Here’s why investors decide to use private loans over bank loans.
I often get questions asking why people would choose to borrow privately instead of getting a bank loan with a lower rate. Today I’ll explain what we offer our clients and why they typically choose private money loans over bank loans.
If you’ve ever gotten a bank loan, you understand that they put you through the “wringer”. They will make you answer all sorts of questions about the purpose of your loan, your life history, your business, and just about every financial decision you have ever made. Banks will put you through an underwriting process that is time consuming and can make your life miserable.
On the contrary, as a Private Money Lender, we use a common sense approach as well as basic fundamental underwriting principles. We look at loan-to-value ratios, the location of the property, the overall strength of the borrower; we simply determine whether the deal makes sense. We do away with banking “red tape” and we use logic to underwrite transactions, which makes the whole process quicker, simpler and much more efficient for our business-minded borrowers. That’s the main reason borrowers choose private loans over going with a bank.
“As a Private Money Lender we use common sense and basic fundamental underwriting principles.“
In addition, private money can be much more flexible. You can do things like cross-collateralize on multiple properties, hold money back in fund control for future improvements or renovations, or simply close a loan in 7 days. Private money offers endless possibilities for borrowers needing flexibility, speed and efficiency.
For borrowers that are business-minded and savvy, private money makes a lot of sense, and it makes their life a lot easier. There’s a misconception that our clients have poor credit. In fact, the vast majority of our clients have credit scores in excess of 700 and great reserves. We have very bankable clients, but they choose private money because it’s fast, efficient, and it makes sense.
If you need a private money loan or if you have any questions, give us a call. We look forward to hearing from you.