How Does Private Money Lending Work?

February 4, 2021 Penelope Roberts 0 Comments

Private money loans are a streamlined form of the traditional financial institution provided lines of credit. They originate from a private lender rather than a brick and mortar bank like Citi or Chase, however, these private money lenders offer unique flexibility and many advantages over the alternatives. Private money lending has become a staple of the financial landscape that borrowers navigate while shopping for the best deals on debt consolidation or home loan applications. In addition, many businesses are beginning to rely on private money lenders for their startup cash rather than looking for an investor who will require a share of the profits and ownership in lieu of regular monthly payments.

Private Money for Small Businesses

Small business owners in the United States are turning more often to private money lenders as they learn how to start an import/export business from home or build a distributor chain from their living room. Export businesses are booming in the current climate as more and more buyers are looking for fast ways to track and receive packages.

With the double-edged sword of Brexit finally hitting the European Union and Britain, and the coronavirus making travel and mailing harder to facilitate, import/export businesses are thriving as individual business owners are finding innovative solutions to deliver the products that buyers all over the United States and the world are seeking at a hastening rate. Borrowing the startup capital from a private money lender is a great way to cash in on international trade and supplier shortages in the immediate future while creating a cash flow model that will help you quickly pay off your debts as profits begin to skyrocket and remain high. Small businesses take full advantage of the benefits of this quick funding, and so too do real estate investors and those moving into their new homes.

The Real Estate Market

Real estate is another space in which a bridge loan lender in Oregon offers a unique advantage over the competition. Private money lenders give future homeowners quick access to favorable interest rates and faster funding because they don’t have to adhere to the lumbering corporate infrastructure that governs large banking institutions. By rewriting the relationship between lender and borrower, private money lenders are able to get you the cash you need in a hurry and at a great rate.

A mortgage is a long term relationship that is often made far more complicated by the reckless amount of paperwork that has traditionally been associated with the application process. By cutting this red tape and giving you a direct line to the decision-makers, these private bankers allow for a better working relationship throughout the life of the loan and a faster advance into the next step of the buying process for borrowers who are looking for good news on their application status.

Debt Consolidation

Real estate investors and other borrowers also utilize this branch of lending in order to consolidate debt as well. Borrowers love the streamlined lending process that gives them access to low-interest lines of credit that can be used to pay off higher interest credit cards or other sources of capital debt—like a medical bill or student loan. Buyers come in all shapes and sizes, but private money institutions are often willing to work with people of all types of credit histories in order to provide them with the funding they need to consolidate their debt and get a firmer grasp of their financial future.

Private money is a major panacea for the borrowing community in pockets all over the United States. Whether you’re a first time home buyer or looking to expand into a new business niche, looking into this funding option might be the perfect solution for you.