance?

  1. Portability: Your policy will continue to provide coverage, even if you change jobs or are between jobs.
  2. Tax-Free: These plans are non-taxable, so your benefits are yours to keep.
  3. No Payout Reductions: If you collect lawsuit settlements, Social Security Benefits, Workers’ Compensation, or any other pay, your claim payouts will not be reduced.
  4. Definition of Total Disability – True Own Occupation: The definition of total disability will consider you totally disabled if you are no longer able to perform the substantial duties of your occupation, or specialty if you are a medical professional. With True Own Occupation, you’ll be able to work in another occupation or specialty without your claims being affected, as long as you cannot work in your own occupation/specialty.
  5. Customizable: Many facets of your individual disability insurance plan can be customized to your needs and wants, including the benefit amount in your policy, the definition of disability, and riders. For example, you could select the length of time you need to be disabled for in order to begin claims (elimination period), or the length of time your benefits will pay out for (benefit period). 

What Are the Disadvantages of Individual Disability Insurance? 

  • Higher Premiums: Since you receive far superior benefits than with group plans, your insurance premiums will be higher. Additionally, coverage options, age, and health will determine your premiums.
  • More Steps to Enroll: You’ll face more paperwork, medical and financial underwriting, and decision-making when enrolling in an individual disability insurance plan. You may also be required to complete a medical exam.
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