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Private Money Lending Blog

Corey Curwick Dutton

By Corey Curwick | Mortgage Broker
or Lender in Salt Lake City, UT

Bad Credit Borrowers Seek Asset Based Financing

For bad credit borrowers, asset based financing is one of the few alternatives for credit. But what exactly is asset based financing? This is a type of non-bank loan which includes private money loans, hard money loans, or bridge loans. These are all classified as non-bank loans that are typically not credit driven. Which is to say, even bad credit borrowers can still obtain asset based financing.

The definition of asset based financing however is unique. This is essentially a type of financing that is provided based on the merits of the asset being used for collateral rather than the merits of the borrower who is taking out the financing. For example, a bank makes a loan to you based on both the merits of the property and you as a borrower. But an asset based lender is only basing the loan decision on the merits of the property. Asset based financing then, is the type of financing that a bad credit borrower can easily qualify for if the property has equity. Which is to say, the property has value in it.

If your credit has been badly affected by the housing crisis, or if you have clients that are having trouble qualifying for a bank loan, asset based financing is a viable option. Private money loans are a subject that most people do not know much about. For this reason, we are inviting you to read our blog on this topic called ‘Hard Money 101’ at this link to become more informed about this area of lending.

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