These days, borrowers looking to increase their assets and grow their business have more financing options. For instance, borrowers can choose to borrow from a traditional bank or a private lender. But borrowing from a private lender is continuing to gain popularity among investors. That’s because it offers plenty of benefits over the traditional banks, including easily getting a home equity loan with bad credit.
In this article, we are going to discuss some of the top reasons you should consider a private equity lender over a traditional bank. Keep on reading this piece to explore them
- Fast funding
This is one of the incredible reasons why you should choose private lenders bc instead of a traditional bank. When you apply for a traditional bank loan, it can take weeks just to process your loan. But what if you need the money as soon as possible, what do you do? That’s where a private equity lender comes in. They specialize in residential lending and so you can get your money as quickly as possible. Most of these professional private equity lenders can get you the money in a few days or hours.
- Flexible loan terms
As a business owner, you know how consistently your business is adapting to the changing market circumstances. Traditional banks and other financial institutions are not quite flexible. They also generally take a one-size-fits-all approach to all requests. This isn’t the case with a private money lender. These private lenders are more flexible than a traditional bank when it comes to loan repayment terms. They can tailor loans to specific needs that are beneficial to both the lender and the borrower. And of course, greater flexibility generally leads to better outcomes.
- No prepayment penalties
Even the best-laid plans can sometimes change. Sometimes your business may not do well, forcing you to miss a repayment or make your payments late. If this happens when you have borrowed money from a traditional bank, you will be penalized. To make it worse, some banks charge hefty penalties. But with private equity lenders, they are fully invested in your success and typically structure their loans without prepayment penalties or any added fees. This is why a private equity lender can contribute to the success of your business.
- Less documentation required
Traditional banks generally require more documentation before they issue a loan. This will not only consume the borrower’s time, but it is also hectic. If you urgently need the money and don’t have more time to waste, then a private equity lender is your go-to person. Private lenders generally aren’t interested in every aspect of your financial life. They offer asset-based financing on qualified collateral.
- You don’t have to worry if you have a poor credit score
Traditional banks usually check your creditworthiness to determine if you qualify for a loan. So if you have a poor credit score, your loan application may be denied. This isn’t the case with private equity lenders. As mentioned above, they offer their loans based on qualified collateral. There are plenty of private mortgage lenders for bad credit.