Knowing A Legitimate Money Lender.
What Is a Lender?
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A lender is an individual, a public or private group, or a financial institution that makes funds available to a person or business with the expectation that the funds will be repaid. Repayment will include the payment of any interest or fees.
In another words, a money lender is One who advances money to another in the expectation of receiving repayment of the money plus a fee for the use of the money, called interest.
Lending dates back to at least ancient Mesopotamia when agricultural communities would borrow seeds and animals with the promise to repay once the crops were harvested or the animals gave birth.1 In modern society, lending occurs whenever someone swipes a credit card to buy a cup of coffee, takes out a mortgage to buy a home, or uses student loans to attend a university.
How Lending Works.
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Lending occurs whenever a lender gives something to a borrower on credit. It's a broad term that encapsulates many different kinds of transactions.
Common lenders include financial institutions, such as banks and finace companies, that build a business model around lending money. The borrower pays a price for taking out the loan in the form of interest. If the lender feels there's a higher risk of not being paid back by a borrower, like with a new startup business, they will charge that borrower a higher interest rate. Lower-risk borrowers pay lower interest rates.
Lenders do not participate in your business in the same way as shareholders, owners, or partners. In other words, a lender has no ownership in your business.
Lenders have a different kind of risk from business owners/shareholders. They also have different rights if the company goes bankrupt. A business being liquidated must pay lenders back before the owners receive any money.
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Types of Lending.
Lending can be broadly broken down into two categories: personal (or "consumer") lending and business lending. Some types of loans are available in both personal and business lending, though they are handled differently. For example, an individual can get a personal credit card to buy groceries and other basics, and a business can get a business credit card to buy equipment and other business expenses.
Differences Between Consumer Lending and Business Lending.
From a borrower's perspective, there are some legal protections with personal loans that aren't extended to borrowers with business loans.
The Equal Credit Opportunity Act and the Fair Housing Act protects U.S. borrowers from discrimination.2
The general protections from discrimination extend to all forms of credit, whether it's a personal loan or a business loan. However, the specific regulations of the Equal Credit Opportunity Act become more relaxed for business loans—the bigger the business entity, the fewer restrictions on their loans.3 The restrictions that get relaxed have less to do with discrimination and more to do with what kind of notifications the lender must give the borrower, and how long the lender must retain certain records on the borrower.
The Fair Housing Act, on the other hand, doesn't explicitly distinguish between consumer loans and business loans.
Types of Loans.
Business lending can help all different kinds of businesses. Some common uses for business loans include:
A) Loans to even out cash flow ("working capital loans").
B) Commercial and industrial loans (which require collateral) for short-term needs
Asset financing for equipment and machinery or business vehicles
Mortgages.
C) Credit card financing.
D) Vendor financing (through trade credit) from suppliers
Other types of loans are for special purposes, like loans to finance disaster recovery or loans for business startup.
As you shop around for a business loan, consider these factors:
The amount of money you want to borrow, which will influence the type of lender that you need. Any business assets you can pledge as collateral for the loan, which will help improve the terms of the loan. What you want to do with the loan, which could affect the type of loan you seek (such as a mortgage for land or buildings) Whether you need a startup loan to start a business or an expansion loan to help grow an existing business
How long you need the money, which will affect the type of loan and lender that best fits your needs.
Types of Lenders.
The most common lenders are banks, finance companies, and other traditional financial institutions. However, there are many other types of lenders, including:
- Peer-to-peer (P2P) lenders
- Crowdfunding contributors
- Family and friends
- Yourself
P2P lenders can operate through online organizations, like LendingClub. These sites connect lenders with borrowers. P2P interest rates may be lower than borrowers would find with a traditional bank, but higher than a lender could receive from a certificate of deposit.
crowdfunding sites like (https://www.gofundme.com/en-us) are similar to P2P lending sites, in that they digitally connect the people who need money with the people who have money. Unlike P2P lending, the people who contribute to crowdfunding efforts may not receive their money back dollar-for-dollar. Instead, they may receive perks from the person or project being funded. For example, someone may donate to a movie project and in return, they'll receive a copy of the movie once it's completed.
Family and friends can become lenders, and these transactions are sometimes called "private party loans." It's important to consider the impact a loan might have on your personal relationship with these people. A loan agreement may help ensure everyone is on the same page.
If you have the means, you can loan your own money to your business, as an alternative to investing in it. If you choose to loan yourself money, write a contract that specifically spells out your role as a lender, the payment schedule, and the consequences for defaulting on payments.
As you look for a lender, consider the type of loan you need, whether you have any assets to pledge against the loan, and the other factors that will determine your ability to get a business loan and the terms of that loan. Be prepared with a personal financial statement, a business plan, and financial statements for your business.
Small business owners might also consider contacting the Small Business Administration (SBA).
The SBA works with lenders to provide guarantees for loans to small businesses. Their 7(a) loan program helps small businesses get loans who might not otherwise qualify because of "weaknesses" in their applications.
The SBA doesn't act as a lender. Instead, a lender makes the loan and the SBA will guarantee the loan by agreeing to repay up to 85% of the loss in case of default.4 The SBA's 7(a) Small Loan, for example, allows you to borrow up to $350,000 with up to 75% of that $350,000 guaranteed by the SBA.5
Key Takeaways.
Lending takes place when a lender allows a borrower to borrow something.
Lending typically occurs in the form of loans.
Banks and finance companies are the most common lenders, but there are a wide variety of options for potential borrowers.
Hard-Money Lender.
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A hard-money lender provides short-term loans to individuals purchasing residential or commercial real estate. This financing is also available for land purchases. Investors use hard-money lenders to acquire investment properties relatively quickly. Hard-money lenders are considered private lenders, and do not use conventional standards to extend credit to borrowers. A borrower uses a hard-money loan as a temporary, short-term loan solution until he can acquire more conventional financing for the property.
Lenders.
Since-hard money lenders are private lenders, their money comes from a variety of sources. Some hard-money lenders lend other people’s money, the same as a conventional financing institution. These small lenders use private individuals’ money to lend to investors and other borrowers who can’t qualify for traditional financing, and promise a high rate of return to the investor. Other hard-money lenders take on the lending responsibilities themselves, finding borrowers who are interested in financing and willing to provide a certain rate of return.
If you are in need of hard money lenders, there are a number of different types that you could consider. Here are some of the different kinds of hard money lenders that are available.
- Commercial Banks
One type of hard money lender that you could choose is a commercial bank. This type of bank is going to offer a number of different lending programs for your use. If you run a traditional business, you could get a hard money loan from this type of establishment in order to expand your business.
- Mortgage Banks
If you are in need of a mortgage, you might want to check out a mortgage bank. These hard money lenders can provide you with the money that you need in order to buy a property. When you get a hard money mortgage from a mortgage bank, you are most likely not going to be using this as a long-term solution. Typically, the terms are very short, and you will have to come up with a balloon payment at the end of the mortgage.
- Mortgage Brokers
Another type of hard money lender that you might want to consider is a mortgage broker. Mortgage brokers have a variety of different lending sources that they can use to get you the best deal possible. With this type of broker, you are going to be able to secure the money that you need in order to purchase a house.
- Finance Companies
There are a number of different finance companies that also offer hard money loans. These finance companies can provide you with the money that you need for nearly any project.
- Credit Unions
Credit unions are another type of hard money lender that you might want to consider doing business with. Credit unions have a number of benefits associated with them. For example, they are a nonprofit organization, so they can provide you with cheaper rates because they do not have to pay taxes. Finding access to a credit union might be difficult depending on where you live because some of them are limited to members of certain businesses and organizations.
- Online Lending Companies
One of the best options for you to check out is an online lending company. There are many different hard money lenders that do business online. You should be able to find several of them just by doing a simple search on a search engine. With the ability to work with online hard money lenders, you will be able to conduct business from the comfort of your home. You will also be able to shop around very easily and make sure that you find the best deal. When you are looking online for lenders, you want to make sure that you find a hard money lender that does business in your geographic area. Many of them are licensed to do business only in certain states, and you do not want to start the process if they cannot finish it.
How To Check If Money Lender Is Legitimate.
https://www.citizensinformation.ie/en/money_and_tax/personal_finance/loans_and_credit/moneylending_in_ireland.html#
There are several ways to check if a loan company is legitimate. First, check out the loan company on your local BBB website. Then do a quick online search and look up customer reviews. Finally, check with your state’s attorney general to make sure that the lender is registered with the proper state government agencies.
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Email : info@becticfinance.com
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If you're looking to take out a personal loan for reasons like debt consolidation or home improvement projects, it's important to make sure the lender you're trying to get money from is legitimate.
If you’re being offered a loan by a company you haven’t already vetted thoroughly, the easiest place to start doing so is online. A simple search query should generate enough to get you started - take a look at their online footprint, any associated customer reviews, or signs of negative news stories. Then, it’s reasonable to follow-up with a lender search by name with both the Better Business Bureau (BBB) and the Consumer Finance Protection Bureau(CFPB). The BBB can provide a plethora of information, including customer reviews and complaints, and an A-to-F letter grade rating of a lender’s reputation and business dealings.
Take a Moment to Find the Right Lender.
Hard money loans are excellent solutions to a variety of borrowing needs, especially concerning real estate.
There are many situations in which a hard money loan is the better option for securing the funds you need to purchase, build, or renovate your property.
If you don’t meet the hard money loan requirements, talk to your lender about potential negotiations as hard money lenders are more willing than traditional banks to work something out.
Do you have any questions or want to apply for a loan? Are you looking for a money lender? If you’re looking for loan or hard money lenders, contact us today and we can make your dreams a reality.
BECTIC FINANCE COMPANY LIMITED
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