Why Should Borrow from a Private Lender

Not everyone relies on banks or credit unions to borrow money anymore. These days a lot of people are turning to private lenders for loans of all kinds. There are a multitude of reasons to consider this borrowing option. When you take the time to learn about these benefits, you will be able to make the right decision. No matter what type of loan you need, there is a good chance that a private lender can help you out in a big way.

Streamlined Process

One of the best reasons to borrow from a private lender is because you can get the money you need a lot faster. Private lenders tend to disperse funds to approved individuals within 24-48 hours, which is a lot quicker than most banks. If you were to get a traditional bank loan, you could wait up to 2 weeks to receive your money. Even just getting an initial response from the lender is much faster when you go the private route. Some banks can take up to a week to give you a response to your application.

Everything is Done Online

A majority of private lenders are based online, which is a good thing for many reasons. This makes the process of getting a loan much more convenient and streamlined. You won’t have to deal with any annoying physical paperwork that you then have to turn in. All you have to do is find a lender and submit an application on their site.

The whole process takes less than an hour. It’s also very simple and straightforward with no frustrating extra steps to follow. You will be guided through everything step by step, so there’s no confusion whatsoever. If your application is approved, you will most likely be notified via email. You’ll receive a digital copy of the loan contract to sign. Make sure to look it over very carefully before signing.

Your Credit Won’t be a Big Deal

You will quickly find that most private lenders don’t really care all that much about an applicant’s credit score. Instead they look at other things, like your job history and income. You can easily get a loan from a private lender if you have bad credit. The fact is that a lot of banks won’t even consider giving someone a loan if they don’t have a near perfect credit history. This is just one of the reasons why so many people are turning to private lenders for loans. If you have been turned down by a bank, this is the next logical step to take.

There are Some Amazing Deals to be Had

When you start shopping around and looking into your loan options with private lenders, you’ll discover many great deals. The most effective way to get a good deal on a loan is to closely review your options. You can do this by prequalifying with different lenders and looking for ones that have a good overall reputation. Some private lenders are more flexible than others when it comes to matching their borrowers’ needs. Despite what you might have been told in the past, not all of these lenders are out to rip people off.

Fewer Penalties

The average private lender charges fewer penalties, so you won’t get charged anything for prepayment or early repayment. If you want to pay off your private lender loan early, you can do so without facing any negative consequences. While paying back your loan early might not do anything to improve your credit, it is still a good idea. There will still be a penalty for being late on your loan, but that is just to be expected.

The Personal Touch

Many private lenders place more emphasis on taking care of their customers than big banks. This means that you will likely be able to get the help you need with minimal hassle. Dealing with banks can be incredibly frustrating for many reasons, which is another reason why private lenders have become so popular. You’ll discover that a lot of these lenders make a point to provide 24/7 customer support via live chat, email chat and even telephone. The better the customer support is, the easier it will be to get answers to any questions or problems you might have.

Borrowing from a private lender is a good idea for many reasons. If you are currently in need of money, you should at least think about this option before deciding. Getting a loan from a bank can work, but it’s not nearly as convenient or efficient as the alternative. Private lenders tend to care about their customers more. There are tons of these lenders to choose from, so you’ll need to do some research before deciding who you want to get your loan from.

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8 Common Reasons Small Business Loans Get Rejected

There are plenty of different reasons why your small business loan application could get rejected. Many of these reasons are entirely preventable in one way or another. No person’s application is guaranteed for approval, and there is a lot that can go wrong. When you learn about some of these reasons, you can increase your chances of getting the money you need. Whether you want to expand your business or get through a difficult time, this information can help.

  1. You Don’t Have Good Enough Credit

One of the most common explanations for a rejected small business loan application is bad credit. This is just one of the things that most lenders look at when deciding whether or not to approve a loan application, but it’s very important. If you have bad credit but still need a loan for your small business, you might want to choose a private lender. Most private lenders don’t care about an applicant’s credit as much as banks.

  • Lack of Experience

If your business hasn’t been around for very long, you could have trouble getting a loan. The more experience you have as a business owner, the better your chances will be. Lenders look at how long the business has been around, because it’s an indication of its future. There isn’t much you can do about this except finding a lender that maybe doesn’t care as much as others do.

  • Your industry is considered risky

There are certain types of businesses that lenders look at as high risk because of how difficult it is to survive. For example, restaurants are considered risky because they are very challenging to keep afloat for very long. If you have such a business, you should look for a lender that specializes in giving loans to people in your industry. This can significantly raise your chances of getting approved for the funds you need.

  • High or Low Debt Utilization

If your debt utilization is either too high or low, you could run into problems when trying to get a small business loan. Those who tend to utilize their credit too much can be viewed as high-risk individual who may not pay back the loan. If you don’t use your credit enough, the lender might not be sure what to think. This is all the more reason for you to be responsible with your credit and take a middle-of-the-road approach.

  • You Don’t Have Sufficient Collateral

These days a lot of lenders require collateral for small businesses loans. If you don’t have many assets to use as collateral, your application could get turned down. Take a look at all of your assets before applying for a loan. You can also try to get funds from a private lender who doesn’t require any collateral. Just keep in mind that unsecured loans usually come with a higher interest rate, but it might be worth it.

  • Inadequate Cash Flow History

When you apply for a small business loan, you will be required to submit proof of your income for at least the last year. If the lender decides that your cash flow is inadequate, they will most likely deny your application outright. You should consider taking some steps to rectify this issue, such as keeping better track of your money and finances. You can also use software to create reports on your cash flow every single month. This could be enough to help you get the loan you need next time.

  •  You’re Requesting to Borrow Too Much

You need to figure out exactly how much money you require and whether or not you can afford to pay it back before applying for a loan. One of the more common reasons that businesses get denied for a loan is because they ask for too much. If the lender decides that you cannot reasonably pay back the money on time, they won’t give it to you.

  • Application Errors

A seemingly simple or small mistake on your loan application could really cost you. It is very important that you take the time to go over your application at least two times before submitting it. Make sure that you have filled out all the required fields. All of the information you submit needs to be completely accurate and up to date. You should never try to lie about anything on a loan application, because it will only backfire.

Anyone who is trying to get a small business loan will need to remember all of the things mentioned in this article. Not everyone who applies for these loans gets them, but there are many ways to increase your chances for approval. The more careful you are about this whole process, the more likely you’ll be to get the funding you need for your business.

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