Private Financing

When borrowers don’t fit within traditional lender guidelines and we have exhausted all institutional (bank) options for them, we turn to our select group of private lenders. Private lenders are often individual investors who lend money for properties for either purchase or refinance, to tap equity or simply to pay off a loan that is due.

We, as a firm, do not lend money; we shop among our individual, private-lender contacts to gauge interest on a particular loan. We also work with larger firms, which include pools of investors within those companies. These firms are often a good match for larger loan amounts—those above $1,000,000.

Private financing is based on lower LTVs, coupled with higher interest rates and additional fees. Think of this as last-resort lending, where rates can start at 8% and go up from there. The more flexibility you want a lender to offer, when it comes to relaxing guidelines like credit scores, etc, then the more cost incurred for that flexibility. Indeed, borrowers who turn to private money for financing are often those that have credit scores on the low end and an institutional lender has turned them down for that or other reasons. Private financing is a very useful tool—a stepping-stone to get into a property or secure cash against an existing property. It should always be viewed as a temporary solution with the borrower having an exit strategy. I can assist borrowers with advice on realistic exit strategies and timelines for such.

Generally speaking, a private lender is looking for strong equity in a property. Each transaction is case by case and rates can vary depending on the transaction. Contact us for a quote. We can arrange financing for all property types, including land.