When I tell people in social situations that I am a private hard money lender the first question out of their mouths usually is ” oh, how much do you charge ?” When I tell them that many of my borrowers pay in excess of 10.00% they just can’t believe that I can do that. “Why don’t your borrowers go to the bank?” they ask. Well, you know, if you are searching for money loans on the internet you usually already have tried that route and you know the answer to that one! Banks today just aren’t lending to real people, real people who have had many of the normal problems and issues in their lives that most of us have experienced from time to time. Or the borrower is a small business person who always paid his or her bills on time but can’t provide the banker with 3 year’s worth of tax returns showing real income. Or you have come across that killer deal and the collateral for a loan is excellent and you know you’ll make a fortune on it but you can’t prove a “secondary means of repayment”. That means that if your killer deals turns out not to be such a killer deal you have the means and income to payoff your loan some other way.
You know, private hard money lenders have always been around but because of all those new banking regulations which were the result of the real estate crash of 2008, it’s become much more “main stream” to go to a private hard money lender for your needs. I, for one, don’t answer to anyone. I make my own decisions as to what I consider a decent risk. I have no depositors to worry about. No bank regulator looks over my shoulder. As long as I make loans that make sense, the few private investors who have entrusted me with their savings are happy.