An interest rate return of 14% to 21% is excellent for lenders but why are some borrowers willing to pay these rates?

The answer is two-fold:

1. The price could be worse – finance companies/equity lending companies will charge up 24% and 38%
2. Private lenders are more flexible, creative and faster to deliver than traditional lenders

Traditional lenders have lending guidelines that are often too restrictive, inflexible or intolerant for many borrowers. Examples of such restrictive guidelines include:

1. minimum income requirements
2. minimum credit rating requirements
3. minimum property value requirements
4. minimum property age/property description requirements
5. minimum employment history requirements
6. minimum down payment requirements
7. minimum payment amount requirements

Additionally, traditional lenders can be slow to actually fund the proceeds due to administrative bureaucracy.

Private lenders are easier to work with because they lack the multi-tiered bureaucracy of traditional lenders and they look at all aspects of the lending scenario, not just the standard guidelines followed by traditional lenders.