The people who are feeling the pinch most from the current credit crunch are the true producers in our economy. Namely, entrepreneurs and self-employed business owners who haven’t had W-2 income for years and those investors who also have non-traditional sources of income. Why? Since Stated Income Loans are few and far between, many of these producers are unable to acquire or refinance real property or obtain traditional financing for their projects and businesses.

Although the credit crunch is putting many of us in a temporary holding pattern, there are tons of sources of private money out there.  These private money lenders are capitalizing, literally, on the opportunity that our credit crisis has presented to them.

But what is private money? A lot of people will immediately say that private money is just another word for ‘hard money’ but this isn’t entirely true. I guess it depends on what you consider to be ‘hard’ money.  As I see it, hard money is money that rents for anywhere between 18+ percent with additional points on top of that.  Private money, on the other hand, can rent for anywhere between 9-18 percent plus points.

But with so many private money lenders popping out of the woodwork to take advantage of this opportunity, how do you find the legitimate sources?  And with so many private money sources, terms, criteria etc. to weed your way through, how do you find the right lender and loan product for your unique needs?

That’s why it’s essential to have a broker you trust involved in helping you find private money for your business. Particularly when seeking hard money, a broker that has your interests in mind is crucial to your success.  As a business owner or investor, searching for private money without a trusted broker is like approaching the bench and pleading your case to a Judge without an attorney. Nine times out of ten that Judge is going to find you ‘guilty’ which is analogous to getting declined by a lender or being stuck with unfavorable terms.

Equal to your attorney and CPA, a qualified and experienced broker is a key component of your advisory team for your business and other ventures.  These days, the financial broker will replace the banker on your team of advisors.