Every business has some financial goals in short, as well as the long-term. There are some occasions where you can plan ahead of time while some need instant decision making. The same goes for the finance field, where not every decision bears the expected fruit.
What is decision-making, according to you? It is to evaluate all the options and then choose the one that proves to be the most profitable. The same goes when any business that wants lenders for finance. This is where direct hard money lenders in California come into the picture. To increase your options of borrowing money, direct lenders have some flexibility in their repayment schedule. We are here to talk about every single benefit of resorting to direct hard money lenders for a business as well as an individual. So, let’s start.
The basic definition of direct money lenders
Direct money lenders, as the name suggests, have a personal connection with the borrower. They do not look for the credit history or any other feature that the borrower might have for that matter. They just look for the opportunity to invest in and if the expected amount will be rebuilt. That is why the interest rate is higher than usual. If you go for conventional borrowing, the bank’s charge very minimal interest based on the type of loan.
Here, you’ll be seen as an investment opportunity. The more profit you’ll be making in the investment, the better chances of approval of the loan. So, here you can convince the lender to tweak the terms and conditions according to your convenience.
The working of a direct lender
Unlike mortgage loans, direct lenders do not keep any collateral security. They just keep the mortgage of the property in concern. For example, if you need money to invest in a property, and it will be here at a higher price in the future, the same will be the collateral for the deal. If you make any default in repayment, the lender has all the rights to take over their property.
Also, the formalities involved in direct lending are much less than mortgage loans. For simple reasons, the latter will always look for the credit history of the borrower. For that, they need to communicate with the recording agencies that have all the previous repayment defaults done by the borrower.
Why should you resort to direct money lenders?
With the definitions mentioned above, it’s almost transparent that you can have instant approval for the loans through a direct lender. And it’s no surprise considering that investment opportunities need quick decision-making. It’s not only for the businesses but also for the individuals who regularly invest in real estate. Some possibilities might escape very quickly while some stay in the market. The profitable ones mostly have a lower gestation period. So you need to grab them quickly.
With these instant approvals, you are not under any stress of financing your investment. It works like a charm for the ones who have some investment avenues in their pocket. It becomes crucial for all the fix and flip investors to look for such opportunities. After all, their source of income is at stake if they cannot produce finance instantly.
Moreover, there is improved flexibility of repayment. You are not under any stress of paying the amount in a lump sum. You can always choose installments that suit you. If you do not have a good credit history, there’s no need to worry. Direct lenders know how to handle the borrowers who have gone through some hardships for repayment of loans.