5 things your clients should know about private lenders

Your most common questions, answered

Using a private lender for the first time can make many buyers nervous. Although it may feel unfamiliar to your clients, the process of using a private lender doesn’t need to be nerve-wracking. Here we address some of the most common queries and concerns we hear: 

  1. Private lenders are safe and well-regulated
    We’re all used to dealing with the bank, so it’s not surprising that some new customers can be hesitant to consider private lenders. In Australia, private lenders are regulated and are subject to ASIC oversight, so clients can feel reassured that their financial situation remains protected when using a private lender.
  2. Faster transactions are due to more upfront terms – not less due diligence
    One of the benefits of using a private lender can be the processing times – generally, a private lender can move a transaction from initiation to completion at a quicker rate than the traditional banks. But this isn’t because the due diligence or paperwork is lacking. Instead, private lenders are invested in making sure a deal doesn’t fall through, and this means making sure it’s the right fit for your clients, too. A private lender will often be upfront with any legal or contractual terms that might be a deal-breaker – so your client’s deal can move faster once everyone is on the same page.
  3. Private lenders can offer flexibility that big banks can’t 
    Flexibility is a pretty broad term, but private lenders can offer a range of benefits that are generally not found with traditional lenders. Reduced paperwork, faster turnaround times, expedited processing, and specialised offers are all part of the package when working with a private lender. For many borrowers and buyers looking to take advantage of a fast-moving opportunity, a private lender can enable an important deal. 
  4. Borrowers in unconventional situations are ideal private lending clients
    It’s no secret that banks are risk averse. Many prospective buyers quickly run into a wall when seeking financing from traditional lenders, and this is where private lenders can bridge that gap. Generally, buyers in need of private financing are looking to close a deal without cashing out their existing assets. New businesses, small business owners, property developers and property investors looking for an unconventional property can all benefit from a private lender. 
  5. Private lenders can meet your needs for specialised loans
    Customised, specialised lending scenarios are possible when dealing with a private lender. Having the luxury of flexibility means your private lender can help find the right deal for your situation. Whether your client needs to jump on an incredible real property opportunity, purchase an investment while waiting to sell an existing property, require cash out or just get back in the market after some financial struggles, a private lender can work to build a deal that is unlikely to be found with a traditional lender.