5 Reasons Why Working With a Private Lender Can Boost Your Property Development

By: Aaron Robbins0 comments

The property development game is no simple business. With so much on the line, you’ll want to get the most out of your development. Finding the funding solution to get your plans off the ground can either make or break your property development ambitions.

There are many reasons why working with private lenders can boost your property development — we step you through the top 5 reasons below.

What is private lending?

Private lending is becoming increasingly popular amongst business owners in Australia. Unlike banks, credit unions and other financial institutions, private lenders are often ultra-wealthy individuals or smaller companies who pool their wealth to lend money to businesses and individuals.

Sometimes referred to as ‘peer to peer’ lending, private money lending is completely legal in Australia. Many borrowers use private loans for business purposes thanks to their flexibility and efficiency.

Most private lenders offer the same type of finance solutions (and more) as conventional lenders. Private money lenders provide short- and longer-term loans, such as the home loans available from Diverse Funding Solutions.

The top 5 reasons why working with private lenders can boost property development dreams

1 . Less pre-sales requirements, more financing flexibility

Whether you’re developing a commercial property or residential property, you can expect any financial institution to require presales information on your property development. If you’re developing ‘off the plan’, you may experience great difficulty in obtaining presales information. This lag time means that construction can’t get underway — as most prudent property developers know, one of the best ways to generate sales is to have the project completed as soon as possible.

Private lenders can assess your property development finance application without relying on as much pre-sale information, which means private lending can enable more flexible financing and the ability to get your construction started sooner. This then opens up the opportunity for better sales uptake and potentially a better development outcome.

2 . No credit checks

Unlike conventional banks, your property development loan approval is not reliant on holding a glowing credit rating. Lending for business purposes is often approached with trepidation by business owners, as often, their personal and business credit scores suffer as a result of pouring their own money, blood, sweat and tears into their business. The same can be said for property developers.

Particularly if it’s your first development, you’ll be pleased to know that most private lenders don’t need to run a credit check to process your application. Private money lenders understandably still want to mitigate risk where possible. However, this doesn’t need to be determinate on your past credit behaviour. Instead, private lenders structure their loans based on devising a suitable exit strategy, followed by a repayment schedule.

This is one of the most widely appreciated differences between a private lender and a traditional lender.

3 . Super fast turnaround

Traditional lenders are notorious for lengthy application processes, often spanning weeks (if not months). Private money lending comes with the opposite reputation. In fact, at Diverse Funding Solutions, we can approve and fund some private loans within 48 hours.

As a developer, you don’t have the time to wait around for finance approval. Working with private money lenders means that you can keep up the development momentum and spend more time developing, with less time chasing up loan paperwork.

4 . Specialists in property development finance

At every stage in your property development journey, you’ll want to partner with professionals who know what they’re doing. Private lenders often specialise in different areas, and often are very experienced with the ins and outs of property development finance. This means that private lending offers you expertise to navigate your property development finance journey. At DFS, we’re one such lender!

With an indepth and thorough understanding of all things property development finance, we can place with you with best private lender for your individual circumstances and development plans.

5 . Private lenders work with you

Have you ever felt like just a number at the big banks, and that there was no flexibility in their rigid lending requirements? Every development project company or project itself is different, which is why working with private lenders who have a much better level of flexibility with regard to their finance solutions can boost property development.

Working with private money lenders who will consider your unique financial situation and devise a loan structure and suitable exit strategy can be the difference between being approved for finance and being turned away.

How to access Australia’s best private lenders for property development

At DFS, we provide property developers with the combined wisdom of over 200 private lenders to offer private lending solutions to property development businesses all across Australia.

To access fast, flexible and transparent property development lending, contact the team at Diverse Funding Solutions.

Frequently asked questions about private lending

Is private lending safe?

Private lenders work under the same Government regulators as banks and other finance institutions, therefore private money loans are a safe option. Naturally, as a borrower, you should conduct your due diligence or seek professional advice before making any significant financial decision for yourself or your business.

What interest rate do private lenders offer?

Just like other lenders will offer a range of interest rates, so too do private lenders. Every private money loan will come with a different interest rate.

If you want to access some of the most competitive interest rates available on the private lending market in Australia, get a free quote now through Diverse Funding Solutions.

Is a private money lender expensive?

You may be surprised to find out that private money lending is less expensive than you may think. In fact, unlike traditional lenders who can hide fees away in their product disclosure statements, private lending through DFS offers you full transparency.

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