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Private Lending

Private lenders are individuals, professional investors, or non-depository financial institutions that offer loans as a nonbank operation. Borrowers can go to private lenders for a variety of financial products, including mortgages, personal loans, and small business loans. Unlike banks, credit unions, and thrift institutions, private lenders offer financial products without taking deposits from customers. Private lending may occur in person or online through online technology that enables users and enterprises to access and manage their finances digitally and that can provide alternative financial services.

What is a Private
Lending?

A private lender is an individual investor or nonbank financial institution that offers loans without taking monetary deposits from customers. Private lenders can be private lending companies or private individuals.
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  • (949) 554-3682

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Imbursement

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Avg. Term Length: 24 - 60 months

Private Lending Company

Here are some examples of private lending companies:

  • Financial technology or fintech groups
  • Private equity firms
  • Venture capital firms
  • Hedge fund managers
  • Business development companies
  • Investment managers

Individual Private Lender

An individual private lender is any person who offers loans to any consumer or business. Here are some examples of individual private lenders:

  • Venture capitalist
  • Private equity investor
  • Angel investor
  • Peer-to-peer lender
  • Personal investor
  • Retail investor

Why Choose Us?

Unlike traditional banks and other alternative lenders, at IBF, we truly value your business. Your success is most important to us, so we’ll never over-leverage your business by offering you more funding than you can handle. Our simple application and quick approval process makes it easy for you to get the working capital your business needs, and our experienced funding consultants will walk with you every step of the way.

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  • (949) 554-3682

Hard Money Loan Lending Parameters

Innovative Business Funding is a broker that can provide services to clients for bridge loans, and wholesale hard money to lenders. We are based in Costa Mesa, California. We successfully serve California’s real estate market and provide services nationwide for the bridge lending market for short-term hard money loans secured by commercial and residential real estate. Our timelines are fast, flexible, and structured around each individual client. We come from a background of 30 years in the mortgage lending industry for owner occupied and investment loans (non-owner-occupied properties), private lending for hard money and bridge loans, non-QM for business purposes, a paralegal in asset location and recovery, debt negotiation and loan modifications in the foreclosure market. Our knowledge of the real estate market enables us to create a niche that is win-win for everyone.

Traditional Hard Money Loan

General Guidelines

– Will make exceptions up to 120 months.

– Par pricing options available on most loan offers.

– Strong verifiable income is a compensating factor.

– 75% LTV Allowed via 1st & 2nd trust deed

– Closing in 3-7 days requires a full file at submission

– 2nd Trust Deeds must be subordinate to institutional 1st

Innovative Business Funding offers a high LTV / ARV loan program specifically tailored to rehab investors. The below term sheet is a closed transaction and, in this case, calculates out to over 120% loan-to-cost which enables investors to buy many more properties than your average hard money or conventional loan. This translates to 65% of the After Repaired Value. All loans require cash equity into the transaction from the loan sponsor.

Construction Loans

The strength/experience of the principal/sponsor is a key part for this private money construction loan program. Typically, we will broker with a lender that will lend up to 75% of the cost of the project. We will focus on shovel/ready construction projects.

Interest Rates: As Low as 9.99%
LTV: Up to 75% of Cost
Lien Position: 1st Trust Deeds Only
Loan Fee: Starting at 2 pts
Commitment Fees: CBC
Loan Amount: $500,000 and up
Loan Term: Up to 24 Months w/ Extensions
Documentation: Stated Income
Underwriting Times: 48 Hours
Closing Times: 30 Days+/-

Here is a real-world example of the program:

Purchase Price$85,000
After Repair Value:$160,000
Loan Amount:$105,000 (65% of ARV)
Interest Rate:Starting at 11%
Interest Reserve:3 – 12 Months
Points:Starting at 2 Points
Site Inspection Fee:$250 – $1500
Loan Term:6 – 24 Months
Geography:California Only
Fund Control:$20,000
Closing Times:14 Days from Site Inspection
Funds to Close:$17,000

Geography: CA Only

General Guidelines

Strong verifiable income is a compensating factor.

Land Loans/Lot loans:

land loans are offered to borrowers who have a specific strategy with the land itself, not for land banking or cash out for other investments.
interest Rates: As Low as 9.99%
LTV: Up to 50%
Lien Position: 1st Trust Deeds Only
Loan Fee: Starting at 2 pts
Commitment Fees: CBC
Loan Amount: $100,000 and up
Loan Term: Up to 24 Months w/ Extensions
Documentation: Stated Income
Underwriting Times: 48 Hours
Closing Times: 30 Days+/-
Geography: CA Only

General Guidelines

50% max LTV for infill lots

Lower LTV offered for acreage.

What is a Land Loan?

Loan for Raw Land

improved “raw” land is usually the hardest to finance or get with favorable terms. Lenders consider raw land as the least desirable collateral for all land uses. Most will need more money down (up to 50 percent) and charge a much higher interest rate.

Loan for Lot Land

Lot loans are generally available from local lenders and some national lenders. A lot loan typically consists of one or more building sites for residential construction. These sites usually have been improved with the addition of sewer and water systems, streets, and easy access to other utilities. Typically, lot loans require 10-20 percent down, with amortization terms up to 20 years.

Advantages

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Disadvantages

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