The first thing that is evident is that there is less choice available when looking for finance. This is because several of the banks, which were actively lending to foreign investors have stopped doing so, these would include BBVA and BCP. That said, there are still other banks that remain in the market, just less of them.The banks that remain however have more stringent terms for their lending. Products, which were available at 75% loan to value in 2007, are now reduced to 60%. Banks are looking for high net worth clients and interest rates are far higher. Lenders are seeking to improve the quality of their lending books and this is reflected in their policy.With certain lenders, it used to be the case that if you managed to negotiate a price well below the market value, you could achieve a 100% loan against the price, as the lenders would allow the loan percentage to be a reflection of the valuation. This is no longer the case, far more conservative lending policy now no longer allows this and even if you get a discount you’ll be restricted to a percentage of the purchase price.Although these changes to lending criteria have restricted the availability of lending, there has been a positive side to this. The market is now far more realistically priced that it was 4 years ago, this is reflected in the valuations that are coming back from surveyors. Judith Price at Caixa Geral de Depositos told me last week “in my experience valuations are all coming in at purchase price or slightly above”. Realism in any market is a good thing as it leads to stability and confidence.There are of course still over riding factors which could destabilise everything, you only have to look eastwards to Greece to see where these originate. In September there were some purchases that fell away over the Greek problems and the IMF moving in. The cost of money went up and these increases are passed on to the end borrower.As far as actual development finance is concerned, the picture is even bleaker. Weak demand and falling prices have meant that there are many projects already at a stand still and lenders are of the view “why lend on more?”So are there any good bits of news and what should investors consider?To start with, variable rate loans in Portugal are usually linked to Euribor, When looking at 6 month Euribor, in March 2011 it stood at 1.352%, in September 1.755% but now stands at 1.505%, so it is possible that barring other financial shocks, rates may have passed their peak.Bank loan margins are still high though, because of the cost of money, so it may be better to consider a fixed rate product for the next few years.Portugal still offers good value for money and with Sterling’s recent strengthening against the Euro this has again improved. Investors should also consider whether they could raise finance in their own country at a cheaper rate than those available in Portugal, although this needs to be weighed against having Euro debt against a Euro based property if their own currency is outside the Euro zone.Remember that finance is more difficult to obtain across Europe. Portugal remains a wonderful country with far better value in the property market, than a few years ago. Whilst the economy still has a large debt overhang, the government has taken strong steps to try and bring this under control.
S&P 500 Rallies As U.S. Dollar Pulls Back Towards Weekly Lows
Key Insights
The strong pullback in the U.S. dollar provided significant support to stocks.
Treasury yields have pulled back after touching new highs, which served as an additional positive catalyst for S&P 500.
A move above 3730 will push S&P 500 towards the resistance level at 3760.
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Pfizer Rallies After Announcing A Huge Price Hike For Its COVID-19 Vaccines
S&P 500 is currently trying to settle above 3730 as traders’ appetite for risk is growing. The U.S. dollar has recently gained strong downside momentum as the BoJ intervened to stop the rally in USD/JPY. Weaker U.S. dollar is bullish for stocks as it increases profits of multinational companies and makes U.S. equities cheaper for foreign investors.
The leading oil services company Schlumberger is up by 9% after beating analyst estimates on both earnings and revenue. Schlumberger’s peers Baker Hughes and Halliburton have also enjoyed strong support today.
Vaccine makers Pfizer and Moderna gained strong upside momentum after Pfizer announced that it will raise the price of its coronavirus vaccine to $110 – $130 per shot.
Biggest losers today include Verizon and Twitter. Verizon is down by 5% despite beating analyst estimates on both earnings and revenue. Subscriber numbers missed estimates, and traders pushed the stock to multi-year lows.
Twitter stock moved towards the $50 level as the U.S. may conduct a security review of Musk’s purchase of the company.
From a big picture point of view, today’s rebound is broad, and most market segments are moving higher. Treasury yields have started to move lower after testing new highs, providing additional support to S&P 500. It looks that some traders are ready to bet that Fed will be less hawkish than previously expected.
S&P 500 Tests Resistance At 3730
S&P 500 has recently managed to get above the 20 EMA and is trying to settle above the resistance at 3730. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
If S&P 500 manages to settle above 3730, it will head towards the next resistance level at 3760. A successful test of this level will push S&P 500 towards the next resistance at October highs at 3805. The 50 EMA is located in the nearby, so S&P 500 will likely face strong resistance above the 3800 level.
On the support side, the previous resistance at 3700 will likely serve as the first support level for S&P 500. In case S&P 500 declines below this level, it will move towards the next support level at 3675. A move below 3675 will push S&P 500 towards the support at 3640.
Business Loans In Canada: Financing Solutions Via Alternative Finance & Traditional Funding
Business loans and finance for a business just may have gotten good again? The pursuit of credit and funding of cash flow solutions for your business often seems like an eternal challenge, even in the best of times, let alone any industry or economic crisis. Let’s dig in.
Since the 2008 financial crisis there’s been a lot of change in finance options from lenders for corporate loans. Canadian business owners and financial managers have excess from everything from peer-to-peer company loans, varied alternative finance solutions, as well of course as the traditional financing offered by Canadian chartered banks.
Those online business loans referenced above are popular and arose out of the merchant cash advance programs in the United States. Loans are based on a percentage of your annual sales, typically in the 15-20% range. The loans are certainly expensive but are viewed as easy to obtain by many small businesses, including retailers who sell on a cash or credit card basis.
Depending on your firm’s circumstances and your ability to truly understand the different choices available to firms searching for SME COMMERCIAL FINANCE options. Those small to medium sized companies ( the definition of ‘ small business ‘ certainly varies as to what is small – often defined as businesses with less than 500 employees! )
How then do we create our road map for external financing techniques and solutions? A simpler way to look at it is to categorize these different financing options under:
Debt / Loans
Asset Based Financing
Alternative Hybrid type solutions
Many top experts maintain that the alternative financing solutions currently available to your firm, in fact are on par with Canadian chartered bank financing when it comes to a full spectrum of funding. The alternative lender is typically a private commercial finance company with a niche in one of the various asset finance areas
If there is one significant trend that’s ‘ sticking ‘it’s Asset Based Finance. The ability of firms to obtain funding via assets such as accounts receivable, inventory and fixed assets with no major emphasis on balance sheet structure and profits and cash flow ( those three elements drive bank financing approval in no small measure ) is the key to success in ABL ( Asset Based Lending ).
Factoring, aka ‘ Receivable Finance ‘ is the other huge driver in trade finance in Canada. In some cases, it’s the only way for firms to be able to sell and finance clients in other geographies/countries.
The rise of ‘ online finance ‘ also can’t be diminished. Whether it’s accessing ‘ crowdfunding’ or sourcing working capital term loans, the technological pace continues at what seems a feverish pace. One only has to read a business daily such as the Globe & Mail or Financial Post to understand the challenge of small business accessing business capital.
Business owners/financial mgrs often find their company at a ‘ turning point ‘ in their history – that time when financing is needed or opportunities and risks can’t be taken. While putting or getting new equity in the business is often impossible, the reality is that the majority of businesses with SME commercial finance needs aren’t, shall we say, ‘ suited’ to this type of funding and capital raising. Business loan interest rates vary with non-traditional financing but offer more flexibility and ease of access to capital.
We’re also the first to remind clients that they should not forget govt solutions in business capital. Two of the best programs are the GovernmentSmall Business Loan Canada (maximum availability = $ 1,000,000.00) as well as the SR&ED program which allows business owners to recapture R&D capital costs. Sred credits can also be financed once they are filed.
Those latter two finance alternatives are often very well suited to business start up loans. We should not forget that asset finance, often called ‘ ABL ‘ by those Bay Street guys, can even be used as a loan to buy a business.
If you’re looking to get the right balance of liquidity and risk coupled with the flexibility to grow your business seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist you with your funding needs.