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You Work With Us For Your Private Loan
Making and servicing a
loan is like building a house or car. Its possible for
private parties to do it themselves, but they may not
end up with the result they intend. An advancement of
money which is not treated properly, may end up more
like a gift than a loan. While that may make the borrower
happy, it may not be the result the lender intended.
As well, important tax advantages and other benefits
may be lost to the parties. In the end, the parties,
as a whole, may be worse off.
We can make sure that the loan is handled properly so
that the lender and borrower are certain their business
transaction turns out the way they intended. Here is
how we do it:
1. Develop Loan
Terms.
As a licensed Maryland lender, we know the business
terms which you might consider for your loan. We can
provide you with a menu of options that you can choose
from in determining your loan terms. We recommend that
you memorialize your terms in a term sheet or memorandum
of understanding between you. This term sheet will guide
the next step in the process, the development of loan
documents.
2. Develop Loan
Documents.
The parties will need loan documents to evidence the
borrower’s loan, usually consisting of a promissory
note. Depending on the type of loan the parties make,
certain terms will be required in their promissory note,
and certain terms will be prohibited. Further, the parties
may want certain other terms. We can help the lender
and borrower determine what terms should and should
not be put in the note. In addition to the note, the
lender will want to secure the repayment obligation,
and this requires the preparation of financing instruments
or security agreements. These are not only agreements
between the parties to the loan, but, once filed, may
serve as notice to the world of the loan and security
interest. This will serve to protect the lender against
other creditors which may be owed money by the borrower.
In addition to the note, security agreements and financing
instruments, the lender may be legally required to give
certain disclosures in writing. If these disclosures
are not given, the borrower may not be required to repay
the loan. We can help the lender determine those disclosures,
and provide them for the transaction. Finally, if there
are other creditors that loan the borrower money, the
lender may need to work out intercreditor or subordination
agreements that will define expectations in the event
of payment defaults or other events during the life
of the loan.
3. Close the Loan.
We can help the parties close the loan, preparing a
settlement sheet conforming to applicable legal requirements
and loan industry standards, and having all loan documents
and financing instruments properly executed, organized
and distributed. We deliver the loan documents on a
CD which you can easily store and retrieve. We will
insure that all of the lender’s financing instruments
are properly recorded, and applicable taxes and charges
for the loan paid. In this way, the lender can be sure
of the priority and security of your loan position.
4. Service the
Loan.
As a licensed Maryland lender, we have the systems in
place to properly service the parties loan. We set up
all of our loans on an electronic platform. Our lenders
will periodically receive all relevant data regarding
the loan, including loan disbursements, payment history,
collateral value, escrow balances and disbursements.
We will send out the payment notices, and collect and
properly credit the payments. We can help the lender
track, and account for, changes in the interest rate,
if the loan is based on an adjustable rate, as well
as changes in taxes, insurance and other escrows. At
the end of the day, we will insure that the loan does
what the parties anticipate it to do. If late charges
must be assessed, or other charges and fees advanced,
we will work with the parties to make sure that happens.
5. Loan Amendments/Modifications.
Over the term of the loan, the borrower may need modifications
or amendments to loan terms in order to adjust to unforeseen
events and developments. We can work with the borrower
and the lender to accommodate those events, and insure
that the loan stays on track and the parties are protected.
6. Loan Refinancing.
By working with the lender through the entire process,
we will insure that the loan is properly documented
with a file that is consistent with industry standards
and legal requirements. Thus, if a lender needed to
obtain his capital prior to payoff of the loan, he/she
will be able to access a loan file which he/she can
use to sell to third parties. We have relationships
with various third parties who are in the business of
buying properly documented loans. In addition, we broker
loans to several very large financial institutions,
who securitize and resell the loans on Wall Street.
We have the ability to assist the borrower, if necessary,
with finding a lender to refinance his/her private loan.
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