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Unlock Commercial Real Estate Success by Working with a Private Lender

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Real estate can be a lucrative venture for business owners, developers, and investors seeking financial growth and stability. However, securing traditional bank loans for commercial real estate can be a daunting, if not impossible, process—especially these days with many banks unwilling or unable to lend for business purpose loans. 

Private money lenders offer a viable and efficient funding alternative to banks and other institutional lenders. Let’s explore how private lenders, such as Enact Partners, can empower builders, developers, and commercial real estate investors to seize upon emerging business opportunities.

Understanding Private Lending

Private lenders provide capital to real estate investors or business owners to develop commercial real estate. Unlike traditional banks, private lenders offer borrowers a more streamlined process with less red tape, making them an appealing choice for real estate developers seeking quick and flexible financing solutions.

Private lenders typically determine whether or not to finance a project based on its potential and the track record of the borrower, rather than relying solely on credit scores and stringent financial criteria. This approach allows borrowers with a solid investment strategy and viable property prospects to secure the necessary funding without many of the hurdles often associated with traditional lending channels.

Advantages of Working with Private Lenders

Quick Approval and Funding: Traditional bank loans can involve lengthy approval processes, delaying real estate investment opportunities. Private money lending offers a faster and more efficient alternative, with quicker approval times and expedited access to funds. This enables qualified borrowers to move swiftly and capitalize on time-sensitive market conditions.

Flexibility: Private lenders often work side-by-side with borrowers to customize loan terms to fit the needs of the project, including length of loan, loan type, and repayment schedules.

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Greater Access to Funding: Borrowers with less-than-perfect credit scores or limited financial history can often get financing through private lenders, even if they’ve been turned down by banks. Private lenders still conduct their due diligence, of course, but they tend to consider the overall potential of a project vs. the borrower’s credit score.

Asset-Based Lending: Private lending is primarily asset-based, with the property itself serving as collateral for the loan. This can be advantageous for borrowers with little tangible assets or who are seeking additional financing on top of existing loans. The focus on the property’s value and the potential of the project mitigates some of the risks for both the private lenders.

Commercial Real Estate Expertise is Vital

Choosing a reputable private lender is vital for success. For borrowers, private lenders like Enact Partners, with decades of collective experience working in commercial real estate development and lending, can offer deep knowledge and insight that often lead to creative solutions. Unlike traditional banks, experienced private lenders—especially those with expertise in commercial real estate lending—are more likely to develop partnerships with borrowers, offering advice and guidance to help ensure a project’s success.

Funding Projects on Their Merits

With many banks and Wall Street-backed institutional private lenders becoming more risk averse and reluctant to lend for business purposes due to volatility in traditional lending markets, commercial real estate borrowers can expect banks and other traditional lenders to continue tightening their purse strings. In the meantime, private lenders who rely on the borrower and the project (not the market or the Federal Reserve) to inform their lending decisions are expected to continue to fund projects on their merits.

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Enact Partners continues to lend on projects with solid fundamentals—whether for land acquisition, construction, value-add, or bridge loans. Given its extensive experience in real estate, land development, and construction, Enact Partners remains confident in its ability to provide borrowers and builders the capital they need to acquire and develop property. 

(760) 516-7776 | funding@enactpartners.com | www.enactpartners.com

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