You may be unable to get a loan from a bank or a credit union due to many reasons; your credit score may be poor, you may lack the required collateral, the documentation requirements may be too rigid or you may not just have the right profile. Sometimes even the asset that is required to be bought by you with the loan may not meet with the approval of the lender. However, you may still be able to approach a private money lending firm to buy the asset. Even though the cost of a loan from a moneylender tends to be higher than that of a bank loan, there are still a number of advantages that you could benefit by:

Enables You to Make Purchases That Are Non-Conventional

Private moneylenders are fully aware of the various limitations of bank credit and they aim to plug the gap by dealing with customers who typically, may not be able to access bank credit. Private moneylenders like are more focused on the income or profit generation potential of the asset sought to be purchased by the customer than its current value. These are the very assets that banks don’t want to finance because they cannot be taken as collateral to the loan. Private moneylenders thrive on such opportunities; for the extra risk they take, they are rewarded with better interest rates. If you do want to take a loan, but banks are not interested, then try approaching a BBB-approved money lending firm for a quick and easy loan approval.

Poor Credit May Not Be a Disqualifier

All lenders like to place importance on your credit score, however, unlike banks; private moneylenders are very flexible about it. They can appreciate if your credit rating has taken a beating due to ill health, loss of employment, divorce, bankruptcy, etc. For most moneylenders, the quality of the asset being bought and a realistic evaluation of the applicant’s capability to pay back are more important than a credit score. This means that unlike banks, moneylenders are not so rigid about credit scores; as long as you have reasonable collateral and a solid business plan, they are more than happy to extend a loan.

Quicker Approval

While banks have a very structured process for a loan approval that can often take weeks to complete with extensive documentation requirements, private moneylenders typically act faster to approve the loan. This is possible because the loan approval revolves more around the potential of the asset and the repayment plan rather than the documentation paraphernalia. Private moneylenders are also less encumbered by their management structure, unlike banks.

Conclusion

While one does appreciate that private moneylenders can usually be more expensive than banks, it is also true that you can work better with moneylenders to negotiate the terms. With the increased flexibility, it is possible for you to borrow and get out again very quickly; the amount of profit you can make with these quick deals makes the interest cost almost meaningless. With banks, this kind of turnaround speed is next to impossible.