HOW COULD ALTERNATIVE LENDERS BECOME CRUCIAL FOR YOUR SUCCESS?
Traditional bank loans are now a secondary thing, as it has become very complex for the banks to lend money to the real estate investors due to several reasons such as compliance costs of multiple Acts. Furthermore, low-interest rates and below average conditions in real estate markets have further made it complicated. Not only real estate investors, but small-business owners, developers, and many more have been affected and facing difficulties to borrow money from banks. Additionally, if a bank grants a loan, it is usually lower than the development costs.
On the other hand, the private lending industry has grown by leaps and bounds, doubled to be more precise in the last decade. Since the year 2016, it is estimated that almost 80% of loan applications from small-businesses have been rejected, which helped the private lenders to get a good chunk of the market to offer their services. If you’re a mortgage originator, this phenomenon can profit you a lot, as you can grab all these opportunities from the ongoing shift in the lending industry.
Usually, these alternative lenders are not subjected to all the strict norms that most banks have to adhere. This makes the alternative lenders to play a much more free hand while lending money as they can free up some rules of their business process. The best thing with alternative lenders is that you can expect a very speedy process, as they can simply offer you an answer about their decision. Most of these alternative lenders generally make a loan decision within 48 to 72 hours. Furthermore, most of the private lenders have cash readily available to deploy if they approve a loan. Private lenders are also more flexible with your credit score, which makes them a much better option.