Alternative lenders, like trust companies, have often been the mainstay for entrepreneurs and for clients with credit challenges. But as the number of lenders contracts and qualifying rules become more prohibitive, a whole new group of private lenders are entering the Canadian marketplace to meet a distinct need.
Contrary to popular belief, not all private lenders expect big fees and high interest rates. Because The Blake Wilson Group works with many self-employed individuals, we have developed strong relationships with a pool of private lenders across the country and can quickly identify the right private lender for our clients.
If you’re interested in learning whether private lending is a fit for your situation, we’re happy to chat. In the meantime, here are some private lending basics:
- Qualifying criteria: Traditional mortgage lenders are interested in your credit history, your debt level, tax returns, etc. A private mortgage lender is most concerned with the appraised value of the property.
- Quick closings: The key to a quick close is having your financing arranged quickly. A key benefit of working with a private lender is their ability to review, approve and fund your deal quickly.
- Terms of the loan: Private loans are for short periods of time, usually no more than two or three years. The goal of private lending is to give you access to capital in the meantime, until you are in a position to qualify with a traditional lender.
- Great for investors: Because private lenders are more flexible with their funds, they will often look at fixer-upper rental properties with a keen eye making them a good fit for investors and individuals seeking financing for a “less conventional” purchase.
- Diverse repayment options: This is especially helpful for entrepreneurs. Because private lending is flexible, payments can be structured creatively and tailored to fit your needs/business cycle. If your business anticipates a slow season, alternative payment arrangements can be made. Private lenders will also consider interest-only payments and balloon payments at the end of the term or upon closing of a sale.
Private lenders are a great option for entrepreneurs and investors and shouldn’t be dismissed. Using them means building a relationship so you can fund other purchases in the future.
Book an appointment to discuss your situation and goals, and we’ll help determine if a private lender is the right fit for you.
You Dream It. We Finance It.