Loans are obtainable from various lenders and most people do not know about them. The financial market is very vast like any other market. Loans are obtainable at various rates, terms and condition which could be suitable to your financial need and situation.
There are several types of lenders. One of them is the private group. These types of lenders collect your personal property and give you loan on a very high interest rate; they will evaluate the current market value of your assets.
These lenders give you the loans unto three times less the cost of your property and base on the future market value of your property. The property may be fairly used and of good condition. The Lender keeps the property together with the all the relevant documents for proof of ownership; If you fail to repay the loan, the property will be sold at the exact loan amount as contained in the agreement.
The others are the conventional lenders known as the commercial banks and other financiers. They maintain a standard rate of interest in their operations. As conventional lenders, they assess the borrower credit history, cash flow projections, Profit and lost Statement and Balance Sheets of the company for the last three years.
The also take part in intermediary lending by acting as Loan Agents; in this way, they borrow money from the financial market and relent to borrowers. A development bank owned by either the state or Federal government can use them as their financial intermediaries who use the loan to finance small, medium and large scale enterprise
A development bank may set up the criteria required for lending; it is always on a soft term loan scheme. Sometimes, collateral may not be required but beneficiary must be credible coupled some considerable years of experience in such venture. Base on this assessment, a loan could be approved together with considerable grace period after the official expiration deadline.
The others are loans brokers – those who bring borrowers and lenders together known as Financial Consultants. They do not lend money to borrowers on their own account but as part of their profession, they are in contact with various lenders of several categories and are very current with the term and rates in the financial market which most borrowers do not know. The point is that most borrowers do not have the time to look for lenders raters, terms and condition but the Financial consultant does. His is to prepare all relevant financial documents that is being required on the behalf of other borrower and present it to the relevant lender(s) who he feels will be suitable to the financial need of the borrower among other lenders.
He is the Financial Adviser to the Borrower who he represents.
He charges some commission ranging from 1-10% depending on the amount of loan involve base on the market rate for service of consultants.
The other loan intermediary lenders take processing of the loan and then re-lend it to borrowers at the terms and conditions as approved by the original lender. This intermediary also has his commission from the amount of loan approved and sometimes may add up some interest in order to keep his business going. That is, if the original lenders’s rate is 3% he may add 1% onto the official rate and may charge the borrower 4%; the 1% becomes his commission or profit in the deal.
