4 Reasons to Establish a Strong Relationship with Your Lender

4 Reasons to Establish a Strong Relationship with Your Lender

As a regular hard money borrower, you are not locked into a single lender. You can borrow from as many lenders as are willing to work with you. But there is something to be said for zeroing in on one particular lender and establishing a strong relationship with that firm.

Much of what occurs between lender and borrower constitutes a unique relationship that isn’t found in many other areas. Hard money lenders and borrowers need to trust one another. They need to be on the same page. All the things that go into building a strong relationship end up benefiting both parties.

Specifically in hard money, here are four key reasons to establish a strong relationship with your lender:

1. It Breeds Familiarity

It has been said that familiarity breeds contempt. That may be true in some relationships, but it is rarely true in the relationship between lender and borrower. In fact, familiarity in the hard money game can be beneficial.

As you become more familiar with your lender, you begin to understand what is needed to quickly facilitate a loan application. And remember that one of the hallmarks of hard money is the speed at which loans can be approved and funded. If familiarity between you and your lender can speed up the process even more, all the better.

Familiarity leads to you knowing exactly what documents you’ll need. It leads to your lender knowing how you normally do business. It is a lot like team members in sports. They get so familiar with one another they can work together seamlessly.

2. It Increases Confidence

A strong relationship between hard money lender and borrower increases confidence on both ends. This is especially beneficial to you, as the borrower. Confidence that your lender will come through makes you more confident in pursuing the most attractive deals.

You have confidence that your lender will offer satisfactory rates and terms. You know that your lender will approve and fund your loan quickly. You can approach every deal with the understanding that your lender has your back.

On the other hand, not having confidence in your lender forces you to be more circumspect in the pursuit of new deals. You need to be more careful about your investments and offers because you are not exactly sure how your lender will respond. It’s obviously not the ideal situation.

3. It Increases Profitability

The combination of familiarity and confidence ultimately impacts the profitability for both partners. Lenders benefit in having a constant stream of deals to fund among borrowers they know will make them money.

Likewise, borrowers with full confidence and familiarity in their lenders can pursue the most active opportunities as these present themselves. By leveraging the financial support that comes from hard money, they can turn those opportunities into profit. In the end, that’s really what it’s all about.

4. It Increases Efficiency

Topping it all off is efficiency. As a borrower, you will work with as many hard money lenders as necessary to realize your financial goals. But every lender you deal with makes what you do less efficient. Likewise, minimizing the number of lenders you work with should increase your efficiency. When you are more efficient, you are a better investor.

Hard money isn’t especially difficult to understand. As far as financial services go, it’s fairly simple. Nonetheless, it pays to choose a primary lender and work on building a strong relationship with that firm. Strong lender-borrower relationships make accessing hard money easier by breeding familiarity, increasing confidence, and making the lending process more efficient. That sounds like a winning plan to us.