Eastern Bank launches SME banking

Eastern Bank Ltd (EBL) launched small and medium enterprises (SME) banking on Thursday.


The bank has categorised the SME loan into two products--'Asha' and 'Puji', says a press release.


'Asha' offers Tk two lakh to Tk 10 lakh loan, which is repayable in three to 24 months in equal instalments. A sole proprietorship business, partnership firm or a private company operating successfully for minimum two years can apply for it, which does not need a collateral security.


For 'Puji', the loan amount ranges from Tk five lakh to Tk 50 lakh, which is repayable in 12 to 36 months. The minimum operation period of the business organisation to get this loan is three years.


The EBL's SME banking facility will be available at nine SME centers in Dhaka, Chittagong, Sylhet, Bogra and Khulna.


Muhammad A Rumee Ali, deputy governor of Bangladesh Bank, formally launched the two products at a function where K Mahmood Sattar, EBL managing director and CEO, Ali Reza Iftekhar, additional managing director, and Kamal Talukder, head of SME banking of the EBL, among others, were present.

City Bank launches SME loan for women entrepreneurs

The City Bank Monday launched a new SME loan product especially for promoting country's women entrepreneurs.

Managing Director and CEO of the commercial bank K Mahmood Sattar officially launched the loan package styled 'City Nokshi' at a city hotel.

Speaking on the occasion, Mr Sattar said the new loan product at 10 per cent interest rate in line with the guidelines of Bangladesh Bank is only available for the women entrepreneurs of the country.

He said the product aimed at promoting the prospective women entrepreneurs so that they can be sensible partners of the women community in business as well as continuing their active participation in social development.

This package will be available at all SME outlets of the bank and clients will be able to apply for loan ranging between Tk 0.1 million and Tk 2.5 million subject to completion of easy and soft conditions, City Bank CEO said.

Head of SME Banking Badrudduza said this package would provide four types of SME loans such as Muldhan, Sheba, Shulov and Munafa. The collateral-free loan is payable within 18 months with Tk 6005.71 monthly installment and partially collateralised loan within 40 months with Tk 2950.08 monthly installment.

Speaking as chief guest, Women Entrepreneurs Association of Bangladesh President Rehana Rahman said collateral-free loan is a good opportunity for women entrepreneurs of the country.

Mrs Kabita Begum, proprietor of K B International, received the first Nokshi loan worth Tk 2.5 million from the CEO of the bank.

Bangladeshi nationals having one and a half years' of experience in any legitimate business supported by trade licence and aged between 24 and 50 years are eligible to apply for the loan.

Deputy Managing Director (Business) Sohail R K Hossain and Head of Brand and Marketing Aftab Mahmood Khurshid, among others, were present on the occasion.

SME Loan - Standard Chartered Bank

Loan Against Property

At Standard Chartered we strive to meet your needs in a competitive and dynamic business environment. We understand that, as an SME, you require quick access to cash, and the flexibility to leverage your assets to fuel your business growth.
Standard Chartered’s Loan Against Property provides the liquidity you need to grow your business or meet cash flow requirements. The loan enables you to leverage your property to obtain financing.

Features

Loan against property is very flexible and is designed to meet the different financial needs of your business. Want to expand your business leveraging on your existing property? With Loan Against Property you can undertake long term investments for expansion. In the process Loan Against Property also enables you to build up business equity by repaying the loan in monthly installments.

• Maximum Loan: BDT 28,000,000 (taka two crore eighty lac) only
• Minimum Loan: BDT 1,400,000 (taka fourteen lac) only
• Interest Rate: 16% per annum
• Tenor: 3 Years - 10 Years (i.e. 36 to 120 EMIs payments)
• Maximum % of loan amount against market value of the property:
  For Commercial Property 60% of property’s current market value
  For Residential Property 70% of property’s current market value

Following table indicates the monthly repayment amount or the equal monthly installments (EMI) is given below:

Eligibility
To be eligible to apply for this loan, the applicant must fulfill the following criteria:

• At least 3 years of experience in same business
• A minimum annual turnover of BDT 7,000,000 (Taka Seventy Lac) only

Property Documentation Requirement:

1. For Government/Leasehold Land:
   
   
   
   
   
   
   
   1. Lease Deed/ Ownership Deed (photocopy)
   2. Baya Deed for at least 25 years, if any (photocopy)
   3. Development Agreement/ Joint Venture Agreement with the land owner/ developer
   4. Power of Attorney (if any)
   5. Power of Attorney Acceptance Letter from lessor of the property
   6. Mutation (any one)
      
      
      
      
      
      
      
      1. Mutation Letter from RAJUK/ CDA
      2. Mutation Letter from National Housing Authority (NHA)
      3. Mutation Letter from Ministry of Works
      
      
      
      
      
      
   7. Duplicate Carbon Receipt (DCR) with Mutation Order Sheet
   8. Up to date Municipality Tax Receipt
   9. Up to date Land Tax Receipt
   10. Non-Encumbrance Certificate (NEC)
   11. Approved Plan/ Layout Plan and Approval Letter by RAJUK/CDA/Concerned Authority
   12. Any other documents as advised by the bank’s lawyer
   
   
   
   
   
   
   
   
2. For Private/Freehold Land:
   
   
   
   
   
   
   
   1. Ownership Deed (photocopy)
   2. Baya Deed for atleast 25 years, if any (photocopy)
   3. Development Agreement/ Joint Venture Agreement with the land owner/ developer
   4. Power of attorney (if any)
   5. Recent Survey Report (i.e. Math Parcha Duly attested)
   6. CS, SA, RS Parcha (PS, BS, RS Parcha- only applicable for Chittagong)
   7. Mutation Parcha and Mutation Proposal Sheet
   8. Duplicate Carbon Receipt (DCR) with Mutation Order Sheet
   9. Up to date Municipality Tax Receipt
   10. Up to date Land Tax Receipt
   11. Non-Encumbrance Certificate (NEC)
   12. Approved Plan/ Layout Plan and Approval Letter by RAJUK/ CDA/ Concerned Authority
   13. Any other documents as advised by the bank’s lawyer
   
   
   
   
   
   
   
   

Please note that the above requirements are not exhaustive and the bank may require further documentation for credit assessment on a case to case basis.

Charges

• Loan Processing Fee: 1.5% of the approved amount
• Valuation Fee: BDT 5000 per property
• Legal fee: BDT 7000 property
• Early Settlement Fee: 5% on outstanding amount if repaid at any given time before maturity of the loan
• VAT and Stamp Charges: All charges and fees are subject to 15% VAT, to be paid by the customer. Stamp charge will be at actual to be paid by the customer.

Please note both valuation and legal fees are non-refundable and inclusive of processing fee of 1.5%+VAT of the loan. Both fees will be discounted from the said processing fee at the time of loan disbursement if the loan is approved by the bank, the facility is availed by the customer and the property(s) are mortgaged in favor of the Bank.

Frequently Asked Questions (FAQs)

Q    Who is Eligible?
A    Businesses (private limited, partnerships and sole proprietorships) with atleast 3 years of business operations.
Q    Do I need a minimum sales turnover?
A     Yes, your business requires a minimum sales turnover of BDT 7,000,000 (Tk. Seventy Lac only) to be eligible to apply for the loan.
Q     What is the maximum loan amount that I can avail?
A     You can avail up to BDT 28 million (Taka 28,000,000 only) provided your income supports the monthly repayments, the loan amount does not exceed the 60% or 70% (as applicable) of your property’s current market value and other conditions/requirements are met as per bank criteria.
Q     What types of properties are eligible as securities for this type of loan?
A     You can provide both your residential or commercial properties as securities for this loan; except for vacant land. All these properties must be located within the Dhaka or Chittagong metropolitan area. The eligible commercial properties are shops and office spaces.
Q     What is the repayment mechanism for Loan Against Property?
A     Loan Against Property is an installment based term loan, which gives you the peace of mind of knowing what your fixed monthly repayments (EMIs) are going to be. It also helps your business to build up its equity We provide the maximum flexibility to repay the loan at your convenience. You can choose a tenor from 36 months to 120 months (3 Years to 10 Years).
Q     I have a residential/commercial property mortgaged with another bank; can I still take up loan against property?
A      Yes, if you have an existing mortgaged property with another bank, you can take up Loan Against Property where we will re-finance your mortgage. In such cases your existing bank must release the mortgage and handover the mortgage to us. The loan outstanding (with another bank) may be settled by you or taken over by us, depending on the nature of the facility.

Auto Loan - Standard Chartered Bank, bangladesh

Auto Loan

With Standard Chartered Auto Loan, it is easier than ever to buy the car of your dreams. Our Auto Loan Scheme offers you a flexible and affordable loan with easy repayment options, all wrapped in a very convenient package. You can purchase new, reconditioned, or second-hand cars with Standard Chartered Auto Loan.

Features:

• Loan amount up to 90% of vehicle value
• Maximum loan amount up to BDT 2 million
• Longest loan tenor up to 60 months
• Competitive interest rates and absolutely transparent fees & charges
• Fast Loan approval process
• Options for early settlement and partial pre-payment of the loan
• Loan available for reconditioned / second-hand vehicles up to 6 years old from the year of manufacture
• Maximum allowable age of the vehicle at the end of the loan tenor is 10 years in case of Toyota-manufactured vehicles, and 8 years in case of other brands
• Who can apply?: Salaried professionals / Businesspersons / Landlord or landlady / Self-employed Individuals
• Minimum age of applicant: 23 years
• Maximum age of applicant: 65 years
• Work Experience: Minimum 1-year service experience for salaried executives & 3 years’ experience for businesspersons or self-employed individuals
• Nationality: Bangladeshi
• Minimum net income: BDT 32,500 per month

Convenient:

At Standard Chartered, we believe in delivering our services to customers’ doorsteps. Just call us at the 24-hour Contact Centre and our trained sales representatives will visit you at your convenience to brief you on Auto Loan. They will help you understand the loan features and the detailed application process, and can even help you choose your dream car from some of the most reputed car dealers in the city. You can also visit any of our branches for more information.
http://www.carhousebd.com/showroom/

Car Loan - BRAC Bank

Why toy with your dreams when you can own one', BRAC Bank Car Loan can stop your dreaming and Start driving Whether you want to purchase a brand new car or a reconditioned one, we have the most customer-friendly car loan scheme available for you.

Eligibility

• Both salaried executives and business persons
• Age between 21 at the time of application to 60 at the time of maturity
• Minimum monthly income BDT 25,000
• Length of service/Age of business: Minimum 2 years

For any banking needs please call 24 hour Phone Banking: 01819 230000 or e-mail us at enquiry@bracbank.com

Car Loan - IDLC

Owning car is no longer a luxury anymore; rather it is a useful investment that improves your quality of life. The family car is increasingly becoming a vital part of our everyday life. With IDLC Car Loan, you can own your own car and add excitement to your life.

BENEFITS

• Loan sanction within 72 hours of application receipt*
• An opportunity to finance both brand new and re-conditioned cars
• No security
• No personal guarantee
• Competitive interest rate
• Expert advice on car market conditions
• Dedicated and supportive service both before and after disbursement
• Partial or full prepayment option with minimum charges
* Provided that all required documents have been provided to IDLC

ELIGIBILITY

• You are eligible if you are:
• A salaried executive or professional or a businessman
• Between 22 and 60 years of age
• Minimum monthly income of Tk. 25,000/- (this will include income of spouse in case of joint application)
• A minimum of two (2) years of service
• A resident of Dhaka or Chittagong

LOAN AMOUNT

We provide maximum assistance to fulfill your requirement. We are ready to finance both brand new and re-conditioned cars. You can avail car loan from Tk 200,000/- to Tk. 4,000,000/- or 70% of the value of your car (including registration cost), whichever is lower. If you are ready to provide 50% of the car value as cash deposit with IDLC, you will enjoy a special rate for your entire car loan.

PREPAYMENT TERMS

With our attractive car loan package, you are able to repay the loan according to your convenience. Choose a maximum of 60 months to repay the loan for your brand new car or re-conditioned car

DOCUMENTATION REQUIRED

Employed

• One recent copy of passport size photo, National ID card and Bio data
• Application form (properly filled up)
• Employment confirmation form (properly filled up)
• Price quotation from the vendor
• CIB undertaking form (properly filled up)
• Latest salary slip/salary certificate
• Personal bank statements for last 12 months
• Rental income/other income documents
• Documents supporting other fixed assets
• Documents supporting liquid assets

Self Employed

• One recent copy of passport size photo, National ID card and Bio data
• Tax assessment paper for last 3 years
• Profit & Loss account and Balance sheet of business for last 3 years
• Company bank statements for last....months
• Memorandum & Articles of Association with form Xll of the company
• Trade license
• Price quotation from the vendor

Non Resident Bangladeshi (NRBs)

• One recent copy of passport size photo and Bio data
• Photocopy of the passport with evidence of arrival of port of entry, visa stamped pages
• Employment contract
• Residency permit/work permit
• Latest work permit
• Overseas bank statements for last 12 months months
• Tax papers for last three years
• Utility bills copy

Car loan - HSBC

So you have found your dream car that you have always wanted. Now comes the difficult part - arranging for the funding. You approach banks and financial companies who want guarantees and securities against loans and you feel your dream slipping away. Now with a car loan from HSBC, you can make your dream come true.

Features

• No personal guarantee or cash security
• Wide range of loan amounts -
    - Minimum: BDT100,000
    - Maximum: 75% of brand new car value or 70% of reconditioned car value (up to a maximum of BDT2,000,000)*
• Competitive interest rates
• Interest is calculated on monthly reducing balance
• Low processing fees
• Flexible repayment schedule of 12, 24, 36, 48 or 60 months

*The loan amount does not cover registration, insurance and other costs. 

Eligibility

• Age: At least 23 years
• Professional Experience:
     - Salaried: Employed for at least two years by a well-reputed company
     - Self-employed: Business establishment for at least two years (with adequate proof)
• Minimum Monthly Income:
     - Salaried: BDT 20,000
     - Self Employed: BDT 50,000

Requirements

• Manufacturing year of the car must be within 5 years of application date
• The car must be covered under a comprehensive car insurance policy
• Documents stated in the Application Form

*All of the above conditions are subject to change
*Other Conditions Apply
*Last updated in March, 2009

Need to know more

• Call now on 01199 88LOAN (5626), 01199 88HSBC (4722)

 

 

 

 

 

Car Loan - Dhaka Bank

Car Loan is a term financing facility to individuals to aid them in their pursuit of have a car of their dream. The facility becomes affordable to the clients as the repayment is done through fixed installment s commonly known as EMI (equal monthly installment) across the facility period. Depending on the size and purpose of the loan, the number of installments varies from 12 to 60 months. In case of brand new cars the loan tenure will be maximum 72 months.
Targeted market
The target market for personal loan will mainly comprise of following category
1. Salaried employees of institutions in cities where Dhaka Bank Operates.
2. Professionals who are self employed and have at-least 3 years of independent practice in the area of profession.
3. Businessmen who are permanent residents of Dhaka, Chittagong, Sylhet metropolis and where Dhaka Bank Operates with at least 3 years of continued operation in the line of business.
Restrictions and client eligibility
1. Loans are restricted to Bangladeshi nationals falling in the categories mentioned below. The minimum age for any borrower is 21 years and the maximum age is 57 years with a minimum verified Gross Family Monthly Income of BDT 10,000.

Personal loan insurance

A personal loan is a great opportunity to have the funds to consolidate your debt, take a college course, repair your car, or even take a vacation. Personal loans can be secured or unsecured. Secured loans are much riskier because they involve providing the lender with collateral to ensure repayment of the loan. If you fail to meet that repayment, the lender will legally own your property, vehicle, or what ever asset you used to secure the loan.
Personal loans offer plenty of opportunity for individuals to improve their overall financial situation if the funds are used in conjunction with good money management skills. However, we all know things take place in life that we have no control over including death of a income source for our household, losing employment, or medical issues. These circumstances can all affect our ability to repay a personal loan. If that loan is secured, then you will lose your asset tied to it as well. To protect yourself from such horrible possibilities, consider purchasing personal loan insurance.
Personal loan insurance is the best protection you can have for repayment when the plan you outlined to cover the loan develops unexpected bumps in the road. The cost of such insurance varies, and is generally determined by the outstanding balance of your personal loan. The type of personal loan insurance coverage you choose will also affect the premium. However, this insurance can offer peace of mind for borrowers, especially those who have a secured personal loan.
There are three types of personal loan insurance coverage to choose from. The specific dollar amounts of coverage will depend on the laws in your State and the dollar amount of your loan. It is important to discuss personal loan insurance with any lender you are considering pursuing a personal loan with.
Personal loan death insurance will pay up to a certain dollar amount in the event of the death of one of the individuals on the loan. In the event that the personal loan only had one persons name on it, then the loan balance will be paid in full up to the maximum dollar amount. Most personal loans only have a maximum loan amount of £15,000 however it is not uncommon for individuals to take out more than one personal loan.
Disability Plus personal loan coverage is the coverage most often purchased for personal loan protection. It will pay your monthly personal loan payments up to a certain dollar amount. In addition you will receive a cash payment of a percentage of your loan amount each month to help you with the cost of living expenses.
Involuntary Unemployment Coverage Insurance for personal loans is very popular. This type of insurance will pay up to a certain dollar amount per month in personal loan payments for up to a set amount of months.
Personal loans are a great financial tool when used properly. Personal loan insurance is a very responsible invest to help ensure your payments will be made regardless of medical issues, unemployment, or in the event of death. The insurance is especially important for individuals with a secured personal loan. Not only with their credit be negatively impacted, but they will lose valuable assets that are tied to their personal loan.

Personal loan insurance is very affordable and can often be purchased through the lender. It is important that you educate yourself in the area of personal loan insurance and inquire about it at the time of looking into such personal loans. Most lenders are more than happy to discuss this option with you as it further assures them they will receive the funds you borrow.

Student Loan Xpress to forgive $113M in debt

Student Loan Xpress will forgive nearly $113 million in debt for students who obtained loans to attend a now-bankrupt helicopter training school, under a settlement between the loan provider, Missouri and 11 other states.

Missouri victims will be entitled to more than $2.9 million in student loan forgiveness, state Attorney General Chris Koster said Tuesday.

Silver State Helicopters of Las Vegas began operating in 2002 as a small helicopter pilot training school and ultimately operated 34 flight schools nationwide.

For at least two years, Student Loan Xpress served as the preferred student lender for Silver State Helicopters, providing about $172 million to more than 2,800 students nationwide, Koster’s office said.

Records showed that only a small percentage of students graduated and drop-out rates were exceptionally high, according to Koster’s office.

By 2008, Silver State Helicopters had ceased operations and filed for bankruptcy, leaving students up in the air.

The Missouri Attorney General’s Office received 53 complaints about the school’s bankruptcy and the student loans still owed.

Blogged with the Flock Browser

Student Loans Ripe for Takeover

Student loans ripe for takeover

THE EASTERN ECHO
A What would you think about a law that saved billions of tax dollars while providing American college students with more affordable, dependable student loans?

Unless you’re used to getting paid billions for doing next to nothing – like the private student loan industry is – I’m guessing you would think that law was a darn good idea.

Last month, the U.S. House of Representatives voted 253-171 to pass the Student Aid and Fiscal Responsibility Act (SAFRA). If passed by the Senate and signed by President Obama, this legislation would expand higher education, help fund school construction and support early childhood learning.

And, if those gains were not enough, SAFRA would also make more financial aid available to students – and save the government money at the same time.

“Impossible,” you say? Well, hold on to your tea bags folks, because SAFRA is one big-spending government takeover every honest fiscal conservative should support.

According to a report by the national Parent Teacher Association, SAFRA would spend more than $90 billion on improving the U.S. education system over the next 10 years. $40 billion would be spent to increase Pell Grants, $10 billion to help community colleges improve job training, $7 billion to build and modernize schools, and billions more to provide direct federal loans to college students.

“The President’s proposal provides a comprehensive and reliable solution for today’s students while saving taxpayers over $4 billion a year,” Secretary of Education Arne Duncan said at a U.S. House Education and Labor Committee hearing in May.

And while increased federal spending on education is always a worthy exercise, what makes SAFRA unique is how it would raise the money needed to achieve its lofty goals. To come up with the $90 billion over 10 years, this legislation would simply stop subsidizing the private student loan industry in this country.

It’s really just that simple.

Currently, the Federal Family Education Loan program (FFEL) pays private lending institutions billions of dollars in fees every year to loan American tax money to college students. Instead of continuing to provide this annual corporate welfare to private lenders, SAFRA would allow all federal student loans to be made directly to students.

But why does the U.S. government give billions to private lenders every year just so these lenders can loan our own money back to us? And why is Uncle Sam required by law to cover 97 percent of the debt if student borrowers default on their loans?
The answer is both sad and funny. The FFEL program, it turns out, was devised by government bureaucrats trying to solve a problem created by government accountants.

The FFEL program (pronounced ‘fell’) was created in 1965 as a response to arcane federal accounting rules that recorded direct loans to students as annual losses. And although federal tax money subsidized every FFEL loan made through private lending institutions, these ‘private’ loans were only recorded as losses if the student defaulted.

After President George H.W. Bush revised these accounting standards in 1990, the Clinton administration began a direct loan program in 1993. Instead of paying out 15 percent of the loan amount to private lenders as a fee, this new direct student loan program actually earned about a two percent profit, according to an exhaustive analysis of the student loan industry published in August by Rolling Stone writer Tim Dickinson.

Getting SAFRA passed by the U.S. Senate and onto the president’s desk seems like the proverbial ‘no-brainer’ to real American fiscal conservatives. Even if you hate Obama, you have to prefer earning billions of dollars in profits to simply giving them away.

But there are plenty of corrupt pseudo-cons out there who are rallying hard against this legislation. And these contemptible corporate shills – Blue-Dog Democrats and Red-State Republicans alike – are being fed campaign donations by an army of financial industry lobbyists who stand to lose billions in profits if SAFRA becomes federal law.

One such group of financial industry hucksters is the American Student Loan Providers (ASLP). They represent the nation’s leading private, nonprofit and state-based education and financial organizations that provide federally guaranteed student loans through the FFEL program, according to the ASLP Web site.

Having the government take over all federal student loan originations, “would involve one of the largest expansions of a government program in recent memory,” according to one ASLP policy statement, which also happens to be quoted on GOP.gov, the Web site of congressional Republicans.

I guess Republicans in Congress figure it’s better to give away billions of tax dollars every year rather than to earn a profit by helping American students. Anti-Obama politics are one thing, but not supporting legislation that saves billions of tax dollars and helps educate U.S. college students just seems – what’s the word – unpatriotic.

But regardless of such partisan politics, SAFRA represents a bushel full of carrots for the American people – without any sticks. Providing a secure source of funding for college students is certainly good public policy. But doing so at a profit rather than at a loss is something even rarer in federal legislation: it’s good business.

Blogged with the Flock Browser

Obama Announces Steps to Channel Loans to Small Businesses

By HENRY J. PULIZZI

WASHINGTON--President Barack Obama unveiled initiatives to help small businesses, saying the U.S. has "a long way to go" to ensure that credit flows to an area of the economy hit hard by the recession.

"There is still too little credit flowing to our small businesses. There are still too many entrepreneurs who can't get the loan they need to open their doors and start hiring," Mr. Obama said in a speech at Landover, Md.-based Metropolitan Archives, a family-owned firm that stores and delivers paper files for large companies. "There are still too many who are struggling to make payroll and stay open. And there are still too many successful small businesses that want to expand further and hire more but just don't have the capital to do it."

As expected, Mr. Obama detailed plans for legislation boosting the maximum size of certain Small Business Administration loans and called for new steps to provide lower-cost capital to community banks. The administration hopes the measures will help boost job creation at a time when the unemployment rate is expected to top 10%. Small businesses shed 2.4 million jobs from the middle of 2007 through the end of 2008.

"Of all the steps we're taking to move this economy from recession to recovery, I continue to believe that the success of our small businesses will be a foundation upon which our future prosperity is built," Mr. Obama said.

Under the White House plan, the maximum size of so-called 7(a) loans would rise from $2 million to $5 million, helping businesses invest in machinery, equipment, land, and buildings. The SBA's 7(a) loan program provides partial guarantees on loans for small businesses borrowing to invest in working capital, machinery and equipment, and real estate. It is the agency's largest loan program.

The top size of the SBA's 504 loans would rise to $5.5 million, an increase the administration says would help businesses expand their payrolls by supporting real-estate purchases. The 504 program provides guarantees on loans for real estate and other fixed assets to small businesses for expansion that will create and retain jobs.

The maximum size of SBA microloans would increase from $35,000 to $50,000 under the administration's plan.

In the second plank of the White House plan, community banks with less than $1 billion in assets, which make the bulk of small-business loans, could receive new capital at an initial dividend rate of 3%. The current rate is 5%. The rate would increase to 9% after five years to encourage timely repayment, according to the White House.

In hard-hit rural and urban communities, Community Development Financial Institutions that do the bulk of their small-business lending in underserved areas would get access to capital at a 2% rate for up to eight years.

"The major banks that were in critical condition a year ago need no new assistance from the government, and so we are winding down that portion of the TARP program," Mr. Obama said. "But to spur lending to small businesses, it's essential that we make more credit available to the smaller banks and community financial institutions that these businesses depend on."

An administration official said the amount of money allocated for the program under the Troubled Asset Relief Program won't be determined until after a consultative process that will be wrapped up before the end of the year. The official said the program can be executed with existing funds and won't be reliant on TARP repayments.

Institutions that take part in the new program would be subject to the requirement that TARP participants sell warrants giving the government the right to purchase common stock at a set price. There would, however, be a de minimum exception for some institutions. Participants also would be subject to TARP rules on executive compensation, though an administration official said he didn't expect that to be a deterrent for small banks.

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LOAN - DEBT - EQUITY

Loan'- Middle English lan, lon, from Old Norse lān
1. Something lent for temporary use.
2. A sum of money lent at interest.
3. An act of lending; a grant for temporary use: asked for the loan of a
garden hose.
4. A temporary transfer to a duty or place away from a regular job: an
efficiency expert on loan from the main office.

Usage Note: The verb loan is well established in American usage and cannot be considered incorrect. The frequent objections to the form by American grammarians may have originated from a provincial deference to British critics, who long ago labeled the usage a typical Americanism. Loan is, however, used to describe only physical transactions, as of money or goods; for figurative transactions, lend is correct: Distance lends enchantment. The allusions lend the work a classical tone.

Debt: An amount owed to a person or organization for funds borrowed. Debt can be represented by a loan note, bond, mortgage or other form stating repayment terms and, if applicable, interest requirements. These different forms all imply intent to pay back an amount owed by a specific date, which is set forth in the repayment terms.

hat throbbing in your head? That's a hangover from the borrowing binge we've enjoyed for most of this young century. And make no mistake, we did enjoy the party.

The beauty of the whole shindig was that we could justify it financially, since the costs of borrowing were relatively low. We were like mini private-equity firms, using cheap debt as leverage to scoop up our share of the American Dream. In retrospect, it's clear that what started as a celebration morphed into quite a bender. According to the Commerce Department, Americans collectively spent more than we earned after taxes for the past two years in a row -- the first time that's happened since the Great Depression.

When it comes to building wealth, saving and smart investing get the most ink. But understanding how to manage your debt can be even more important to your financial future. The explanation comes down to Home Economics 101: Paying interest works against you in the same way that earning it works for you when you invest.

That's why we've laid out four strategies that can help you make your debt cheaper, and let you get rid of it faster.


Equity - Middle English equite, from Old French, from Latin aequitās, from aequus, even, fair
1. The state, quality, or ideal of being just, impartial, and fair.
2. Something that is just, impartial, and fair.
3. Law
4. Justice applied in circumstances covered by law yet influenced by principles
of ethics and fairness.
5. A system of jurisprudence supplementing and serving to modify the rigor of
common law.
6. An equitable right or claim.
7. Equity of redemption.
8. The residual value of a business or property beyond any mortgage thereon and
liability therein.
a. The market value of securities less any debt incurred.
b. Common stock and preferred stock.

9. Funds provided to a business by the sale of stock.