Why Private Money?

With private money loans, private individuals fund deals based on the value of the property. In contrast to conventional lenders, they are required to follow federal government guidelines. So private money lenders don’t require the same rigid qualifications as traditonal lenders do and can offer more flexible loan terms.

Private money deals mean that the property itself is the main focus and is use as the collateral. The ability to repay a private loan is the other consideration.

Flexible underwriting and quick funding also adds more risks for the lender.  So private money loan rates are usually higher than traditional banks. Nevertheless, many business owners and real estate investors prefer access to fast funds of a private money loan rather than a prolonged loan process just for a slightly lower interest rate.