These entities facilitate short-term loans secured by real estate or other assets. These loans are often utilized by investors and developers seeking rapid funding for projects that may not qualify for traditional bank financing. For example, a real estate investor might use this avenue to acquire a property quickly for renovation and resale, leveraging the asset as collateral for the loan.
This type of financing plays a significant role in real estate investment and development cycles. It provides a flexible funding source for projects that require speed and efficiency, enabling investors to capitalize on opportunities that might otherwise be missed. Historically, this lending approach filled a gap in the market, offering alternative financing options when conventional lenders were unable or unwilling to provide capital.
