GlobeSt.com turned to Eagle Group Finance President Brian Good for an exclusive interview about why private lending is on the upswing and how private lenders can improve their bad reputation. In the article “Debunking Private Banking Misconceptions” Mr. Good explains that banks aren’t lending as much as people believe and it is the private lenders who are able to benefit. “We don’t see banks softening their criteria to increase their borrower pool anytime soon, and private lenders are picking up the slack in a permanent way,” says Mr. Good. “It’s really about execution and flexibility. A bank underwriting process is generally 60 days, sometimes more, and you can be inches from the finish line only to have someone with little understanding deny the loan. A private lender can underwrite a deal in two weeks, and the deal is done without a headache.”
Though some investors are flocking to private lenders, the industry as a whole still maintains a less than stellar reputation. As banking regulations continued to increase, deals became riskier to the bank, so they chose the easy path to kick the loan. The borrower was faced with the last choice of a private loan. Faced with a dire situation, unscrupulous lenders charged exorbitantly high interest rates taking advantage of the borrower’s compromised situation. “The bad reputation carries over from bad people engaging in these types of practices, unfortunately,” Mr. Good added. The entire point of the loan is to help the borrower achieve a business goal, and it’s in our interest that to achieve that goal.