There are many misconceptions and rumors about private money lending. No one knows the real facts about this type of lending. I want to write about myths on private money lending and original facts. Although it is long procedure but I gather main points about it and explain them step by step.
First myth is that private money is too expensive. The fact is that private money is more expensive but is only one factor when assessing your lending options. It will cost more than traditional bank loans but is priced according to the law of supply and demand. Second one is no private money lender can fund in less than a week. This is absolutely wrong about private money lending. There is no hard and fast rule of days of funding. If the borrower is organized and diligent in providing the documents to money lenders then no need to wait. They will fund borrower in short time typically less than a week.
Third is that most borrower seeking private money loans are desperate and turn to private money loans as a last option. It is also incorrect observation about borrowers. Most hard money borrowers are solid, successful individuals that are in a situation or are presented with an opportunity that does not fit easily into the rigid structure of institutional lending. Therefore they apply for hard money loan for convenience. They set the rules and regulations which best suits their business needs.
Fourth myth is private money lenders are a bunch of dishonest loan sharks. It is correct that some black sheep are present in this business but mostly not. Most principals in hard money lending organizations are successful business people with backgrounds in law, accounting, banking, real estate development or real estate investment. They provide a needed service, especially in today's economic environment.
By considering all facts about this business one should easily understand the reality and make the difference between myths and original situation. I would suggest if anyone wants a loan for his business in short time and with minimum documentation then he should apply for hard money loan. It would save his time and money and soon he will in a position to continue his business.