Monthly Archives: November 2017

International Finance and Global Relations

Countries are currently more proactively working together causing an increase in globalization. Globalization started after World War II but has accelerated considerably since the mid-1980 mostly because of technology being sought out overseas and more governments are refusing to protect their economy from foreign competition. Since international trade and globalization have been rising there is the need for more International laws. International law allow nations to work together cooperatively to make this globalizations possible through things like treaties and agreements for international trading. The exchange of goods across international borders needs to be regulated by laws so that countries can get along and problems and disagreements can be minimized. These laws are hard to establish because of the lack of a central world governing system but must be made and recognized in order for the interactions involving trade between all countries involved to be possible. Even with lack of a central global world leadership program, countries abide by these laws because they know that in order for mutual benefit they must get along. Things like natural law and the knowledge that another country will retaliate if one country does not hold up their end of the deal deters countries from breaking these agreements. International laws make trading easier for countries by forcing the parties to agree upon the rules and interactions that are in the best interests for everyone involved.

Along with international law comes the decision of countries to form international tariffs. Tariffs are a type of international law formed for reasons such as protecting internal and developing economies, protecting domestic employment, protecting consumers, national security and retaliation. Tariffs protect the internal economy and developing economies by increasing the cost of goods imported therefore restricting the amount of international trading that occurs. This in turn allows small companies and production of resources to be domestic and to become established. This also increases employment in the domestic country where the tariffs are being enforced. Tariffs also protects consumers when the governments of some nations place high tariffs on imports that they know are going to contain harmful products which will usually deter the trading of these goods. This also pertains to national security. Retaliation occurs when a country is trying to either protect their own economy or if a military action or war occurs then the other country may not agree with the decisions and a tariff will be placed on goods as punishment. Tariffs are basically taxes that add to the cost of imported goods by one of two ways; either by adding a fixed fee to a single unit of good or adding a percentage to the value of a good. Although most laws are needed for smooth interaction between nations, tariffs cause problems because they get in the way off a natural flowing free trade system. The reduction of tariffs between international nations would further increase international trade and benefit globalizations in general allowing the best allocation of world resources.

Regional trade blocks can contribute to transition countries’ economic stabilization but they also carry risks of diverting trade from potentially more beneficial trade partnerships with other countries. Ten transition countries in Central and Eastern Europe and the Baltic’s have applied for membership in the European Union, and nearly all transition countries have applied to join the World Trade Organization (WTO). Joining the WTO would provide countries with protection particularly quotas which still hinder their exporting many goods to developed countries. Among these goods are agricultural products, iron and steel, textiles, footwear, and many others which may have comparative advantages. Joining the WTO would not only present rights on transition economies, it would also require them to meet certain obligations, such as maintaining low and abolishing non-tariff barriers. A major challenge for transition economies is finding their place in the worldwide division of labor. In many cases that means diversifying the structure of exports, particularly to developed countries.

Investment Property Financing and You

Obtaining investment property financing is no longer a big issue these days. However, it does require a great deal of effort, time and money to be successful in the investment property business.

For their own benefit and also to convince the financer, the investor needs to be clear about the reason for purchasing investment property, the amount required to be borrowed and for what period, the expected returns on the investment, can he or she afford it, etc. This helps in narrowing down the type of property that would suit the investor’s needs, identify the lender(s) who should be approached, consider all the tax angles as well as identifying which specialists or consultants need to be hired or referred to so as to get the job done smoothly and completely – ensuring that there are no hassles later on.

The primary objective of investment property financing is to ensure enough funds are available to purchase property that would generate income as well as profits through rentals and appreciation of value. The most common sources of such financing are the banks, lending and financial institutions, but there are an increasing number of private financers including venture capitalists who see this form of investment as a win – win situation, especially with the housing market slowly picking up all over the world, after being ravaged by the recent economic downturn. An investor having a good credit history and score, a proper investment plan and some collateral is sure to get the investment property financing required, sometimes even up to 100% of the value of the property.

Construction Financing and Commercial Loans

There are many new challenges which are increasingly evident with commercial mortgages, particularly those involving commercial construction loans. Many commercial financing experts currently project that the changing environment for working capital loans and most other business financing will produce several new but avoidable problems for small business owners.

There have always been complex problems for business owners to avoid when seeking commercial loans. By most accounts, these difficulties are now expected to multiply because we appear to be entering a period which will be characterized by even more uncertainties in the economy. Prior standards for commercial mortgages are likely to change suddenly and with little advance notice by lenders if the current financial turmoil continues.

This article will evaluate why commercial construction loans have become harder to obtain and will discuss possible commercial finance funding solutions. The current economic uncertainties combined with less capital availability for commercial mortgages in general and construction financing in particular means that it is much more likely that borrowers will need to look beyond their regional market area for business financing help. In many areas of the United States, virtually all business construction funding sources are effectively inactive at this time in addressing new loan requests.