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by: DanGibson
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Whether you are reading magazines or watching the television, all financing discussions center on the banking industry. Taking it in, one would imagine your only option is to work banks for loans

This generalized notion of finance has been cracked this year. As banks start to fall apart, many are shocked to see the paper thin nature of the finance market. If you think this is bad, 2009 is shaping up to be much worse.

Lending institutions do something very interesting when they start feeling financial pain. They stop lending money. While they are happy to take in deposits, the hold on to it in an effort to balance out their books.

Many individuals and businesses wonder if there are alternatives to the banking industry when it comes to financing. After all, you have to look around if the banks are not going to give out money. Fortunately, private money lenders are available.

You first question is most likely what is private money? It is an individual or group of individuals that loan money. They will often pool their money and look for lending opportunities that will be profitable.

Banks are creatures of habit. They only deal with certain loans that fit their comfort level. If a loan requires them to be creative at all, they will not write it. Fortunately, private money lenders will.

Unlike your financing bank, private money lenders do not have hang ups when it comes to financing a creative deal. Unique deals fall right into the comfort level of private lenders, so they actually welcome them.

You might think the individuals who make up a private money lender might be a bit shady. They are not. They typically are a collection of high net worth individuals such as physicians, CEOs and so on.

Cost should always be a factor in a loan. With private money lenders, you are typically going to pay a bit more than with a traditional loan. Of course, you are going to actually get financing, so there cannot be too much complaining.

The early part of this decade saw a period of easy money lending, but that has changed. Getting a loan now can be brutal. Banks are being very tight, so look around. Private money is as viable an option as any these days.

About the Author

Dan Gibson is with CommercialLoanstop.com - your resource for San Diego hard money loans.

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