As one of the fastest-growing types of lending in recent years, commercial lending companies have seen an increase in interest from individuals. Due to their convenience and availability, these organizations can be the perfect place for people interested in short-term and long-term borrowing for personal or business needs. But with the increased popularity has come an increased number of risks; scammers may take advantage of those individuals not familiar with this type of lending company.
To combat these issues and protect your money, here are a few things to consider when partnering with a commercial lending company.
Make sure you’re dealing with a reputable organization
This can be done by asking for references from others who have used the company’s services. You should ensure that the commercial lending company has a physical location and obtain the information for their website and reviews from their past clients.
Evaluate all loan offers before accepting one
Don’t let yourself be pressured into signing with the first group that offers you a loan. Before making a decision, make sure you compare the rates and terms of the commercial lending company that you’re considering with at least two or three other companies that you believe may offer better options.
Make sure all transfer fees are disclosed
Many commercial lending companies will not cover these costs but will instead pass them onto those individuals who borrow from them. You should be made aware of the total cost of borrowing before agreeing to a loan.
Make sure your funds are secure
You should make sure that all financial information used for loan approvals is current and you have the copies for yourself. While this may not seem like an important detail, it’s important to ensure that you don’t sign on the dotted line because you were simply distracted by other requests made by the commercial lending company, which may have been missing key information.
Don’t be persuaded with hidden fees and additional costs
These may include fees for maintenance and other fees which you didn’t know about until you got your first loan payment. Make sure all these fees have been disclosed to you, and don’t be fooled into thinking that because they include a small fee in the total amount of the loan, it won’t affect your ability to pay back the money.
Understand loan terms before agreeing to them
You’ll want to make sure you read over all loan documents offered and understand the terms that are being offered to you. This includes how much money you can borrow, the length of time that it’s available for, the rates that they offer, and the terms on which they will allow you to repay what you owe.
If you’re looking for a reliable commercial lending company, Insula Capital Group has got you covered. We offer a range of private loans, including hard money construction loans, flip loan financing, business bridge loans, and other products. Contact us today to learn more about our financing services.