It is obvious that when you are in business and trying to get financing from the bank, you have to come up with a unique and winning business plan; one that the bank will see as less risky and more feasible. Most financial institutions will grant financing if you do take the time to get your business plan to the point where it will convince them that you won’t pose any risk with your business venture. If not, private business lenders and banks will be reluctant in providing you with financing for your business unless you provide an asset or collateral to put up.
The Approval Rate
The approval rate is usually below 25% for most business owners that go to the traditional financial institution for a loan. However, if it is a private business lender, the approval rate is much higher because there are fewer requirements. Fortunately for the business owners that take the unconventional approach, there is much more room for securing a loan in a private institution. Of course, some of the private business lenders are angel investors and venture capitalists, but these options are uncertain in comparison to hard money lenders that offer equity financing. This means you use assets against the loan to improve your chances for approval. So, this is one primary way that you can use private loans as a viable substitute to traditional lending.
There has been quite a demand for private lending as it relates to business owners trying to find the ideal funding. For one, there are fewer strict requirements and these loans are short-term, which means that it is easier to pay off. While you can get a small business loan through the Small Business Association or using a line of credit through your mortgage company, it is probably less restrictive to use a private lender so you don’t have to depend on your credit history.
There are so many advantages to obtaining a private business loan as specified above. Before you approach a traditional lender, you should consider one of the best private business lenders in the industry.