Private money lenders will give you the amount immediately without much of paper work but they charge a very high interest rate. On the other hand, banks and other financial situations involves a lot of paperwork and time to sanction the loan but then, they charge a low interest rate.
Private money lenders will not check your financial status and background before lending you the amount, whereas banks will do your complete background check and earnings in order to ensure that you will be able to repay back the principal amount along with the interest rate on the same.
Whether you plan to go for a private money lender or banks for your loan amount, it is very important for you to understand your business needs and forecast your future earnings before opting for any of these options. Based on your ability to repay the loan amount, you must select the right source. You should also take into consideration as to which option is giving you financial flexibility in terms of repayment and which allows you to do enough savings as well along with the repayment of the loan. Thus, considering all these factors and working out a decent policy for you will actually help you to decide on to the best option. Once you are fully aware about your business needs and future planning, it gets easier for you to select a wise source accordingly. When everything goes hand in hand and when both the parties i.e. the money lender and the borrower are convinced with each other’s process, only the policy will work in favor of you and it can prove to be beneficial, in the long run.