In a previous post we had mentioned the particular lenders as one of the best options for those who want to start or give a boost to their businesses.
On that occasion we also mentioned the type of lender who performs the actions under a guarantee model such as loans with Financial Credit Institutions.
Currently, where it is becoming increasingly difficult to access a bank loan through traditional channels, this form of indebtedness and getting money has also become a very good business option for those who have the capital.
And is that lending money to others can be a great business opportunity, that is why every day we notice how the internet offers us great proposals related to this loan model.
What is the business of private lenders?
For years we have known this figure but in a less serious and formalized version. It has always been common for family members to lend money to each other to meet needs, such as paying debts or issues associated with the first need, such as food.
However, this form of private lender has evolved and we now find investors interested in lending, people receiving money and intermediaries.
One of the business forms that we most notice is that of the last figure, that of the intermediary.
Currently there are many companies that have organized either as a physical figure or through an internet business as solid businesses that are responsible for serving as a channel within the individual loans.
The companies that are in charge or that have their business based on the private loans have a large database in which the people who wish to invest or lend are included.
When a person in need of money arrives with the intention of requesting a loan, they immediately search within the database for those people who adjust to the client’s need.
Remember the two ways of making private loans. One of them is without guarantee, the only existing guarantee is the same loan, the second type of loan is the one in which a guarantee is requested.
In this case, a real estate asset or an asset that can provide 30% of the amount of the debt is requested.
The job or the business of the intermediaries consists of earning a commission for each loan that is made thanks to their work.
In this case it is important to be responsible and very serious in this type of work, since success depends not only on being able to get the loans done, but on guaranteeing reliability in each one of the clients, whether they are investors or those who require the loan.
These intermediary companies can be found in two ways : one of them is through platforms on the web where those who require loans contact and give their data and the other is the physical company in which many consulting firms or that they are dedicated to business related to banking they take this idea as an ideal business model.
What advantages does an investor have in the business of private loans?
We have said that people who decide to make this a business get many benefits or advantages, when they receive commission and when they establish their business.
However, we will mention the advantages of those who decide to lend their money, the so-called investors.
1. Investors obtain profitability from the money that they lend: on the one hand, they are the income that comes from the interests of the loan and on the other hand, the income that comes from the defaults of the people.
Some of the platforms that are responsible for being intermediaries mention for example that for non-payment a percentage can be obtained between 2% and 19%.
2. Earnings equal to those charged by banks are obtained, with the same profitability. Currently a bank charges between 7% and 12% interest depending on the solvency of each person with whom the loan has been made.
Because of this, individuals or investors obtain a lot of profits, since they lend their money in small amounts and obtain profits for each one of them.
3. Investment in several people: another advantage of lending money is to try to distribute it in different amounts and in different risk groups, with which it is possible to make more and better profits.
4. Increase revenues: although economic profitability is one of the greatest incentives, obtaining money through this business also allows the possibility of investing in areas or sectors that are of interest.
With the money earned it is possible to invest it in this same business, or on the contrary invest in shares or homes to make more money grow.
What are the advantages of the people who make the loan?
We already mentioned the advantages of intermediaries, the advantages of individuals, now it is time to talk about the advantages that people who decide to make private loans have.
1. No paperwork: one of the best issues is that this form of loan does not require the paperwork that banks otherwise require.
Most of these papers must confirm that you have the solvency and the guarantees necessary to cover the entire debt, while the private loan is only required to cover 30% of it.
2. The interests: if they must be paid, but many companies offer lower or adjustable interest to the needs and capacities of the people to pay.
3. It is not necessary to wait a long time: for this type of loan to be approved, normally in banks it is necessary that people wait days to know only if it has been approved or not.
In the case of private lenders it does not take much time to know whether it is approved or not, normally you get a response within 48 hours.