Here at Abbey Mortgage & Investments, we have a variety of private loan options, among our many others services. Hard money loans are our bread and butter service here, as we provide Colorado communities like Denver, Berthoud, Loveland, Fort Collins, Longmont, Golden, Boulder, Colorado Springs, and other Front Range towns with an exceptional range of loan options when it comes to mortgage loans.

As one of Colorado’s top commercial hard money lenders, we have a passion for going beyond paperwork, so we can genuinely build relationships with our clients. While other hard money lenders may not care about your character or background, we make a point to look beyond the surface level so that we form a solid partnership with our clients.

Today’s post is going to focus on comparing banks with private lenders. Although we are biased as we fall into the latter category, we still want to inform our prospective clients with solid, useful information which they can use to make an informed decision. The more educated you are on the matter, the better chance we both have in terms of our long-term success. So read on if you are interested in learning what a private commercial lender, like Abbey Mortgage & Investments, can do for you!

Foundational Principles

There is inherent risk when it comes to borrowing money. And this risk is taken on by both parties – the borrower and the lender. Neither party has a crystal ball to look into the future, and that means analyzing risk vs. reward comes into play. When it comes to a field like commercial real estate, this principle comes into play. For borrowers seeking a loan, it’s important to understand the pros and cons of getting a loan from a national bank, as opposed to going with a private commercial lender. Once this is accomplished, the borrower can make a better decision that they can be more comfortable with.

If You Choose A Bank

There are some benefits to going with a bank. Generally speaking, you’ll typically find lower mortgage rates on the market when weighed against a private lender. Allow us to interject; that isn’t always the case, as you are likely to find here at Abbey Mortgage & Investments. But again, generally speaking, these loans are usually able to be made long-term, with 30 year loans not being out of the question. Furthermore, if a borrower has a heightened risk of defaulting, then getting a bank loan can lower the risk of that happening, due to traditional loan qualification standards, broadly speaking. That said, the likelihood of getting approved for a national bank loan is diminished if you have a heightened risk of defaulting in the first place, so that last point is slightly self-defeating. But, hey, that’s not our problem. We aren’t a national bank.

Drawbacks Of Going With A Bank

As we’ve already noted, there are some cons when it comes to going with a national bank for a commercial loan. For starters, they tend to be much more strict in terms of requirements for verifying income, down payment negotiation, and a minimum viable credit score. Other drawbacks include a drawn-out loan approval process (months is the norm, whereas with a private lender you can often get approved in a matter of weeks), among other negatives. Again, we are doing our best to be objective here. And these drawbacks are a reality when it comes to borrowing from a bank.

The Advantages Of Private Lenders

One of the main advantages that we’ve already noted is that the approval process is typically a matter of 1 to 2 weeks, as opposed to 90 days or more when going through a bank. That is huge pro for people looking to move on an opportunity that might be time-sensitive. In the same vein, the process for qualifying generally tends to be much less strenuous and time-consuming.

Another advantage of getting a private loan from a mortgage lender is that the 2 parties can come to terms on their own accord. There are no lending requirements that are set in stone, which means you aren’t tied down by whatever the government dictates is appropriate. Additionally, you won’t have to spend a wad of cash on closing fees with your typical private lender. In this instance, Abbey Mortgage & Investments falls into that “typical” category.

What Are The Drawbacks Of Going With Private Financing?

We are glad you asked! Like we mentioned above, there are inherent risks associated with a loan for both parties. With that in mind, we are a business that needs to be financially viable for the long-term, which is another way of saying we need to cover our own backsides to a certain degree. But no 2 loans are alike, and one of the things that we excel in is making a commercial real estate loan, for example, a win-win for both parties. We aren’t in the business of giving money away, but one of the reasons we have become a mainstay within the field in Colorado is because of our commitment to working with our clients so both parties are satisfied.

Consider Abbey Mortgage & Investments

Whether you are looking for a private loan for a commercial real estate opportunity, an industrial property, or even a retail space, Abbey Mortgage & Investments is confident we can help accelerate and optimize the opportunity. In addition to Colorado commercial real estate loans, we also offer hard money loans, sell your note for cash loans, short term loans, fix & flip loans, construction loans, and many others as well.

Our Process

In reference to commercial mortgage loans, we will typically need an appraisal of the property, review the details internally, and offer a solution we think will work well for everyone. We make a point to ensure positive cash flow consistently goes to the borrower throughout the duration of the loan. But no 2 loans are exactly the same, so just get in touch with us and we will reach out to you shortly! We would love to hear from you.