Private loans (also known as hard money loans) are typically offered by individuals or organizations that have non traditional qualifying guidelines, have traditionally less "red tape" and regulation, and are funded based on the value of the underlying real estate collateral. These loans can fund acquisitions, renovations, and equity take-outs for projects that do not qualify for bank financing.
The established private loans definition distinguishes these lending arrangements from those available from public lenders. Banks, credit unions and other lending institutions lend funds received from depositors, rather than using their own capital to finance these lending arrangements. By contrast, private lenders invest their own funds in order to derive a profit in the competitive financial marketplace. Individual investors are the most common source for private loans and usually possess a significant portfolio of investments. These lenders are usually open to a higher degree of risk than traditional lenders and expect higher rates of return on their investments. As a result, borrowers will usually pay higher interest rates and receive less favorable terms when seeking private financing for their business funding needs. Certain real estate projects may have difficulty in obtaining financing through traditional lending outlets and may require the services of these private investors in order to fund their real estate transaction.
CNF Exchange offers small businesses and real estate investors an ideal venue for locating and obtaining private loans online through its easy-to-use Internet platform. Prospective borrowers can submit their completed funding requests through the CNF Exchange system for review and evaluation by private lenders looking for solid investment opportunities. Business owners can then compare the lending proposals offered by these investors and choose the most appropriate solution for their current financial needs. CNF Exchange also offers a range of added services designed to help borrowers present their funding requests in an organized and persuasive way to improve their chances of approval for private loans in the investment marketplace.