Private lending is a business model in which one company lends money to people and other companies that are having trouble getting their loan requests approved by conventional loaning services. Recent studies have shown that more than 80% of businesses that fail to get a loan are denied because of inconsistencies in their cash flow. A hard money lender makes sure this never happens.
Many people are generally wary of hard money loans, but this has more to do with the myths and misconceptions than it has with reality. By the time you’re done reading these benefits of hard money lending, you will start viewing private lending as a viable option to keep your capital flowing.
1. They Are Less Stringent than Traditional Lenders
Often, banks and other lending companies have stringent rules and criteria for loaning money out. For example, they first have to verify your income, decide how much they can actually loan out, and then process the loan. It is not uncommon to be rejected flat-out.
This is what makes going to a hard money lender a better idea. Their terms are often less strict than a bank’s and hardly ever fail to give your business the money it needs. Often, they loan out enough to cover the full value of the property.
2. It Takes a Shorter While to Close the Deal
Banks tend to take as much as 30 days to grant your loan. If you need the money urgently, this may not be the best option for you. A hard money lender, on the other hand, is known for quick approvals. Sometimes, all it takes is a couple of days to grant you the loan. Instead of waiting for your loan to be approved by the bank, going to a hard money lender will help you seal investment deals faster.
3. They Are More Convenient than Traditional Bank Loans
Although traditional bank loans may have lower interest rates, they come with a slew of exhausting processes such as income documentation, tax returns, and bank statements. This makes taking them a drawn-out and convoluted process. A hard money lender has a much less problematic lending system.
This is because many hard money lenders understand the value of providing quick cash, and thus only require a promissory note and a deed of trust before signing the money out to you.
4. They Don’t Have any Hidden Charges
Banks may mention all the charges you will receive, but other expenses often get hidden in plain sight. By contrast, private money lenders make a point of maintaining transparency, especially when it comes to explaining their interest rates and service charges. This ensures that you know precisely what financial agreement you are getting into.
Hard Money Loans and How They Can Build Your Business
Many real estate agents are familiar with the frustration of waiting for a bank loan. A hard money loan may help you make purchase properties at a faster rate since private lenders are open to helping out in such situations. Are you ready to contact the hard money lender you can trust? Rely on Hard Money Georgia for more information.