The Difference Between Banks and Colorado Private Money Lenders

When you’re attempting to get funding for a fix-and-flip or a new business property, is it better to go with a bank or a Colorado Private Money Lender? The answer depends on a range of factors, so let’s look at some of the pros and cons.

Banks can offer lower interest rates. Why? Two reasons. First, banks have tons of retail customers who deposit their money into savings and checking accounts. They pay their customers very little in interest (almost always under 1 percent), so they can afford to lend out funds at a lower rate. Additionally, banks can draw on federal funds at incredibly cheap rates, so they can turn around and mark up their rates to make a profit.

Conversely, private lenders get money from individuals or groups of investors who are looking for a basic return. Private lenders also aren’t backed by a gargantuan system that supposedly “can’t fail.” Rather, they take on substantial risk, so they want the possibility of a higher return.

Why Go with a Private Lender Over a Bank?

If banks can offer lower interest rates, why would anyone want to go with a Colorado Private Money Lender? After all, aren’t interest rates the only consideration when it comes to borrowing money? Not so fast. Depending on your situation, the interest rate may be less important than other factors.

For instance, if you’ve had a blemish in your financial history or your credit score isn’t perfect, you won’t fit into the banks’ narrow box and you may get turned down. With a private source, you can sit down with them, explain your plans, show them your passion for the business and you have a much better chance of getting funded.

Moreover, with all their complicated underwriting and regulatory hoops, bank loans can take a long time to come through. If you’re in the fix and flip game or you’ve got your eyes on the perfect property, you don’t have the time to wait a month for funding. With private money, you can get approved in a matter of days and have that money in your account in a matter of weeks.

Finally, banks add a lot of extra costs on their loans that have nothing to do with interest rates. Private loans can have a fee or two, but they are nothing compared to conventional loans.

Getting Private Money in Colorado

Need a Colorado Private Money Lender? You’re in the right place. We have decades of experience in the Copper State, so what are you waiting for? Give us a call today!

Dennis Dahlber Broker Ri CEO Level 4 Funding LLCDennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

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22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
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About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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