Short-Term Private Lending: When Is It the Right Solution?

Not every financial situation fits neatly into a traditional bank mortgage.
Sometimes, speed and flexibility matter more than long-term rates.

That’s where short-term private lending can provide a powerful solution.

At Centum Chartered Finance, we help Ontario borrowers use private lending strategically — not as a last resort, but as a carefully planned financial tool.

What Is Short-Term Private Lending?

Short-term private lending refers to mortgage financing provided by private individuals or private lending institutions, rather than banks or traditional lenders.

These loans are typically:

• Short-term (6–24 months)
• Asset-based (focused more on property value than income)
• Designed for temporary financing needs

Approval is based primarily on the property’s value and equity, rather than strict income or credit rules.

When Does Short-Term Private Lending Make Sense?

Private lending is not meant for every situation. However, it can be the right solution during specific financial transitions.

1. When a Deal Needs to Close Quickly

Bank approvals can take weeks.
Private lenders can often approve and fund within days, which is ideal for:

• Fast property purchases
• Time-sensitive investments
• Urgent refinancing scenarios

2. When Credit or Income Challenges Are Temporary

If you’ve experienced:

• Temporary credit issues
• Recent job change or self-employment
• Inconsistent income

Private lending can provide short-term relief while you work toward qualifying for traditional financing.

3. To Bridge Short Financial Gaps

Private mortgages are useful for bridging situations such as:

• Buying a new home before selling your current one
• Completing a renovation before refinancing
• Paying out financial obligations before restructuring

This allows you to move forward without waiting for perfect timing.

4. To Stop Power of Sale or Foreclosure

When time is critical, private lending can help stop property loss by:

• Paying off existing arrears
• Clearing legal or tax issues
• Refinancing dangerous debt quickly

Speed and structure can make the difference between saving or losing a property.

5. When Alternative and Bank Options Have Been Exhausted

If banks and alternative lenders have declined your application, a private lender may still provide financing based on equity and asset value.

This is especially common for:

• Unique properties
• Rural homes
• Commercial or mixed-use properties
• Borrowers with complex financial profiles

Advantages of Short-Term Private Lending

Private mortgages offer key advantages when used strategically:

✔ Fast approvals and funding
✔ Flexible lending criteria
✔ Credit flexibility
✔ Customized loan structures
✔ Short-term solutions for long-term goals

Risks and Considerations

Private lending should always be approached carefully.

Potential downsides include:

❗ Higher interest rates
❗ Lender and broker fees
❗ Short repayment terms
❗ Risk if no clear exit strategy exists

This is why proper planning and professional guidance are essential.

Why an Exit Strategy Is Critical

A private mortgage should never be taken without an exit plan.

An exit strategy might involve:

• Refinancing into a traditional mortgage
• Selling the property
• Improving credit or income position
• Completing renovations to increase value

At Centum Chartered Finance, we help structure every private mortgage with a clear and realistic exit strategy to protect your future.

Why Work With Centum Chartered Finance?

Private lending requires expertise, not just access.

We provide:
✔ Access to reputable private lenders
✔ Full deal structuring and strategy
✔ Clear cost explanations
✔ Risk assessment
✔ Planned transition to better financing

Our goal is not to place you in private lending — but to help you move beyond it when the time is right.

Is Short-Term Private Lending Right for You?

Short-term private lending can be an effective solution when used correctly, with the right planning and professional support.

If you’re facing a time-sensitive financial need or have been declined by traditional lenders, we can help you explore this option safely and strategically.

Centum Chartered Finance
Trusted Mortgage Advisors Serving Ontario

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