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Why Alternative Lenders Can Say Yes When Traditional Banks Say No

by | May 17, 2021 | Blog

Why Alternative Lenders Can Say Yes When Traditional Banks Say No

Alternative lenders are gaining popularity among commercial borrowers in the financial marketplace. These alternative lending companies have significantly more flexibility than traditional banks, which allows them to approve loans that the big banks may not be able to fund. There are a number of reasons why alternative lending may be the right choice for you. Here are some of the most important reasons to consider alternative lending arrangements for your commercial real estate acquisitions.

Faster Funding

If you need cash in hand today to take advantage of short-term opportunities, alternative lending companies can deliver the cash you need to manage these transactions much more quickly than their traditional counterparts. Traditional lenders usually take about 30 to 60 days to disburse funding. By contrast, your alternative lending company can approve your loan much more quickly and can put funds in your hands in days, not months. This can make a big difference in your ability to acquire the properties you want and to take advantage of bargains that may arise in your local real estate market.

Faster Funding

Easier Application Processes

One of the primary reasons that banks take so long to disburse your funds or to approve your loan application is the sheer amount of paperwork required to apply for these loans in the first place. You may be asked to submit evidence of your company’s annual revenue and profits, an explanation of how the funds will be used, a business plan, a cash-flow analysis, and many other items of documentation before the traditional banks will even consider your loan application. A near-perfect credit score is also usually required for loans from traditional banks.

By contrast, the average alternative lending company can streamline your application process and can evaluate your application much more quickly. The speed of processing and the lessened paperwork requirements can make a big difference in your borrowing experience.

Increased Chance of Approval

Because alternative lenders often use different criteria when deciding to approve your loan, you may have a far better chance of being approved by these lending companies. If you lack a lengthy credit history or have experienced some setbacks in the past, working with an alternative lending company is typically a better option that will allow you to access the funds you need more easily. Alternative lending companies often have a higher tolerance for risk, which is a significant difference from the risk-averse policies of most major banks.
Increased Chance of Approval

Added Flexibility in Loan Sizes and Terms

In many cases, traditional banks will not even consider commercial loans below a certain dollar amount or without approved collateral. Loans intended for the purchase of cannabis-related properties are also off-limits for many traditional lenders under current law. By contrast, alternative lenders that offer direct lending options can typically offer fewer restrictions on loan size, terms and the uses to which the funding can be applied.
Added Flexibility in Loan Sizes and Terms

At ReProp Financial, we offer direct lending options for residential and commercial borrowers in California, Oregon, Washington, Idaho, Arizona and the western half of the United States. To learn more about our alternative lending arrangements, call us today at 1-800-444-2948 or visit us online to submit a loan to us. We look forward to the chance to work with you.

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