Why Private Lenders are a Great Option for Investors

If you’re having a hard time getting a loan from traditional money lenders such as banks, then you may want to consider using private lenders. Private lenders do not have to follow all the same rules and regulations imposed by the government or other bodies as traditional money lenders. Private lenders can choose who they do business with.

This makes private lenders a great option for entrepreneurs and investors because all you have to do to get financing for your business is convince the private lender that it’s a good investment. Using private lending also results in faster closings, less paperwork, and involves more of a human element instead of just numbers on a balance sheet.

Benefits of Using Private Lenders

When your private lender decides to loan you the money, you can then work out the terms of the financing agreement. You and the private lending institution can decide on terms that are mutually beneficial.

Because private lending is equity-based or asset-based, instead of credit-based, you do not have to meet the same criteria as you would with conventional loans. Private lending groups do not care so much about your income-to-debt ratio and credit worthiness as a bank or other traditional lender would.

Loans from banks are more one-sided than loans from private lending groups. This is because banks are required by law to follow heavy government regulations. Private lending groups are not restricted by all the same regulations. You can negotiate the terms of your loan.

Often times the total interest on the entire private loan term are “rolled” into the loan amount and paid in advance at closing. This is great for investors because this means the borrower (investor) will not have to worry about making a periodical mortgage payment for most, if not all of the loan term.

Another great benefit to having private lenders available is that you never miss out on a good deal. Because you’ve already exchanged information with your private lender, you have a solid source of quick capital. You no longer have to worry about how you’re going to pay for your real estate or business costs in time. You can instead focus on your goals.

Another big advantage to using private lending is a faster closing time. Private loans can be closed faster than loans from banks; in fact loans from private lenders will close in as little as 2 business days! Private lending can be used to finance just about any type of property or business. You can take advantage of private lending to finance anything from undeveloped land, to large commercial properties, single family homes to business cashflow.

Use Private Lending to Grow Your Business

Private borrowing can be a boon for your real estate investing business. Many investors have missed out on great deals because they couldn’t get financing from traditional lending institutions. Now that you know the distinct advantages that private lending offers, you no longer have to miss out on lucrative real estate deals.