an individual or entity is looking to borrow money, there are a lot of different routes they can go. In some cases and if the borrower has a strong credit score, securing a loan from a bank is the best way to go. These loans typically come with fixed interest rates (so long as payments are made on time) and long timelines during which they need to be paid back, so they make the most sense for borrowers who want to secure a loan that they can pay back in small installments over a long period of time.

For other borrowers, private money lenders are a better option. When you hear the term “private money lender”, people are typically talking about a firm, company, or business that lends money to individuals and entities when they need to secure capital for immediate purchases. An individual who is wealthy might secure a private money loan to purchase a jet, and then they’ll pay that loan back quickly once other capital of theirs comes in. These types of loans usually have higher interest rates and shorter periods of time in which they have to be paid back, but they’re also usually easier for individuals and entities to get. The type of lender you use just depends on your situation and what you’re borrowing the money for.

There are all sorts of borrowers that are interested in securing money from a private or hard money lender. As was just mentioned, sometimes wealthy individuals will secure a private money loan to purchase an extravagant item, but those aren’t the only types of borrowers that use this kind of lending. Another example of someone who might use a hard money loan is a person with a sizable amount of assets but not a very good credit score. Hard money loans are usually tied to a person’s assets, not their credit report, so as long as they have enough assets to cover the loan should they not be able to repay, they can secure a short-term hard money loan. They can then use that money to make their purchase, and then pay the loan back quickly with another line of capital.

Another type of borrower that commonly uses hard money or private loans are real estate investors. These individuals will take out hard money loans to buy property, and then they’ll pay the loan back quickly once they either sell the property they’ve just purchased or once they sell another property that they already own. This type of lending is common in the real estate industry because of how quickly buildings and homes sell. It’s critical that investors are able to secure capital quickly. If they can’t, they might lose out on the opportunity to purchase a building before someone else does.

These are just a few examples of the kinds of borrowers that use private money lending firms like Private Client Investments. There are others, of course, but these are the main groups of borrowers using this type of lending.