Originators who work with private money lenders
need to understand how the money will be used
By Jack Suddarth
President, Equity Wave Lending Inc., and
Jason E. Goldstein
Attorney, Buchalter APC
Illustration by Jeffrey Sabourin
Private money lenders predominately originate what are commonly referred to
as business-purpose loans, usually secured by the value of a parcel of real estate.
There’s another type of loan out there. It’s the consumer-purpose loan.
How the borrower uses the money from a loan matters greatly in the wake of compliance
legislation passed in recent years. Originators who work with private money lenders
need to understand this — particularly the difference between a business and consumer
loan — or they risk causing the lender a great deal of heartache. > >