Private funding is an alternative way of funding. Typically a borrower would take out a private funding loan if they don’t meet the criteria for commercial finance with the banks.

Private funding should be viewed as a short term solution to your finance needs with must funders requiring you to have a clear exit strategy.

Interest rates with private funders are higher than what the banks offer and there is good reason for it. Private funders are often a group of investors who are looking to get a better return on their money than what the banks can offer. Because they are not a bank, they can often and do lend money to those individuals who don’t qualify for a normal business or commercial loan. The lending criteria is not as strict with private funders as banks.

Private funding is primarily for business use as lending restrictions for companies are not as tight as those for individuals, private funders like to lend to companies.

Much consideration needs to be given before taking out a privately funded loan due to the costs but in some cases it is a necessary solution. This is a discussion to be had with one of our lending specialists.