Easily one of the costliest parts of lending are defaults. In short, lenders look to avoid defaults at all costs, since they can be crippling. Defaults are when borrowers, at some point in the loan’s life, cease making their payments. For this post, the reasons why are immaterial – at the end of the day, all that matters… Read More »
Next up in our series of how lenders arrive at interest rates is looking at the true cost of funds. It could also be entitled “How much does money cost?” because, in essence, that’s exactly what it is. One thing that’s helpful in understanding this is to look at money lending as an investment for the lender. If… Read More »
My last blog outlined a situation where a company buys equipment, doesn’t like it, and decides not to make their finance payments. Nobody wins in that scenario (and the company withholding payment is always in the wrong, as per finance agreements). In fact, this situation can be so dire, equipment financing companies like mine have learned to look… Read More »