Private money is a commonly used term in banking and finance. It refers to lending money to a company or individual by a private individual or organization. While banks are traditional sources of financing for real estate, and other purposes, private money is offered by individuals or organizations and may have non traditional qualifying guidelines. There are higher risks associated with private lending for both the lender and borrowers. There is traditionally less "red tape" and regulation.
Private money can be similar to the prevailing rate of interest or it can be very expensive. When there is a higher risk associated with a particular transaction it is common for a private money lender to charge an interest rate above the going rate.
Private money lenders exist throughout all of the United States, seeking a chance to earn above average rates of return on their money. With that comes the risk that a private money loan may not be re-paid on time or at all without legal action. However, in the case of a real estate transaction the lender can ask for a deed on the property in their name & Insurance on the property the same as a bank lending money would require as collateral to help insure they be repaid in the event of a default on the loan or catastrophe to the property. In that case the lender gets the property and can sell it to recoup their investment. Private money is offered to clients in many cases in which the banks have found the risk to be too high or credit too poor. There are a few Private Money Lenders who offer a no credit check and loan amortization.
Private money regulationedit
Private money lenders must comply with state and federal usury laws. They are not exempt from banking laws. However they may be exempt from routine regulation such as banking exams etc. Further, if the loan is made to a consumer, the private money lender may have a limit on how many loans they may make in a particular state without being required to have a banking license. In the State of New York a private lender may make no more than five loans before being required to be a licensed lender.
It is not advised for residential homeowners and should be considered only for business capital and with the careful advice and oversight of an accountant and real estate attorney as the collection methods may be more aggressive in the event a borrower cannot repay. Private investors do not usually have the means or interest in long protracted workout agreements, and will usually go to court quickly as a means of recovering their monetary investment.
private, money, government, backed, currency, private, currency, this, article, multiple, issues, please, help, improve, discuss, these, issues, talk, page, learn, when, remove, these, template, messages, this, article, does, cite, sources, please, help, impro. For non government backed currency see Private currency This article has multiple issues Please help improve it or discuss these issues on the talk page Learn how and when to remove these template messages This article does not cite any sources Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Private money news newspapers books scholar JSTOR July 2014 Learn how and when to remove this template message The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject You may improve this article discuss the issue on the talk page or create a new article as appropriate June 2014 Learn how and when to remove this template message Learn how and when to remove this template message Private money is a commonly used term in banking and finance It refers to lending money to a company or individual by a private individual or organization While banks are traditional sources of financing for real estate and other purposes private money is offered by individuals or organizations and may have non traditional qualifying guidelines There are higher risks associated with private lending for both the lender and borrowers There is traditionally less red tape and regulation Private money can be similar to the prevailing rate of interest or it can be very expensive When there is a higher risk associated with a particular transaction it is common for a private money lender to charge an interest rate above the going rate Contents 1 Private money lenders 2 Private money regulation 3 See also 4 ReferencesPrivate money lenders editPrivate money lenders exist throughout all of the United States seeking a chance to earn above average rates of return on their money With that comes the risk that a private money loan may not be re paid on time or at all without legal action However in the case of a real estate transaction the lender can ask for a deed on the property in their name amp Insurance on the property the same as a bank lending money would require as collateral to help insure they be repaid in the event of a default on the loan or catastrophe to the property In that case the lender gets the property and can sell it to recoup their investment Private money is offered to clients in many cases in which the banks have found the risk to be too high or credit too poor There are a few Private Money Lenders who offer a no credit check and loan amortization Private money regulation editPrivate money lenders must comply with state and federal usury laws They are not exempt from banking laws However they may be exempt from routine regulation such as banking exams etc Further if the loan is made to a consumer the private money lender may have a limit on how many loans they may make in a particular state without being required to have a banking license In the State of New York a private lender may make no more than five loans before being required to be a licensed lender It is not advised for residential homeowners and should be considered only for business capital and with the careful advice and oversight of an accountant and real estate attorney as the collection methods may be more aggressive in the event a borrower cannot repay Private investors do not usually have the means or interest in long protracted workout agreements and will usually go to court quickly as a means of recovering their monetary investment See also editHard money loan Money supply Peer to peer lending Private equity Venture capital Loan sharkReferences edit nbsp This private equity or venture capital related article is a stub You can help Wikipedia by expanding it vte Retrieved from https en wikipedia org w index php title Private money amp oldid 1174167731, wikipedia, wiki, book, books, library,
