Why is it difficult for deserving borrowers to get a bank loan?

Traditional lenders, like banks, will typically give loans out based on how income was earned. So while many entrepreneurs earn income with 1099 sources and not W2s, it can create an issue for the underwriter to approve investment loans effectively. This leads to many qualified borrowers being told “no” by traditional lenders.

Why a good track record isn’t enough…

Sometimes, a great income or history of on time payments isn’t enough to get a loan, especially a secondary loan. This highlights the stiff nature with which banks apply lending standards to all Americans in the wake of the financial crisis, and even more so now due to the pandemic.

Pre financial crisis, the standards that the banks and other lenders applied to borrowers were much too lax. This contributed to the height of the housing bubble. So now, traditional lenders are being held to higher standards by regulators tasked with making sure another housing bubble does not form, though it remains to be seen how much tighter those standards will be over the long term.

Most borrowers are worried about the following factors

  1. Difficulty in getting the loan: Post-2008 crisis, strict lending guidelines require a significant time commitment to comply with manual paperwork and application requirements.
  2. Time & Inconvenience in approval: Time needed to close on a loan can be months and come down to the last few days for the underwriter to approve.
  3. Banking Gaps: Historically, specialty finance deals have not been able to secure bank financing as nontraditional asset. Many of these finance deals do not fit into the traditional lenders’ analysis and underwriting processes.

This will only continue, especially in the wake of a pandemic.

Historically-low interest rates and tighter lending standards has made many mortgages and small business loans more trouble than they are worth for most traditional lenders like banks. Lenders incur similar costs whether they underwrite a small loan or a loan worth 10X the cost.

The economy would benefit in a number of ways from increased lending. Individuals would be able to buy investment properties and add real estate to their retirement portfolio and increase consumer spending. Small businesses would be able to expand and create more opportunities, but traditional lenders are not willing to budge or loosen their restraints.

But hope is not lost.

Yieldi can make it very easy for a borrower to get a non-traditional loan in an easy, quick, and effective manner. While Yieldi understands there is risk with these loans, borrowers can feel at ease knowing there is another option.

Reliable funding for your real estate needs. We fund quickly in a no-nonsense approach.

As a borrower it is super simple.

  1. Create an account: Apply for your loan and get a fast and reliable response.
  2. Borrow: From the time you receive your term sheet and all the way through closing, Yieldi will guide you through every step of the process.
  3. Track Progress: With our online portal, you have access to all of your account information including payoff information and more.

We pride ourselves on our unique programs: we offer both Commercial and Residential Loan Programs to borrowers & brokers seeking to work with Yieldi

Yieldi is the most broker friendly private lender offering a wide range of loan programs for your borrowers.

Broker Benefits

  1. Approvals within 24 hours
  2. All communication directly with you
  3. Loan Programs to meet all of your needs
  4. Broker Portal to manage your active borrowers
  5. Contact us to see how easy it is!