Should I get a private loan from a non traditional bank?

Its a question that arises whenever businesses or individuals need to get approved for a loan fast to help them with their day to day work and lives.

Lending is dominated by large banks and institutional investors. However, if you are unable to get approved for a loan from these larger institutions, there are options from alternative loans from smaller companies looking to be part of the market.

These smaller lenders usually would be more expensive because of the risk they are taking to lend to someone who does not qualify with a traditional bank. But because there are more and more companies becoming involved in this part of the lending industry, competition will reduce the added expense to get loans.

Even more so, because of the increased market share by smaller lenders, big banks and institutions will start to get more flexible with their lending criteria, further allowing more competition for those who otherwise can’t t get approved for a loan. According to an article by Gabriella Kindert of AltFi.com, one of the most important trends in 2017 is for institutional investors increasing acceptance to alternative lending.

If you’r an individual looking for a small cash advance (pay day loans), student loan, an auto loan, or a hard money loan to purchase property, this is a positive trend, as private loan interest rates are going down and will help paying bills easier.

If you’r a small business, getting a line of credit or a loan on your assets, will mean more money for other investments because of the lower interest rates from small business lenders.

So the simple answer is not a yes or no, but a “definitely look into it” , because now  the benefit of getting a private loan for the borrower is much better than before.

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