The world of lending took a major turn for the worse for many businesses in the wake of the 2008 financial disaster. As new laws and lending requirements were crafted in response to that crisis, businesses suddenly found themselves having trouble obtaining the cash they needed due to more severe loan guidelines. Sadly, many could not even qualify for the smaller loans that used to be easy to obtain. As a result, many in Seattle, WA have turned to the private money lenders Seattle has in abundance.
This is especially true for real estate purchases designed for resale. Many of these brokers struggle to obtain the financing they need when they need it. Often times, they can be forced to watch as properties are sold to others while the bank goes through its lengthy approval process. Banks, required as they are to comport with federal regulations, simply are not equipped to make the type of rapid loans these real estate brokers need to ensure that they have the capital on hand to make deals quickly.
Fortunately, private loans can fill that need. This is possible due to the fact that such loans are offered using different rules than banks, meaning that the qualification standards used for borrowers are less intense. Since capital is provided by funding companies and investors, there is a greater degree of liberty in who they can lend to and how quickly those loans can be processed.
That doesn't mean that these companies escape the ordinary licensing requirements, of course. They must follow those laws and others that govern most lending firms. Their true freedom lies in their ability to avoid the regulations that tend to make underwriting most loans so difficult for the average loan officer. That's a tremendous relief for the borrowers they work with.
By working with these investors, brokers gain the ability to quickly gain access to the funds they need to facilitate deals in the most advantageous time frame. This easy access to capital helps to ensure that they can not only close more deals, but can also take advantage of the discounts that are often available in those rapid transactions.
In addition, these loans usually require no credit checks, making them a much more accessible funding mechanism for new businesses that may lack the established credit needed for bank loans. That can also benefit borrowers who may have experienced recent credit score reductions or other problems that would usually preclude a typical loan.
Brokers should, of course, recognize that this lending typically comes with higher interest rates. For most, however, that is a small price to pay for the clear advantages the loans provide. In addition, closing discounts and the availability of steady and reliable cash flow can more than offset any higher costs associated with those increased interest rates.
The fact is that these investment sources can be a critical part of any successful real estate broker's strategy for success. Given the obvious abundance of advantages and the fact that there are very few disadvantages, any broker struggling to obtain consistent financing would do well to consider using this funding method.
This is especially true for real estate purchases designed for resale. Many of these brokers struggle to obtain the financing they need when they need it. Often times, they can be forced to watch as properties are sold to others while the bank goes through its lengthy approval process. Banks, required as they are to comport with federal regulations, simply are not equipped to make the type of rapid loans these real estate brokers need to ensure that they have the capital on hand to make deals quickly.
Fortunately, private loans can fill that need. This is possible due to the fact that such loans are offered using different rules than banks, meaning that the qualification standards used for borrowers are less intense. Since capital is provided by funding companies and investors, there is a greater degree of liberty in who they can lend to and how quickly those loans can be processed.
That doesn't mean that these companies escape the ordinary licensing requirements, of course. They must follow those laws and others that govern most lending firms. Their true freedom lies in their ability to avoid the regulations that tend to make underwriting most loans so difficult for the average loan officer. That's a tremendous relief for the borrowers they work with.
By working with these investors, brokers gain the ability to quickly gain access to the funds they need to facilitate deals in the most advantageous time frame. This easy access to capital helps to ensure that they can not only close more deals, but can also take advantage of the discounts that are often available in those rapid transactions.
In addition, these loans usually require no credit checks, making them a much more accessible funding mechanism for new businesses that may lack the established credit needed for bank loans. That can also benefit borrowers who may have experienced recent credit score reductions or other problems that would usually preclude a typical loan.
Brokers should, of course, recognize that this lending typically comes with higher interest rates. For most, however, that is a small price to pay for the clear advantages the loans provide. In addition, closing discounts and the availability of steady and reliable cash flow can more than offset any higher costs associated with those increased interest rates.
The fact is that these investment sources can be a critical part of any successful real estate broker's strategy for success. Given the obvious abundance of advantages and the fact that there are very few disadvantages, any broker struggling to obtain consistent financing would do well to consider using this funding method.
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