Choosing between a bank lender versus a private lender isn’t always easy, especially when you’re new to commercial real estate. But the right choice makes all the difference when you find a strategic property and manage to close the deal on it. Research has shown that 29 percent of small businesses fail because of a capital shortage.
Private lenders can help you generate income and avoid many hurdles associated with a commercial loan from a traditional lender. Here’s what you need to know about the advantages of getting a mortgage loan from a private lender.
Some investors struggle more to maintain a strong credit report. It can take considerable time to build a good credit score or bounce back from a low one. If you fall in this category and your credit history isn’t something that you’re proud of, private lenders might suit you well.
A financial negative can increase the chances of your application being rejected by a traditional lender. But private mortgage lenders aren’t concerned with credit scores. They’re more focused on your property’s value as your real estate, or investment is put up for collateral.
Since they have more room to select their beneficiaries, private lenders can afford to take risks. In either case, you’re given a fair opportunity to secure a mortgage loan.
Ability to Meet Deadlines
The private lending process is much quicker and less stressful, as they’re not bound by the same filing regulations that banks abide by.
You can secure financing much sooner than you would if you applied for a traditional loan. If you have a working relationship with your lender, it can make the process more efficient as they’re already aware of your background.
When you apply for a mortgage loan from a private lender, it can help you create a mutually beneficial relationship with them.
If you complete your obligations, respect your lender’s contractual terms, and show them that you’re a valuable beneficiary, you can pave the way for your company’s prosperity. You can be exposed to countless investment opportunities that can help you meet your financial goals.
One of the most valuable takeaways from the commercial real estate industry is that it’s all about timing. You might come across an opportunity that requires you to act quickly to secure a property.
In this case, you can’t afford any delays, which are all too common in the traditional loan process. Private lenders have a much more straightforward approach. They won’t use a fine-tooth comb to assess your paperwork and applications, unlike a conventional bank.
Looking for a commercial mortgage lender that guides you throughout the loan process? GCP Fund offers construction financing, hard money loans, mezzanine loans, bridge loans, commercial financing for development, with over 40 years of combined experience! Get in touch with us today to close commercial property deals quickly and easily!