A credit score is more like a SAT score. Those with high scores will be able to get easy approval from the banks and other financial institutions, while the ones with a poor score will keep missing out on opportunities.
But the thing about credits cores is that it could get worse even if you work really hard to maintain them. There are situations beyond your control and you could end up defaulting on your payments. For many borrowers, a poor credit score is just inevitable.
This is why it is important to look beyond banks and credit cards, especially if you are running your own business or are an active investor. One of the best alternative sources of financing is private money lenders.
Who are private money lenders?
Private money lenders are businessmen and investors willing to lend money in order to earn higher interest on their savings. They provide loans backed by hard collateral and their loans are usually given out for business purposes only, unlike car or student loans.
They do not have any connection with banks or any other financial institute, and make their own terms when giving out a loan.
Private money lenders may give out several types of loans including hard money loans, bridge loans, mezzanine debt and joint structure financing.
Benefits Of Financing With Private Money Lenders
Although a private money lender charges a higher interest than a bank, there are several advantages of financing with private money lenders:
No credit score required
Since loans provided by hard money lenders are secured with hard collateral, they do not require borrowers to have a good credit score. Any borrower with a poor credit history can easily obtain a loan from private lenders, but they do need to have good and realistic exit strategy.
Private money lenders are not regulated by banking or government policies, so they usually provide very quick approval on the loan.
An approval can generally be obtained within 2 days and sometimes within hours if the lender knows the borrower well.
Private money lenders structure the loan on their own terms and generally provide very flexible terms to the borrower.
Private money lenders have a business mind and consider the loans that they are giving out to be more of an investment. This is why their loans are structured in a way that is best for the project. Private money lenders are also open to renegotiation if the needs of the borrower change during the course of the engagement.
Looking for a private money lender?
If you are looking for a private money lender, then get in touch with GCP Fund. We are one of the leading private money lenders in the country and have over $2 billion in transactions.
We provide loans to a number of industries including real estate, agriculture, construction, power and energy, leisure and retail.