Why developers are borrowing for 11% a year?

Every entrepreneur and property developer is looking for best measures to save money and earn a solid profit, so why would someone who strives for best quality at a lowest cost take credit obligations with an interest rate of 11% per annum?

The answer is not unequivocal as there are several advantages to be taken into account when evaluating financing possibilities on P2P lending platforms:

1.Speed

When using traditional financing methods, real estate developers often fail to get the desired results within the required timeframe – banks make decisions slowly, the period from application submission to receiving funding may be up to 4-6 months, while P2P lending platforms can provide an indicative offer within 24 hours of submission and money on the borrower’s account within 2 weeks. Developers are happy to use this opportunity as a “bridge” – you can start working on your project while the bank is still evaluating it!

2.Loan Period

When considering the possibility of using a P2P lending platform for financing your project, it should be taken into account that this is a short-term solution for the sales period of the property, during the development phase of the project or a bridge loan. Major benefit can however be seen in the fact that EstateGuru enables early repayments with no penalties, so should the borrower sell one of the apartments or establish long-term financing, they can repay the loan earlier if convenient. This means that if the funds were used for 6 months and 6 days, then the interest payment will be calculated for exactly 6 months and 6 days.

3.No monthly payments
P2P lending platforms normally enable flexible repayment schedules, for an example the possibility to pay both interest and principal at the end of the period – you won’t find this kind of opportunity in traditional financial institutions. This significantly boosts work on a new project by enabling the borrower to fully focus on the project, with no additional liabilities each month. Developer can use money to actually finance the project, not to pay interest!

4.Additional marketing

What is the cost of a new development project’s sales campaign in the media and how effectively can you reach people who are interested in real estate? EstateGuru platform has more than 13,000 registered investors from different countries interested in property and development – additional marketing to potential buyers guaranteed!

5.Communication and knowledge

A partner who understands your business and sees a project just like you – sounds incredible? Less bureaucracy, more business – our goal is to let EstateGuru’s clients spend the majority of their time on project implementation, not on arranging paperwork!

If you have a project that you want to develop, or an idea to realize while selling property, write to info@estateguru.co and we will help you find the best way to achieve your goals.

  • Peter Michael

    Nice article with many good arguments. There are so many good benefits for all involved.

    Peter Michael, MyInvestment.Blog