Who Needs A Non Traditional Loan?
There are many circumstances where a non traditional loan meets a specific need. There remains a common misconception that non traditional loans are for those who are unable to obtain institutional financing due to credit issues. While this is sometimes the case, we often find creditworthy individuals or businesses choosing non traditional financing options.
- When Speed Counts – Obtaining a commercial or investment loan from an institutional bank can take 90-120 days, sometimes longer. Non traditional loans can be closed in days or weeks.
- Property – Certain properties are not eligible for bank financing. Some examples include properties listed for sale or in need of renovation. Where banks are generally rigid, non traditional lenders are flexible. We provide the borrower the capital and time needed to achieve their goal.
- Short Term Need – Many borrowers will accept higher financing costs for a short duration to avoid the stress and delay in procuring institutional financing.
- Capital Markets Disruption – The current financial turmoil provides a great example. Banks and other regulated financial institutions are reducing their 7 lending activity in an effort to preserve capital. This in turn creates a difficult lending environment, even for creditworthy borrowers looking to finance strong real estate assets.
- Balloon Payment Due – Sometimes borrowers simply need more time to acquire institutional financing. We can provide a temporary solution by offering a non traditional “bridge” loan.
- Distress Sale – Non traditional loans can provide the funds needed to act quickly when there is an opportunity to acquire real estate at a discount to market.
- Investment – Non traditional loans provide fast access to cash needed to participate in other investment opportunities such as capitalizing or acquiring a business.
The list goes on. The point here is that there are many reasons a borrower might consider non traditional financing to meet their specific objectives. ICF is here to partner with them to achieve their goals.