Private hard money lenders are in the business of providing loans and loan services to individuals who require hard money loans (loans collateralized by real estate.) Private hard money lenders might be direct hard money lenders or brokers of hard money lenders. Most private hard money lenders are, in actuality, brokers. Some private hard money lenders are both brokers and direct lenders. In these instances, the non-public hard money lender generally funds one or up to a few small loans per year and serves in the broker ability to clients for the loans they assist to originate.
Deciding on whether or not to work with a hard money broker or a private hard money lender is similar to choosing whether to purchase property using the assistance of a broker/agent or if to create a deal direct to the seller on your own.
The advantages of working directly with a true private hard money lender are immediately evident: You may sometimes save money by going direct. Brokers are paid for their services using a number of the points you pay on the hard money loan. Therefore, the more brokers involved in a deal, the more you are likely to pay in both points and percentage to accommodate that cost.
For those who have opted for direct hard money lender who's a great match for your project, you will be able to talk directly with the decision makers, avoiding the 'run around' that so many hard money borrowers be taken in by. You're told that the loan is going through, only to hear the next day the lender has elected not to undertake your hard money loan and today the loan is on another desk in another direct lender's office - or worse, on the desk of some other broker who may have heard a broker you never know a lender who might want to fund the loan. Sometimes, the choice of direct lender is based more about the commission the broker can get than you are on your best interests.
With an immediate hard money lender, you can avoid the 'run-around' and may be able to close more rapidly. In the end, nobody knows your situation like you do, no one can explain any extenuating circumstances better than you are able to, with no one is as committed to your company as well as your hard money loan as you are.
The advantage of working with a commercial large financial company can also be clear: a seasoned, well-informed, honest commercial large financial company may have the knowledge of and access to the direct hard money lenders in Ontario, Canada, and the Usa. A commercial mortgage broker will know where your loan has the best fit. A great commercial large financial company can help you 'package' your loan to your best advantage, helping you figure out how much to anticipate in line with the equity inside your property, kind of property you're collateralizing, how soon you need to close the offer, and more.