Everything is online these days—including the ability to get your commercial real estate loan needs met.
At one time, if a person interested in opening a business was in need of a commercial real estate loan, he or she had to go to the bank and hope for the best. Over the years, other avenues have become available with many willing to take on riskier borrowers but charging a higher interest rate to make up for the increased risk.
But now, thanks to the miracle of modern technology, borrowers do not need to leave the comfort of their homes to get a loan. They just need to visit an online marketplace lender.
What Is An Online Marketplace Lender?
While we all wish we had excellent credit, we do not. People make mistakes, situations occur that require money, and sometimes you have to do things that seriously damage your credit rating. At the time you may think you can live with it, but when the bank and credit union turn down your application for a commercial real estate loan.
Luckily there is an option that is still available to you—online marketplace lenders. What they do is allow someone to receive funding through an online platform. The site sources, underwrites, services the loan, and markets it to investors to fund it. Many like to specialize in short term loans, but some will also work with longer terms.
Since the risk is greater, interest rates often tend to be higher to compensate lenders for taking a chance.
How Does An Online Marketplace Lender Benefit Borrowers? Investors?
Every form of lending comes with its positives and negatives, and getting your commercial real estate loan needs met through an online lender is no different.
For the borrower, the benefit is clear. They needed to get their financing needs met by someone, and they did. Using a traditional lender was not an option for them, but thanks to an online lender they were able to reach an alternate and untapped source of financing. In many cases, the process is faster and more efficient. So you will at least not have to wait for weeks and months to find out you are getting declined.
As an investor, it allows for someone that does not have the kind of funds on hand to finance a project completely the chance to get involved in commercial real estate. Depending on the platform used, they even have the option of going to the site and examining potential projects on their own. They can then decide which project and how much they want to put in.
The income returns are often competitive with other investment options.
Commercial real estate loan are being serviced through online marketplace lenders, but the practice has yet to take off. However, the demand is there, and as more investors realize it, more options will likely become available online to those searching for a lender willing to approve them.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.