The difference between private lending and bank loans
Private lending procedures are simple.
Different from bank loans, private financing needs to provide a large number of materials such as business license, code certificate, accounting statements, purchase and sale contracts, identity documents of the person in charge, and capital verification reports. And you don't need to go through the formalities of signing and notarization. Generally, it is only necessary to review the property certificate and repayment ability and sign a contract.
Private lending funds can be borrowed as needed.
According to the normal loan procedure of the bank, it takes about one month for an enterprise to apply for a loan from the bank to obtain a loan. Even for customers with long-term cooperation, it will take about 10 days at the earliest. Private lending generally takes only 3-5 days or even the same day to get the required funds.
Private lending conditions are relatively low.
Small and medium-sized enterprises have high loan risk, small demand and high management cost. When banks issue loans, they are generally required to provide sufficient mortgage collateral. Moreover, private lending generally has a lower threshold, which is obviously more suitable for small enterprises.
Efficient use of funds.
The term of bank loans generally appears in the form of fixed term, while private lending can be repaid immediately, which is suitable for small enterprises with high frequency of use.
Private lending saves money.
Because private lending saves notarization, appraisal, capital verification, mortgage (pledge) registration and other procedures, it also saves a lot of agency fees. It is these comparative advantages that make the private financing market increasingly active.