Updated over 5 years ago on . Most recent reply
Creative structures for Private money loans
I have a borrower who usually asks for 10 month Private money loan terms but always finishes his rehab projects early. I don't mind the early payout, but it is difficult to plan on keeping this money in play when it comes back sooner than expected. Does anyone know of creative ways to encourage borrowers to accurately estimate, then stick to, their borrowing terms?
Most Popular Reply
Yes! Insert prepay penalties. They don't have to be onerous. Just little nudges that reinforce a conversation you had with the borrower over your concerns which are totally legit. Easy peasy!