The Advantages Of Asset Based Lending

The traditional mortgage lending process is a long tedious affair. Traditional mortgages require a lengthy application after which there is a seven-day waiting period from disclosure before a loan can close. And once a borrower has received a Closing Disclosure, they must wait an additional three days before the loan may actually close. And those are just the time frames imposed by the Consumer Finance Protection Bureau. Anyone that has gone through the traditional mortgage process knows this is usually much longer than the ten days required above. The time involved in obtaining credit reports, income information, bank account information, appraisals, and all the other moving pieces of these types of transactions often adds up to more than thirty days.

In addition to the cost of lost time, the traditional mortgage also involves an intrusive credit review, with often difficult to meet standards. The financial crisis of 2008 dried up a lot of the liquidity in the financial market, and the requirements for borrowing money became far more stringent. Whether or not this has been a good thing, stabilizing the residential home loan market may be debated, but it has negatively impacted the commercial real estate borrower. Small companies and real estate investors often do not have the net worth, credit scores, or cash flow to qualify for a traditional mortgage loan from a bank or mortgage company.