Toronto Private Lenders

What is private lending?

When considering what Private Lenders are, think about regular banking institutions... any entity that is not a traditional banking institution can potentially be Toronto Private Lenders. A close friend, hard money lenders, a relative, a private company, accredited investor or even an established private corporation can be Private Lenders. These private lenders are considered relationship-based and are not regulated like regular banks are. Toronto Private Lenders are people that have access to money but are only willing to take a risk on borrowers that are focused on real estate purchases or land purchases, as the property or real estate IS the collateral (providing a sell-able security to the lender). But, these lenders do perform some financial background checks, credit checks and other means of establishing an accurate, financial standing of the borrower.

How does private lending work?

Private Lenders are not hampered by the same laws and regulations that normal banking institutions are tied to, so with less constraints comes more freedom to approve loans and ventures. Private Lenders do charge more fees and higher interest rates then other regulated entities, but they do offer a wider swath of services and have a higher approval rate with borrowers' applications. There are basically two types of Toronto Private Lenders, those that are hard money lenders (professional organizations that specialize in high risk loans) and those that do not regularly offer private loans (colleges, friends, relatives, etc.). If considering a close friend or relative, it is always wise to put any monetary agreement in writing, set realistic terms and pay out date of the loan (this protects both the lender and the borrower).

How can private lenders offer customizable credit solution?

The Private Lenders that are referred to as hard money lenders tend to be the better choice for borrowers' that want a solid, professional lending relationship that offers standardized fees, interest rates, short loan terms and established costs. There is more peace of mind with a private, professional lender as they do have access to larger sums of funds that are willingly loaned out to the right ventures and investments (sometimes hard money investors have multiple investors that are dealt with for financing). Another upside to Private Lenders is their efficiency when dealing with both short term and long-term investors (requiring quicker access to financing with potential refinancing down the road through a conventional institution), property & real estate flippers (buy, renovate & sell quickly) and so on.