Borrowers with small commercial mortgage requests have limited options as many banks, lenders and commercial mortgage brokers will not consider working on or reviewing these smaller deals. The primary issue is that there just isn’t enough money in them to make it worthwhile for these professionals. Also, many smaller commercial mortgages turn out to be more difficult to get done and can be more work than larger commercial loan request, with the bigger pay day.So if you’re a borrower with a loan amount less than $500,000 what are your options? Number one, is get ready to play “ball”. Most banks, if they’re going to compete over a $300,000 commercial mortgage, for example, will want spin off business. For example they will certainly want deposits both in the form of checking and saving accounts. It’s not uncommon for them to ask for personal checking and savings as well. And the bank will be very interested in providing benefits to your employees, like insurance and 401k plans among other spin offs type products.You may have other options however besides just the local bank. And, their commercial mortgage options maybe undesirable as they often only offer 5 year fixed with 20 year amortization type loan structures. For example, there are still banks and lenders out there with non depository set ups that are only interested in writing your commercial mortgage. Again most of these groups only look at deals greater than $500,000 but there are roughly 10, maybe 20 national banks that want your smaller commercial mortgage. Some will go down to $200,000 a few even lower.The key here is to know where to look and where to find these banks that are actively marketing towards these lower loan amounts. And you want to make sure the contact person you’re working with is interested in doing the deal as well. If not, the process will be dragged out as your request will be ignored and neglected at the bottom of the “pile.”It’s interesting to note though that there are still some creative options out there for these smaller loan requests. For example we work with a bank that has a program geared towards loans under $500,000 and that they pay for all of the third party reports to do the loan.
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Health Reform Changes Affecting Small Business
“Don’t tax him. Don’t tax me. Tax the guy behind the tree”- attributed to Former Congressmen RostenkowskiOwners of small businesses and their workers could be severely impacted by the recently enacted health reform legislation. Some key provisions related to tax credits, new excise taxes, penalties, and some higher taxes, all of which depend on a number of factors such as number of full time employees in the business, average incomes of the employees etc. This article will provide you an overview of its significance to self employed taxpayers who have less than ten full time employees.Generally, the present Obama administration and Congress have noted that the new health reform proposals will provide better insurance for small businesses at a lower cost, which will create more jobs. However, there is also a lot of strongly negative feelings among the business community. Let me present some of the provisions so that you can judge for yourself and plan accordingly.Benefits to small businesses: Despite the negative press about the law, there really are some positive changes that will affect small businesses.
Small Business Exchanges: Small business will be able to pool their resources in state exchanges called “Shop exchanges” in order to buy insurance. Normally these exchanges apply to companies who have less than 100 employees by 2014;however, states have the option to limit access to these exchanges for companies of under 50 full time employees. Premium expectations are expected to reduce overall insurance costs by 1-4% per year for each employee, which is a very good provision under this plan.
Tax Credits for certain small employers who provide insurance. Generally, if you have fewer than 50 full-time employees, you don’t have to provide health insurance for your workers. However, if you do provide insurance, you might be eligible for a yummy tax credit, which is a dollar-for-dollar reduction in your taxes.
To be eligible for this credit, you have to have less than 25 full-time employees whose annual average earnings (not counting the owner) of no more than $50,000. For companies of 10 or fewer employees, you would be eligible for a 35% tax credit (which goes up to 50% after 2013) in later years, if your average full time equivalent wages are less than $25,000 per year. This credit begins in 2010 and goes till 2014. There is a second phase of the credit that small business would get up to 2016. Thus, qualifying small businesses can get this credit for up to six years.Sandy’s elaboration: This credit sounds great, but having it apply to small businesses (of no more than 10 full-time workers) and who average under $25,000 of wages will substantially reduce its applicability to most businesses. Estimates are that this will benefit about 7% of self employed businesses.
No more lifetime caps: For most health insurance, there is a $2,000,000 lifetime cap for usage. Starting immediately, these caps are to be removed. This could allow coverage for a number of small business folks who might have exceeded the cap.
No pre-existing conditions: starting in 2014, there will not be any pre-existing conditions. Thus, even if you have a major medical problem, you will be guaranteed to get health insurance. This is a great provision that will allow coverage for those small business folks and their employees who might not have been able to get insurance coverage.
Dependent children can be kept on parent’s insurance through age 26: Normally, kids who turn age 21 have to get their own insurance and can’t be kept on their parent’s insurance. This will be changed so that dependent children who are under age 27 can be kept on the parent’s insurance. This becomes effective on March 30, 2010. I should note that although dependents under age 27 can be added to the parent’s insurance e policy, there is no requirement that an employer add them to the policy.
Small Businesses are exempt from penalties for failing to provide health insurance: Generally only companies that have 50 or more full-time employees need to provide health insurance coverage or face penalties. However, since small businesses of under 50 full-time employees don’t need to provide any coverage, they are exempt from these “Pay or Play” penalties.
Sandy’s elaboration: If you have a business with 50 more more full-time employees, you are indeed required to provide health insurance.As you can see, there are some good provisions for both the business owner and for small businesses. Thus, why the strongly, negative comments from the business community? The reason is that there are a lot of congressional “gotchas” that affect everyone.Problems with the healh reform legislation
New taxes: There are a number of new taxes and costs that will beef up the overall insurance costs for small businesses. For example, there is an income tax increase starting in 2010 of between 5%-10% for those who make over $200,000 of adjusted gross income. In addition, Medicare has been increased for everyone by.9% for all employees and for the owner who make over $200,000 of adjusted gross income and is single. Married taxpayers filing joint returns have to make of $250,000 of adjusted gross earnings in order for this.9% Medicare surcharge to kick in. This may not sound like a lot, but, for someone earning $300,000 in salary, this could result in a $900 increase in Medicare taxes for each employee in that income bracket regardless of profitability of the business! In addition, if the adjusted gross income of the worker or the owner is over $200,000 ( for single taxpayers) or over $25,,000 (for married filing joint taxpayers), there will be a 3.8% Medicare surcharge on all of their interest, dividends, rents and royalties. This will also apply to dividends from S Corporations. So much for saving costs!
New excise taxes: In order to help pay for this new law, there are some additional excise taxes on many medical devices that ordinarily aren’t purchased by most people. Thus, there will be no excise taxes on glasses, hearing aids, and contact lenses. Most other devices, however, will probably have the excise taxes apply to them. In addition, there will be additional taxes on the health insurance companies, some insurance plans and pharmaceutical companies. You might wonder how these additional taxes apply to self employed taxpayers. The reason is that these additional costs will be passed through to everyone including the self employed.
Additional 40% excise tax on Cadillac health insurance: The new law places a whopping 40% excise tax on high-cost employer-sponsored health coverage, often referred to as “Cadillac” health plans. This tax applies to premiums that exceed $10,200 for single coverage and those that exceed $27,500 for family coverage. There are some increased thresholds for retired taxpayers who are age 55 and older and for those engaged in “high risk occupations.” Thus, if you want top notch expensive insurance coverage, you will pay a lot more to get it. This even assumes that an insurance company will even offer it at all.
Increased paperwork: Generally those who do provide insurance through the exchange for their workers will need to fill out some potentially new paperwork showing the name of the employee, the amount of premium paid the contribution by the employee, notification to the employee about the coverage etc.
Midsize to large companies much provide health insurance: If you have a company consisting of 50 or more full- time employees (part time will be counted on a fractional basis depending on their hours), you are required to provide medical insurance or face big penalties. However, this is required regardless of profitability. Think about this. This could result in a number of unprofitable or marginally profitable companies going broke, which could actually substantially reduce jobs. In addition, this would spur either the hiring of more part time at the cost of reducing the number of full time employees or increase the sucking sound of companies going to places like China or India. The result of all this would mean a lot less jobs.
Bottom Line: Although there are some great provisions in the new law such as waiving pre-existing conditions and lifetime benefit caps, the increased taxes and costs incurred for most small businesses will probably exceed the decrease in health premiums resulting in an overall increase in total health costs and taxes to self employed businesses. Thus, I don’t see any job creation resulting from this law. In fact, it may well cost a lot of jobs.P.S. Check out my free lesson on “How to write off all your medical expenses!” Free Lesson http://www.PocketbookProfessor.comBy Sandy Botkin CPA. Esq
An Observed Trend in Modern Heroic Characters and Its Possible Social Consequences
I will firstly broaden the term heroic figures to also include a large proportion of main characters for the purpose of this article. I do this because what I am going to write about can just as simply include any character with traits and/or abilities that would render them uniquely superior or separate to the majority of the individuals around them. Or for characters that exist in a world where the majority of our recognisable social interaction is non-existent or contradicted. To put this into stark focus I will provide two seemingly nonrelated examples; any character with superpowers well above the normal ‘mortal’, or many younger children’s programs where the mentally juvenile characters exist in context without adults in a partial representation of modern world.Here I am not talking about Peter Rabbit or Warner Brothers cartoons. The characters in many older media interact in a very recognisable (if highly limited) social way, even if it is just blowing each other up with TNT. Though the character may be a talking duck, they exist in a world with laws, consequence, birth, death, aging… the character fits into society as far as recognisable, even if in an exaggerated way. It should also be noted that most of these characters are as old as the context would indicate, most are actually adults, only depicted in a way to please youngsters.The actual individual examples are not that critical and it should be remembered I am talking about a tendency here in current media, not any particular glaring example. What is critical is the lack of direct relevance that these characters have (not in of themselves, but in the social interaction that they portray) to the observer, the young child and the adult. I include children’s media as part of this context specifically because what we experience as children is the foundation for our whole interpretation of the world and its inter-relations.In particular there is a tendency for children’s media to become increasingly more abstract. It focuses specifically on characters that have high appeal in individual characteristics, look, freedoms, environment and purpose, thus triggering key criteria within the youngster’s minds while sacrificing any relevance that these combined characteristics have to the world we actually live in. For example the main character could be a young child, independently exploring dangerous environments without adult supervision, or interacting in a social or physical context that would not actually be practical or indeed safe in real life.It is important to distinguish here that I am talking about the complete absence or distortion of a normal social framework in terms of character interaction only, not what or who the characters are themselves. 4 grown men singing songs with puppets is not an example of what I am pointing out… the men still exist in the real world, the puppets have no context that would contradict a normal social order in terms of characters alone, they still react to the men as appropriate to their portrayed age or characteristics. What I am referring to are permanent extreme examples of social order distortion such as juvenile characters existing independent of adults in a world where there appear to be no adults.This is not something that would even register as a problem for many people as many of these characters and the storylines they participate in are portrayed as representing individually relevant good examples. This could include teaching curiosity or the value of kindness or the importance of preparation. These are indeed valuable lessons worthy of expressing and often done quite well. It is the social context of these individual lessons whose importance is sometimes deteriorated in favour of inflating the importance of the individual act itself. Often to the point of rendering the act a severe exaggeration and something that would never be observed in real life.For very young children this is often justified as representing a figurative gesture and heightened deliberately to ‘bring home the point’, supposedly more suited for young minds with lower attention spans. As a child’s most immediate interaction to the world is a mosaic of social exchanges continually reinforced by actual experiences, the worth of abstract values painted in unrealistic social settings is diminished or at worst contradicted by experience and can lead to confusion in terms of expectation and what is represented as appealing and ideal in a fictitious setting.This is not to say that children’s media has to have a lesson or even represent a close representation of current society, the main character could be a bee, or a cobalt with magical origins. Abstraction and contradiction can be quite entertaining and educational… I am not drawing a line in the sand or painting anything in black or white. I would simply like to discuss what I perceive to be diminishing positive relevance to the observer that greater abstraction and lack of recognisable social interaction would provide. In most cases this is not important, as the media is purely trying to entertain or not particularly concerned about the value of what it is portraying. It has significantly more relevance, however, when the media specifically claims to portray values using a social framework that is non-existent, inconsistent or at worst contradictory or counter intuitive to our own society.Once we are older or even adults this can continue in terms of the characters we identify with or look up to. Media focused on young adults and adults often also continues this trend of separating the main characters from any social interaction that would be observed in actual society, though for adults this is done slightly differently. Though the individual ‘human’ values shown within the storyline are not as exaggerated as for young children (at least, not always) the abstraction of the characters in terms of their abilities and relevance to general society is greatly increased. Be this superpowers or abilities, being part of a special order, an elite unit or an inherited legacy, the social context of these characteristics is to separate them or render the character special or different to the majority. This, like the abstract portrayal of children’s television leads to a degradation of the relevance of the social interactions that these characters can experience.Now the level that this is done is specific to each individual story regardless of media, and indeed making the main character special has been a hallmark of storytelling since time immortal. But it should be reminded that there is a distinct difference between the character’s actions allowing the observer to identify with them, to the relevance that this act holds in terms of any recognisable social interaction observed day to day. Again I have to reinforce that I am highlighting this as a direction or trend in more modern media to amplify special attributes of the main characters and their social position and want to point out how this detracts from any recognisable social context.So what of the consequences of this illustrated trend in lack of recognisable social interactions you may ask? I would assert that the larger this gap between the social contexts of the good deeds we see represented in abstract to what we experience day to day in our own social interaction, the larger these values are not transferred, or possibly even registered as a fanciful ideal and/or actions to be done by others. To drive home the point I will again state I am talking about the interaction of characters, not their façades or specifically their environment.Now most of the following examples of the consequences of these trends are by necessity exaggerated to illustrate the ‘direction’ that the trend would point, in as few numbers of words as possible. I will leave it to the reader to realise that this is the most extreme form of consequence that the most extreme form of the discussed trend would ‘reinforce’, it is a not a suggestion of cause and effect, merely pointing out one of the many factors that influence our daily experience… some reader discretion is required.It is the disassociation between what social interaction is observed within media and experienced in real life that I feel should be discussed. When social interactions are being portrayed as too abstract, idealised or completely fictitious it has a tendency to reinforce a misalignment in expectation regarding social interactions, thus assisting in amplifying negative real life outcomes. This is naturally on a subconscious level but it does continually reinforce a negative view of reality in comparison to the fictional world where the world works ‘properly’, no surprise then that the potential underlying desire to limit the social interaction with others is increased. On another level it can also assist in leading to a subtle disempowerment in terms of one’s own abilities to undertake change, particularly in a larger social order. It is the reinforced misguided belief that someone needs to be ingrained with something special to allow them to exert a change on their surroundings.This is all relative of course, imagination and the abstract are not a precursor to disassociation. It, as always, comes down to individual context. The escape of individuals into a world of fantasy and shunning the world is not a new phenomenon. I’m not here to say one has to lead into another, it is more to state of subversion, but not even a deliberate one, one caused by circumstance and market forces… gimmicks and key triggers are easier to mass produce and simpler to write generic formulated plots for, its scripted, exaggerated and no doubt loved by the executives and financiers, low risk, high throughput and formulated… but not exactly enlightening.And it is these formulas and the one upmanship of hollow gimmicks and lack of real interaction that I believe not only detract from any value of the story but also ultimately detracts from the quality of the story itself… social interaction is what makes a good story, it can be twisted and uncommon but it should be realistic insofar as the reaction to social circumstance is ‘realistic’ for the characters portrayed. The point of this article is to highlight the advantages for a story to not drifting too far from being a representation of common social interactions as well as to show the value in not having the main character be too different, separated or special in terms of the normal populace as represented in the story.You can still have your princesses and frogs, still have your outsiders and aliens, the question is how do they interact on a social level, is it a mirror of modern society? Is it even logical? There is no reason that a different social order or set of social morels can be used, but do the characters (even if not human ones) have interpersonal relations that would show that they are part of a logical social society?Just my thoughts on the matter, nothing sinister or malicious intended. I am interested to hear what others think of it though…