The bewildering array of options for commercial financing online can make it difficult to tell who you can trust. A good lender will be interested in your business, be up-front about fees and will offer good customer service.
A good lender will want to know about your business and the reasons you need financing. Be sure the lender isn’t trying to offer you money too quickly. Few loans can clear within three days. If a lender is offering you fast-money, without thoroughly consulting you it is probably best to reevaluate your options. Additionally ensure a lender isn’t merely offering you the maximum loan amount. Compare your options and see the types of loans your credit score qualifies you to receive and compare this to what the lender is actually offering. If it seems like a potential lender is offering you more money than you would otherwise qualify for, it may be a warning sign that the lender is giving you a loan which you couldn’t possibly pay off.
Ensure potential lenders are transparent about the cost of the loan and that you understand the process. Is the lender up front about the terms and conditions of the loan? How willing is the lender to discuss the total cost of the loan in terms of APR? If they are vague about these details you may want to look elsewhere. Ask about pre-payment penalties and understand the lien structure of the loan. Heavy pre-payment penalties and blanket liens may be an indication that the lender does not want you to move onto more traditional financing. Look out for inflated fees, anything above twenty percent of the total loan amount is considered unreasonable and always know what you are signing throughout the process. Some predatory lenders may persuade you to sign multiple forms. You may be agreeing to pay higher fees. Read any documents carefully throughout process and ask the lender to explain each one. If the lender is vague about the process or unwilling to explain what you are signing, consider other options.
Above all trust your instincts when reviewing potential lenders.
Perform your due diligence, review the lenders website and seek out customer reviews. If their website seems wrong or if the reviews are mainly negative obviously you should look elsewhere. A good lender will have helpful advice and will communicate clearly with you. They will want to understand your needs and ensure you understand the terms of the loan you are applying for. If a lenders customer service is impersonal or unhelpful take it as a sign that they don’t have your best interests at heart.
Above all a good commercial lender is a good communicator
Knowing who to trust when you get financing online may be difficult. But a good lender consults you about your needs, explains the process clearly and is willing to offer you sound advice. Following these guiding principles and trusting your instincts will help you avoid falling prey to predatory lenders.
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.