Private lenders specializing in commercial bridge and hard money loans are quite different compared to traditional lenders. Topping the list of differences is speed. Although not the norm, private lenders are capable of approving and funding loans in as little as one business day.
One business day? How is this possible? It all boils down to the fact that private lenders operate on a whole different plane. They are not tethered to the same operational models as traditional lenders. They are also not regulated by the same rules. They have the flexibility to do things differently. And because of that, they can move much more quickly.
Payroll and Property Acquisitions
Actium Lending is a Utah hard money firm located in Salt Lake City. The firm offers loans in Utah, Colorado, and Idaho. Two specific case studies demonstrate Actium’s ability to move quickly when circumstances demand it.
The first case involves a company expecting a significant payment from one of its customers. That payment was to cover the next round of payroll. However, it was late. The company reached out to Actium with a piece of real estate they offered as collateral. Actium agreed to provide a bridge loan that covered payroll and kept the company moving. Best of all, the loan was approved and funded in one business day.
The other example involves a real estate investor hoping to purchase a multi-unit apartment property. The investor’s bank backed out of the deal days before closing. He contacted Actium on a Friday morning. Closing was scheduled for the following Monday.
Actium was able to inspect the property that same day. Loan officers put the paperwork together on Friday afternoon. Signatures were gathered and the paperwork and funding were sent to the title company on Monday morning. In one business day, Actium was able to get that investor to closing.
How They Manage to Do It
It is no surprise that private lenders work quickly. Anyone who has had the privilege of borrowing from a private lender knows this first hand. What most people don’t know is how private lenders do it. How can they approve and fund loans in as little as one business day when it takes traditional lenders months?
There are three keys to funding private loans quickly:
- Minimal Documentation Requirements – Lenders require documentation along with loan applications. The more documents required, the more time it takes to approve an underwrite. Private lenders keep documentation to a minimum. They spend less time going through documents.
- Asset-based Approval – Private lenders can get by with less documentation because their decisions are asset-based. In addition, asset-based lending doesn’t require going through a borrower’s personal finances with a fine-toothed comb.
- Simplified Underwriting Process – Finally is the underwriting process. Underwriting is a complex and multi-layered process in a traditional lending scenario. Private lenders keep things simple. Simplifying allows them to work faster.
Doing things differently ultimately means not having to spend so much time getting a loan ready for funding. Private lenders don’t run endless credit checks. They do not keep asking for new documents weeks after an application has been approved. What they do is simple, straightforward, and to the point.
As a borrower, you can get access to fast cash through private lending. But here is a word of advice: make sure you complete your loan application in every detail. Also be sure to get the request and documents (as few as they may be) together before you submit your application. If everything is in order when you submit, you could be approved and funded in as little as one business day.
