private lending vs. bank loans

Many real estate and business owners think that their bank is the only place they can get loans. Bank interest rates can be lower if you have a large asset as a guarantee and you have nothing to pay in advance for any costs and hidden fees that will be deducted automatically on the debit from the bank.
But In some cases, if you have no sufficient guarantee, your bank will deny to extend you credit. In such cases, we can offer private loans with lower rates than banks.

Banks typically have a lower cost of funds than other lenders but their structure and management costs are too high, so the interest rate will be some time very lucrative for the bank and very hard to manage for the borrowers.

Bank depositors (their retail customers) normally keep a lot of funds in their checking and savings accounts. Thus, banks have easy access to those funds to lend out. And, if banks don’t pay any interest or pay very little interest for those deposits (under 0.5 percent nowadays) – then those funds are very cheap for the bank to use but nonetheless require more than 200% in guarantees against the funds extended, in addition to the high debit rate of interest.

Furthermore, banks can access federal funds against 0.25% interest rate nowadays, which is low compared to the normal rate of 4% – 6% and has been as high as 19%.

Private lenders, on the other hand, work with investors who are looking for decent returns on their investments and in our particular case, these funds are in our Crude Oil Bank Accounts.

Contact us today for your real estate and commodity financing needs.

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