Today’s hard money and private capital lenders are not the last resource of the bad credit borrower anymore. The new private loan market is interested in attracting the same caliber of borrower as the bank lender and stepping in to fill the lending gap that post-recession regulations have opened up. These lenders want to know that their investment will pay off (and be paid back), but it is important to keep in mind that while they may ask for much of the same documentation and information as a bank lender, the difference is in how they weight that information. What hasn’t changed about private lenders is their desire to deal directly with their potential borrower and to assess that person’s character alongside their finances. So here are the 5 Cs to keep in mind so that you can make a good first impression with your hard money lender:

1. Confidence: When you present your loan request to your lender, make sure that you know the numbers well enough that you can confidently stand behind them and assert “this is a good deal.” This isn’t about acting confident; it’s about actually being confident and showing that you are fully committed to the project you’re proposing.
2. Clarity: Before you head off to meet your lender, make sure that your documentation and application paperwork is organized and not just a stack of loose papers. And be prepared to answer any questions that the lender might ask you. Make sure that you clearly spell out what you have, what you need, and where you plan to end up so that your lender doesn’t get lost along the way.
3. Concision: Remember the adage that time is money. Show your lender that you respect their time and their money by presenting your deal in a concise manner. It is always helpful to include an executive summary with your application that outlines the major points briefly so that they can get the idea of your project quickly and then refer to more detailed documentation later on during the underwriting process. (For more about how to write a good executive summary for a hard money loan see our previous blog here.)
4. Convenience: Make approving your loan request convenient by providing all the necessary and relevant documentation to your lender upfront rather than waiting for them to contact you and request information as it is needed during the underwriting process. If you’ve followed Cs two and three (Clarity and Concision), then this one should be easy to address as it just means supporting those two with a full complement of well-organized documentation. (See our previous blog on application checklists for the types of documentation that should be included.)
5. Creativity: Present your loan request in a way that makes it stand out. This can be as simple as organizing it into a binder with colorful dividers, including photos of the property, or creating easy-to-follow graphics with financial breakdowns. Just don’t get so carried away that it looks more like an art project than a professional proposal.

The bottom line is that while none of these Cs will guarantee you a loan, if you have a sound deal then these can help you improve your chances of getting the funding to see it through.

If you have a loan request or questions about our private capital loan programs, contact Montegra at 303-377-4181.