Small to medium-sized companies often struggle to acquire bank loans for their financial needs because banks generally prefer to invest in businesses with perfect credit histories and guaranteed return on investment. Additionally, the set of rules set by banks is unfavorable for many private borrowers and business owners. The stringent conditions of bank loans keep many innovative entrepreneurs from establishing their businesses. This is where direct lending options come in. They cover a wider range of businesses and allow real estate investors to capitalize on valuable investment opportunities. Here are some more features about this form of short-term financing and its various benefits.
1. Desired Terms
The terms of a direct lending solution vary from one deal to another. The parties involved in the transaction can alter the contract based on their needs. It allows the borrower to manage the financing in a feasible way. Property investors avail of these financing options often, especially when they expect guaranteed returns on the investment.
2. Documentation Needs
When applying for a bank loan, borrowers have to provide extensive documentation. This process can take months for some borrowers and can be highly inconvenient. Many hard money loan providers have in-house underwriters that reduce this hassle for their clients.
3. Time Constraints
Most lucrative opportunities require quick action. Just a few days delay can cost investors millions of dollars in profit. Asset-based lending and other direct lending solutions reduce these risks and help investors earn higher profits.