July 18, 2024

Private Loans for Business Owners

Non Conforming Lenders and Private Lenders can solve the cash flow problem of business owners with the help of a private loan (sometimes referred to as a short-term 1st or 2nd mortgage or a Caveat Loan). The loan is ideal for business owners because:

Bank style credit approvals are not required

Tax returns are not required

Interestingly, a private loan is not only right for a business owner but it can also be beneficial to a property developer or an investor.

Private Loans – Definition

They are fast settling loans, which are structured for a short-term of usually between 1 to 12 months, with a possible rollover (if required).

How does a Private Loan work?

These loans are simply an ‘asset lend.’ For private loans, all you need is to be the owner of a piece of real estate. Here is a list of residential, commercial, industrial or specialised securities that the loans are commonly secured against:

A home or a unit if owned by a Company or Trust

Vacant land / Development

Medical centres

Child care centres

Commercial properties\

Land Bank

Rural land, farmland or agricultural land

How are Private Loans Structured?

They are structured just for a short-term of 1 to 24 months period and generally have a “fast-settlement” compared to Bank funding.

What is the Loan Exit Strategy and how are Private Loans Repaid?

The loan exit strategy is where the borrower agrees to pay the loan back to the lender/credit provider at a predetermined time (usually between 1 to 24 months).

The repayment of the loan can be done by one of the following methods:

You can refinance the loan

You can sell the asset

You can use any business cash flow or commissions due to you

What Reasons do Business People Choose Private Loans?

Here is a list of many reasons (scenarios) why business people choose a private loan:

A common use of the loan is if business people require funds for bridging between the selling of a property and the funding of an urgent requirement

Having the required cash flow in hand by way of the loan has helped many business people to pay off their debts and thereby enabling them to go on with the running of their business

It may be that business people want to expand their business, and they need additional funds to enable them to full fill their business goals

They may want to attend an auction and the need to transfer the funds right after the auction ends

They may simply have a business deal that is too good to let go, and they currently do not have the required cash to pursue this business deal.

Private loans can help you with any unexpected urgent commercial debts that you have to pay before any legal process is taken against you (e.g. default or court judgement) or before you are charged with late fees.

Non Conforming Loans helps business owners in securing finance for their business. The firm’s expert finance brokers will help you in securing a private loan as well as help you in obtaining easy business finance and short-term business loans.