Do you have any other alternative to conventional bank loans?

Absolutely!

Private money lenders are just as effective at extending loans for real estate transactions and other financial obligations.

These lenders are easy to work with and offer tons of benefits to borrowers. We look at why private money lending firms are a better option than banks and how borrowers can benefit from their quick services.

What Are Private Money Lenders?

As shady as private money lenders might sound, these organizations are perfectly legal and preferred by millions of borrowers across the nation.

A private money lending firm is an organization or a group of investors that extend short-term loans to borrowers. Most of these loans are asset-backed and are extended for just a year or sometimes more than a year.

With a private money lender, borrowers can fill out loan applications and seek out high-value loans without any strict restrictions.

Private Money Lenders Vs. Banks—Which Is Better?

Even though private organizations or investors offer private money loans, they’re less strictly regulated than banks or traditional lending institutions.

Private lending firms have to conform to usury laws and ensure they don’t charge high-interest rates from borrowers. These slight regulations place a check on private lending firms and ensure that borrowers are protected at all times.

Moreover, since private investors back these private money lending firms, borrowers don’t need to fit the requirements or guidelines as laid out by federally insured banks.

These private lending firm makes for a more convenient and accommodating financing option for most real estate agents and homebuyers. Here’s why.

Private Money Lenders Redefine Flexibility

Private money lenders can be more flexible than you might think!

These private lenders aren’t strictly regulated; they are insured by private investors and don’t require borrowers to comply with unbending guidelines. This gives them the leeway to create more flexible, more convenient loan terms for their clients.

Moreover, private money lenders aren’t federally insured, which is why they don’t set strict restrictions for their borrowers. Borrowers get a lot of elbow room to use these funds in whatever way they wish to and can’t be dictated by the lenders on spending these funds.

Credit Score Doesn’t Matter

Think you’ll need a sky-high credit score to get approved for a hard money loan? Absolutely not!

When it comes to working with private money lenders, borrowers gain the advantage of skipping past the horrors of their financial history and seeking out a loan with a clean slate. Since private money lenders are almost always focused on the details of the collateral being offered against the loan application, these firms overlook any foreclosures, bankruptcies, and blemished repayment records.

Application Approval Process Made Uncomplicated 

You know it all too well; previous financial history and bankruptcies can step in the way of loan approvals and prevent you from gaining funds quickly.

But with a private money lending firm, borrowers can rest assured that the investors will not go digging their past financial records and their repayment histories.

All that a private money lending firm is interested in is the collateral value and down payments. With a high-value collateral asset and a hefty down payment, private money lenders can quickly process loan applications and approve the release of funds within just a few days!

This makes it an ideal financing option for seasoned real estate investors or homebuyers who can’t lose out on real estate deals and need to make that property down payment quickly.

Customizable Financing Options

While banks might not be able to offer custom loans to every borrower, private lending firms indeed can!

Since all banks are federally insured, they need to comply with federal rules and regulations. This is why most borrowers need to undergo tedious paperwork and background inspection to get approved for a bank loan.

On the other hand, private money lenders skip past these technicalities and review loan applications within just a few days. Moreover, these private lending firms can work around the applicants’ requirements, evaluate collateral assets, and draw up loan terms that are feasible to the borrower and the lending firm.

Such custom financing solutions can help borrowers invest in real estate property, buy raw land, develop it, renovate properties, and even put down a downpayment for houses.

A Quicker Funds Approval Process

Since private money lenders aren’t trying to pry out a borrower’s previous financial history, their funds’ approval time is significantly reduced.

The lending firms can quickly review these loan applications, have a look at the borrowers’ needs and their financial obligations, and meet with them to create feasible loan terms that are convenient to both borrowers and lenders.

The Bottom Line

Hard money loans extended by private money lenders can come with high risks and interest rates. However, these private money lenders offer quick, easy, and short-term financing options to real estate investors and homebuyers. On the other hand, banks and credit unions need to review the borrower’s credit history and scrutinize their repayment history with a magnifying glass.

Such thorough financial inspection can cause clients to lose out on lucrative real estate deals. However, a private lending firm can step in, rescue borrowers, and ensure that they make that downpayment in due time.

Whether you’re a real estate investor or an interested home buyer, you can work with a private money lending firm to get the property of your dreams.

At Commercial Private Equity, clients can fill out our application forms, get in touch with our representatives and work out financing terms that align with their needs and conditions.

As a reliable private money lending firm in Atlanta, GA, Commercial Private Equity has made a name in the real estate industry. From offering commercial hard money loans to accommodating clients with our bridge loans, we’re a leading and trusted private money lender on the market!

Get in touch with us to learn more about our commercial hard money loans, bridge loans, and construction transactions.