Financing

BRENTWOOD, Tenn. -- Service Merchandise Co., a troubled jewelry and home-products retailer, said the company obtained $750 million in financing and chief executive Gary Witkin abruptly quit as it struggles to pay lenders.The company said it will use the financing from Citigroup Inc.'s Citibank unit to improve operations and repay bank loans and debt obligations. Last month, it failed to make a $13.5 million bond interest payment, triggering a default.Sales have slumped and the company has been trying to attract customers by shifting to traditional stores from catalog stores.

A new car is one of the most important purchases most Americans ever make and, perhaps, one of the most confusing. As car manufacturers seek to clear dealer lots and make room for new stock, customers are bombarded by deals offering financing with low to zero annual percentage rates or hundreds of dollars cash back.How can you sort through these deals and make a purchase that works out best for you? Experts say the most important thing is to prepare yourself in advance, by researching deals, comparing prices and financing sources and knowing your financial limit.

Dear Mr. Azrael:My wife and I are considering purchasing land in Howard County to build a home. Could you please provide the following information [on] how to purchase land: financing; restrictions; things to look out for; and any other helpful hints or things to consider during initial stages of purchasing land.Cliff Saunders Owings MillsDear Mr. Saunders:Here's a checklist of questions to consider if deciding whether to buy a particular lot or tract for a homesite.Is the land served by public water and sewer?

Preston Trucking Co. Inc., a 67-year-old regional hauler based on the Eastern Shore that employs about 5,000 people nationwide, abruptly announced yesterday that it will shut down and lay off all its employees, after lenders said they would no longer finance the company's operating losses.Employees were told yesterday that all of them will be laid off within three weeks, many of them immediately.Preston plans to deliver the cargo still in its system, then permanently close its doors."We had no warning; it's been a shock to everyone here," said Ed Oldenburg, a 10-year employee working at the company's yard off Ordnance Road in Glen Burnie.

The nonprofit group hoping to redevelop the Memorial Stadium site passed another hurdle this week when its financing plans were approved by Baltimore officials.The Govans Ecumenical Development Corp. (GEDCO), which wants to turn the site into a senior center and YMCA, presented a proposal outlining the financing for the plan to the city Department of Housing and Community Development on Monday.The nonprofit, church-based group won a city government-sponsored competition this year with its proposal to turn the storied stadium site, former home to the Baltimore Colts and Orioles, into a campus including housing for low- and moderate-income senior citizens and a 45,000-square-foot YMCA for all ages.

Dear Mr. Azrael:My husband and I recently contracted to have a home built. The home is scheduled for construction to begin in October with an estimated settlement in January.We have put a down payment down and expect to put down over 20 percent at settlement. We need to secure a mortgage company [and] pay for an appraisal fee and a credit report.My question is that, since January is so far away, and no one knows what the rates will be, what is the best way to handle the financing?Do we just go ahead and go with [the builder's mortgage company]

Despite questions raised by the city's real estate officer, the Board of Estimates approved a Housing Department plan yesterday to sell a Reisterstown Road property to Afram Inc. for $1.Afram Inc., which holds festivals in the city, plans to build a two-story office building on the site in the 5400 block, for its operations and to lease it to third parties. If the building is sold in the next 10 years, the city would receive $10,000 in net proceeds.City real estate officer Anthony J. Ambridge told the board that he does not believe the deal was in the city's best interest.

Human Genome Sciences Inc., the Rockville genomics research company gunning to become a bio-pharmaceutical player, said yesterday that it has raised $100 million in a private placement.The company, which posted a $12 million loss in its most recent quarter, plans to use a portion of the proceeds to speed development of several promising new medical treatments in the laboratory, said Steve Mayer, the company's chief financial officer.Bolstered by the new financing, the company hopes to seek clearance from the U.S. Food and Drug Administration late this year or early next year to begin testing on humans up to two new experimental drug treatments, Mayer said.

Neighbors of a proposed Montessori School on Hughes Shop Road in Westminster used a public hearing yesterday on the project's financing to reiterate their opposition.Residents have signed petitions, attended development review hearings and organized the Hughes Shop Road Area Neighborhood Coalition against the $1.2 million private school, slated for 27 hilltop acres about a mile from Route 140.The school, with a planned eventual enrollment of 185, would cause the neighborhood problems with water supply and traffic, residents said.

PHOENIX -- The city of Los Angeles has been conditionally awarded the NFL's 32nd franchise for 2002, but it may be only double parked there for six months before moving on to Houston.In a resolution that was passed 29-2, the owners gave Los Angeles until Sept. 15 to put together a stadium financing plan that will meet league approval.If Los Angeles fails, the league will give the team to Houston, which has a stadium financing plan in place, but doesn't have the market power of Los Angeles.

Life insurance to get a bailout WASHINGTON : The Treasury Department confirmed Wednesday that life insurers are qualified to join banks and carmakers on the list of industries getting taxpayer bailouts. In a statement, the agency confirmed that certain life insurers are eligible to receive an unspecified amount of the money that remains from October's $700 billion Wall Street rescue program. The $218 billion program was created as part of October's bailout and is designed to help bolster the balance sheets of financial institutions.

Many new entrepreneurs associate the need for financing only with the startup phase of their business. A loan or line of credit is often a necessity to purchase equipment and supplies, lease a location and pay for marketing and administrative materials. However, outside financing also may be used to fund growth or open new locations, or to keep the business viable during an economic downturn. As part of your long-term business planning, consider if and when supplemental financing may be needed so that you can head off a cash crunch.

Wall Street might be in turmoil, but plastic-container manufacturer Maryland Thermoform Corp. is having a great year. Forget contraction - the Baltimore company is looking into equipment and software upgrades. The thing is, those purchases require financing. That's where Wall Street's troubles become Maryland Thermoform's problem. As major banks and investment houses fail, small businesses are finding financing harder to get - never mind if they're growing and didn't have anything to do with mortgages, credit-default swaps or any of the complex financial vehicles bringing big companies down.

For many small businesses, bank loans, venture capital and money from angel investors are financing long shots at best. It is far more common for a small business to secure funds from family members or even friends. Availability is the big draw. The downside is that business loans from family and friends also can be a disaster if they are not handled properly. Unstructured or loosely structured financing and pay back terms can haunt both sides in the future. Research shows that 14 percent of business loans from family and friends go into default, compared with about 1 percent for bank loans.

Frank Remesch, general manager of 1st Mariner Arena, has shown that big isn't necessarily better, and mid-size can be profitable. It's something members of a Baltimore Development Corp. team should keep in mind as they choose a location for a new Baltimore arena. A slightly enlarged facility with a snappy design should be the priority - not building a greatly expanded complex with the intention of wooing a professional sports team to Baltimore. The outdated, city-owned arena has hosted marquee acts in recent years and reaped the benefits.

Anew fund dedicated to Chesapeake Bay cleanup that was written off just days ago as the General Assembly focused on slots and other issues has been renamed, redesigned, refinanced and resurrected for approval by the legislature before its special session ends. Not all the changes are improvements; the financing method approved by the Senate is particularly troubling. But the policy measure crafted by the House Environmental Matters Committee and scheduled to come up for full House approval today is a solid advance in what sometimes seems the losing cause of reversing the pollution that is choking the bay to death.

Mary Jane Good advises start-up companies, volunteers with several community groups and is actively considering investment opportunities as she slowly diversifies out of a large position in her former employer's stock. Today, she chairs the Greater Cincinnati chapter of Score, a national nonprofit group that offers business counseling to entrepreneurs. "It's altogether different today," said Good, 71. "The baby boomers have a different perspective on retirement. Psychologically, people used to associate retirement with golf and bridge, but that's not the way we think anymore."

ATLANTA - Kevin Cornwell hadn't planned to buy a new truck when he took his Chevrolet Blazer in for routine maintenance. But the 35-year-old salesman left the dealership owning two - the Blazer and a 2005 Chevrolet Tahoe. His enticement was General Motors' popular employee-discount-for-everyone promotion, which cut about $5,000 from the Tahoe's sticker price. Cornwell and thousands of other new buyers have been a boon to Detroit automakers, whose discounts successfully lured shoppers into showrooms.

Plan to publicly finance campaigns is abandoned Supporters abandoned their effort to create a public financing system for Maryland election campaigns yesterday, conceding they do not have enough support in the House of Delegates. Del. Jon S. Cardin, the Baltimore County Democrat who was the bill's lead sponsor in the House, said he was surprised that the bill got as far as it did this year - it received a favorable report from the Ways and Means Committee - but he said not enough time remains in the session to win majority approval.

The Ehrlich administration's ties to influential developer Willard J. Hackerman extend beyond the state secretly negotiating a deal for preservation land that would benefit him financially. This year, Gov. Robert L. Ehrlich Jr. appointed Hackerman to a state board that approves financing for the huge public-sector and nonprofit construction projects in which his company, Whiting-Turner Contracting Co., is frequently involved. Since February, Hackerman has been an unpaid member of the Maryland Health and Higher Educational Facilities Authority, which last year issued $489 million in tax-exempt bonds to 15 institutions, according to its 2003 annual report.