Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Investor Opportunities in the New Lending Market

Companies / Investing 2015 Apr 17, 2015 - 10:29 AM GMT

By: Money_Morning

Companies

Shah Gilani writes: The new lending Disruptors are marching – make that rampaging – over the traditional fields and fortifications once commanded by banks.

Today I’m bringing you further proof of the powerful changes these Disruptors are driving, as well as the opportunities they are creating. And I’m also answering some pretty good questions readers posed in response to our recent reports on Lending Disruptors.


(By the way, we’re certainly not done talking about those Lending Disruptors. I’m going to come back on this subject with a few killer stock opportunities for us to play and profit from. But it’s time to move on to the next giant Disruptor that’s going to make us money. And the next Wall Street Insights & Indictments report will impact you, your wallet and even your health, so be sure to stay tuned.)

Today, however, let’s take one last careful look at Lending Disruptors.

It’ll be well worth your while…

A Special Tax Tip

Earlier this week, in American Banker, I came across an article by Nick Clements. He knows the credit card business inside-out, having previously served as the managing director of the consumer credit card business at Barclays PLC (NYSE ADR: BCS). And his sentiments echo exactly what I’ve been telling you about the new Lending Disruptors.

“On the West Coast, a crop of startups without legacy earnings to protect are looking to disrupt an industry that has thus far failed to give consumers the value they deserve,” Clements wrote. “Companies like SoFi, LendingClub and Payoff are offering loans with much lower interest rates than credit cards. In addition to lower rates, these companies are providing customers with a much more transparent product, thanks to the simplicity of a personal loan.”

An attack on the credit-card business is a frontal assault on every big bank’s most lucrative line of business – credit-card lending. Among all the “traditional” lending activities banks engage in, credit cards generate huge, consistent revenue streams, have the fattest profit margins and are major contributors to a bank’s bottom line.

The moat that for so long protected banks’ business lines and profitability is being filled in quickly by the new lenders – and there’s no turning back.

Now here are a couple of great questions that readers wanted answered, which I’m all too happy to do in order to help make it easier for you all to make money

Do the business-development companies (BDCs) you recommend issue a K-1 form to shareholders for tax reporting? I’m interested in the income from these BDCs, but the shareholder must anticipate the lateness of the issue of the K-1 and know to hold off filing taxes until the last minute so the report can be included in the tax filing.

-Jerry

Yes Jerry, BDCs do issue a K-1 for tax-filing purposes. Ideally you would receive this at the end of February or beginning of March. However, some BDCs have been known to issue late these in the tax season, causing you to have to file an extension. Therefore, this should definitely be a consideration when investing in these vehicles.

Thank you for your informative report. I’ve known about BDCs: But are they like “master limited partnerships” (MLPs), where you need to invest a lot of money – like $10,000 in each company – because of tax requirements?

My tax preparer told me to get out of MLPs, because I did not invest large amounts of money, and I was paying through the nose to my tax preparer, because of the extra paperwork that is entailed on the preparer’s end.

That’s one point that is not addressed in any of the newsletters I have read. Investors are encouraged to get into MLPs – because they have to pass their profits on to the investor (90%) in the form of dividends. But when you only invest small amounts, it amounts to pennies you get back. So unless you have $10,000 to invest in them, it’s not worth the effort. Does the same principle apply to BDCs? It is an important factor when making decisions about investing in a trade.

I appreciate all that you do to help us – even the little investors. You are a gem!

-Mary

Really good question, Mary. Because BDC distributions are subject to more complex tax treatment than ordinary dividends, there will be some extra work on the part of your tax preparer. What you receive from the BDC is broken down and taxed as four different kinds of distributions: income, qualified dividends, non-qualified dividends and return of capital. The extra work for your tax preparer may be prohibitively expensive, and you should leverage this cost against any other “extraordinary” kinds of preparation he or she is already doing for you.

Thanks for the comments and questions: As you can see from today’s report, I follow them closely. In fact, I encourage you all to keep them coming. You can post them below.

And be sure to check in next week when we delve into the next big Disruptor opportunity.

Source :http://www.wallstreetinsightsandindictments.com/2015/04/shah-answers-questions-disruptor-driven-profit-opportunities/

Money Morning/The Money Map Report

©2015 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules