As Canada claws its way out of the financial crisis of the past years, the need for private funding is on the rise. Although a lot of businesses and their (former) employees were hit very hard, it was hit hard in a good way. It has taught us a good lesson on the pitfalls of financial excess. People who saw their wealth disappear right under their noses have realized the importance of a sound investment and good management. Entrepreneurs who lost their businesses or barely survived are looking for ways to restart their business or start something entirely new.
Everyone is in need of money and they are willing to pay high interest rates and fees for it. People are looking for money to buy properties and cars, renovate their home, invest in businesses, pay off their debt, pay for the education of their children, and simply to clear their utility bills. They are seeking the money with new confidence as the country rises out of the economic doldrums that characterized much of the past decade.
The best time to invest your money:
If you managed to escape the crisis with your wealth intact, then there has never been a better time to invest your money. Rather than keeping the money lying in a bank or some other fund earning a very low interest, you can lend it to individual borrowers and get high returns. Of course, there is a certain amount of risk involved in it; but there can’t be gain without risk. To minimize the risk, you can let a brokerage or lending agency handle the entire process.
The advantage of lending through a private brokerage or lending agency is that you won’t have to do anything apart from making the money available whenever someone needs it. Starting from accepting loan applications to receiving the repayment (with interest), the brokerage handles everything. You will earn your interest and the brokerage receives its processing fees. Your money will be used to finance private mortgages, second mortgages, construction loans and various other needs of the borrower.
When making your money available for private funding, you should do it only through a brokerage firm with a solid reputation. Remember that it’s not only your money that is at stake, but also your reputation. Choosing a brokerage that is involved in shady lending practices can land you in trouble with the law.
The best time to borrow money:
If you are in need of money to start a business, finance your home renovation, or meet any other financial obligations, then this is the best time to get a mortgage loan because private lenders are competing against one another to give you the money. Rather than taking out a loan from the bank or a financial institution, you should consider borrowing from a private lender because from applying to receiving the money, the entire process is quick and hassle-free.
Private money lenders make their money available for mortgage loans through brokerage firms or lending agencies. These brokerages handle the entire process and charge you a processing fee. Admittedly, the interest rate and the processing fees are higher than that charged by banks and financial institutions, but the application process is simpler and approval is given within a few days. Also, your credit score doesn’t play any role in your loan application. These are what make borrowing from private funds so popular.
You can take out a mortgage loan or a second mortgage loan on your home’s equity for any purpose. However, it is money that costs money and you should use it prudently. Here are some of the good uses that you can put it to:
- Purchase properties for investment: Investing in properties can give you a good return if you do it after a thorough market research.
- Home extension and renovation: You can use the money to add a much needed room or to renovate your home to improve the living condition or for sale.
- Construct a second house: Using the money to construct a second house can pay off handsomely when the house begins to make money for you.
- Finance the college education of your children: Investing the money in your children’s future is a great use of your money.
- Consolidate your debts: Consolidating your debts can lower the cost of debt and make it easier for you to repay.
- Start a small business: Starting a small business can set you up for life if the business becomes profitable.
When getting a first mortgage, second mortgage or construction loan from a private fund, you should choose the right brokerage. A firm that has a good reputation and many years of experience in the business can give you the best deal in terms of the amount you can receive, interest you have to pay and the payment schedule.
