A Loan Versus A Sale

Loan and sale The example of fraudulent transaction between Enron and Merill Lynch Bank proved to be a good example of how to use a loan for promotion. In fact, they are not sold technically. In 2004, following the Nigerian barge deal, Enron sold a power generation barge to Merrill Lynch. Company executives recorded a huge sale, which turned out to be a loan rather than a sale, and since the Enron was not actually acquired from the transaction, the US Securities and Exchange Commission conducted a survey in 2004. * Inappropriate reduction of cost or market (LCM) valuation of loans intended for sale: general industry practice of LCM assessment of loans intended for sale is group-by-category lending-run or grouping and monitoring bad loans. With this approach, the mortgage company can properly perform the valuation and monitor the performance of the loan. However, as New Century Financial Corporation organized the two types of performance loans and bad debts into one group, the new cen tury loans held for sale were overvalued and did not make it, so there would be a difference in actual net income . In 2010, Colorado Province undertakes a new loan, with payment date loan reduction, loan cost reduction, six months extension of minimum loan period, ban on sale of incidental products, proportional invoice reimbursement Reduced motivation. According to the responsible loan center, the first minute has been repaid Market lenders constitute a specific subset of private credits and have received a lot of attention recently - the clear feature of this type of lender is that they are offering a selling loan through the online platform . These platforms attract interested borrowers, provide underwriting, set the price of the loan based on the perceived risk level (set the interest rate) and transfer the entire loan to one or more investors throughout the market I will sell it. Rental clubs are typical examples of peer-to-peer (P2P) loans and alternate loans / market loans. Prosperity is very similar and competitive market. Though they all focus on consumer debt, SoFi Common Bond is focusing on student debt, although other people like Ondeck Kabbage focus on SME debt. A Loan Versus A Sale Loan and sale The example of fraudulent transaction between Enron and Merill Lynch Bank proved to be a good example of how to use a loan for promotion. In fact, they are not sold technically. In 2004, following the Nigerian barge deal, Enron sold a power generation barge to Merrill Lynch. Company executives recorded a huge sale, which turned out to be a loan rather than a sale, and since the Enron was not actually acquired from the transaction, the US Securities and Exchange Commission conducted a survey in 2004. * Inappropriate reduction of cost or market (LCM) valuation of loans intended for sale: general industry practice of LCM assessment of loans intended for sale is group-by-category lending-run or grouping and monitoring bad loans. With this approach, the mortgage company can properly perform the valuation and monitor the performance of the loan. However, as New Century Financial Corporation organized the two types of performance loans and bad debts into one group, the new cen tury loans held for sale were overvalued and did not make it, so there would be a difference in actual net income . In 2010, Colorado Province undertakes a new loan, with payment date loan reduction, loan cost reduction, six months extension of minimum loan period, ban on sale of incidental products, proportional invoice reimbursement Reduced motivation. According to the responsible loan center, the first minute has been repaid Market lenders constitute a specific subset of private credits and have received a lot of attention recently - the clear feature of this type of lender is that they are offering a selling loan through the online platform . These platforms attract interested borrowers, provide underwriting, set the price of the loan based on the perceived risk level (set the interest rate) and transfer the entire loan to one or more investors throughout the market I will sell it. Rental clubs are typical examples of peer-to-peer (P2P) loans and alternate loans / market loans. Prosperity is very similar and competitive market. Though they all focus on consumer debt, SoFi Common Bond is focusing on student debt, although other people like Ondeck Kabbage focus on SME debt.

Sources of Funds case Essay Example | Topics and Well Written Essays - 500 words

Sources of Funds case - Essay Example Equity can be generated internally as retained earnings or generated externally generated as common share capital. A company may choose to use its retained earnings to expand its operations. This is because the cost of retained earnings is relatively lower compared to the cost of common share capital. The major drawbacks of this source of finance are that it is usually inadequate, and its use can easily expose a company to liquidity problems. Consequently, a firm can source equity through issuing of common shares. This source of funds confers several advantages. The first advantage is that this form of financing is a permanent source of capital because common shares have no maturity date. The company does not have any liability for cash outflows linked with the redemption of the common shares. This facilitates financing of long term projects. Secondly use of equity lowers the gearing level hence a company has a broader borrowing capacity. Thirdly, the shareholders may provide valuabl e ideas to the company’s operations. However, this method faces various drawbacks. First the floatation costs are higher than those of debt (Pratt, 2010). Secondly, equity is only accessible to companies that have fulfilled the capital markets authority requirements. Thirdly, it can lead to dilution of ownership of control of the firm by the shareholders. The second method of raising capital is debt capital. This form of capital can be in the form of debentures and corporate bonds. This source of funds confers several advantages. Firstly, the floatation costs are lower than those of common share capital. Secondly, since the interest on debt is tax allowable then the company enjoys a tax saving. This method of raising capital also faces various drawbacks. Default in payment of principal and interest can force a company into liquidation. Secondly, Providers of debt capital impose conditions, and many restrictive covenants hence it

Property Law Essay Example | Topics and Well Written Essays - 2000 words - 4

Property Law - Essay Example rchase; Dave has an equitable interest in the leasehold of the garage for the duration of ten years, and; Max has at least a vested interest in the property because he has been living in its grounds during those times when Bob was not around. The circumstances under which Peter bought the property seemingly fall squarely with the textbook definition of the term â€Å"bona fide purchaser for value without notice.† A bona fide purchaser for value without notice is defined as a buyer of the land for a considerable sum of money without knowledge of existing equitable interests over the land. Title at law is enforceable against the whole world. â€Å"A person who is such a bona fide purchaser for value and without notice is known as ‘equity’s darling’, and will take a legal estate free from equitable interests.1 In other words, a bona fide purchaser for value with legal title and without notice therefore has a right against everyone including equitable titles and interests. Bob contributed to the purchase price in the amount of GBP 50, 000 and took up residence within the Wimbledon Property, first in the main house and later, when his relationship with Vicky went sour, converted the barn to a residential building and continued his residency there. His clothes and his other things are left in the converted barn. Albeit that he now lives during the weekdays with a girlfriend in the city, he showed no intention of abandoning his stay in Wimbledon. As a matter of fact, he allowed his brother Max to keep house during the times he was away. On the basis of his contribution to the purchase of the house, Bob has acquired an equitable right over the property, notwithstanding that this was an amount not so huge vis-à  -vis Vicky’s GBP 400.000. Prior to the present land registration law viz., The Land Registration Act of 2002, there was no need to register equitable interests, only ownership over the land. As discussed above, however, even equitable rights can be defeated.