By KeyCrew Media
For decades, private lenders were where real estate borrowers went after a bank said no. That order is changing. A growing share of investors and property owners now start with private capital, even when they might qualify for a bank loan.
H. Jack Miller, founder of Gelt Financial, a national private lender that has financed commercial and investment real estate since 1989, says that shift is already here. Asked whether private capital has become the default choice for some borrowers, he did not hesitate. “Absolutely,” he said. “It’s definitely the first call to a lot of people for a lot of reasons.”
Why Borrowers Are Skipping the Bank Line
The main reason is time. Bank loans can take months to approve and close, and the requirements around credit, income documentation, and payment history leave many borrowers out entirely.
“The reality is the banks are so tough and so difficult. It takes so long,” Miller said. “It’s left a lot of borrowers on the sidelines.”
Private lenders focus primarily on the property and whether it can support the debt. Gelt typically approves deals quickly and closes in about a week to 10 days, which matters when a purchase deadline or a sheriff’s sale is approaching.
That speed costs more. Private loans generally carry higher rates than bank loans, and Miller does not downplay it. He compares it to paying a rush fee. “Maybe it’s $100 for something, and for a rush fee, it’s $125,” he said. “Sometimes we need to pay that rush fee. And that’s sometimes what private credit is.”
According to Miller, the amount of money private lenders put out grows every year, while bank lending shrinks by comparison. “It’s filling a gap,” he said. “And the gap is growing.”
Bank Lending Moves in Cycles
Some observers expect banks to win back borrowers as the economy stabilizes. Miller sees bank lending as a cycle driven largely by politics and regulation, not a one-way trend.
He describes the current administration as lender friendly, with looser oversight of banks, while noting he is not judging whether that is good or bad. Ten years ago, he said, banks were far tougher.
He remembers the years after the 2008 financial crisis, when regulators were closing banks every week and almost no new banks were opening. Today, new banks are launching again and guidelines are loosening.
“What will happen is it’ll catch up with them,” Miller said. “There’ll be a crash and then they’ll tighten up. Expansion, contraction. It happens over and over again.”
For borrowers, that cycle is the argument for private capital’s staying power. When banks pull back, as they have repeatedly, private lenders are the ones still funding deals.
What Real Estate Financing Could Look Like in Five Years
Miller is candid that no one can predict the next five years with confidence. What he expects is significant change driven by technology, especially AI and robotics.
He points to parking as one example. Apartment and office buildings are designed around large parking areas, but electric and self-driving vehicles could reduce how much parking properties need. Robotics could reshape how and where people work, which affects demand for office and industrial space.
“I don’t necessarily think worse,” he said. “But I just think it’s going to be changing dramatically.”
He urges perspective. More than a century ago, he notes, one of the biggest problems facing New York and London was horse manure in the streets. Newspapers treated it as a crisis. The car made the problem disappear, and new ones replaced it. He expects today’s disruption to settle the same way, with adjustment and opportunity along the way.
What Borrowers Should Keep in Mind
The practical takeaway for borrowers is to treat private capital as a tool, not a last resort. It makes sense when speed, flexibility, or a bank’s rigid criteria would otherwise stop a deal, and when the deal itself can support the higher cost.
Borrowers comparing options can review the loan types private lenders offer, such as bridge and foreclosure bailout financing outlined on Gelt’s lending page, and weigh those terms against what a bank realistically offers on their timeline.
Asked how he hopes this period will be remembered, Miller kept it simple. Private capital, he said, should be known for helping borrowers get the financing they need when the traditional system could not.
About Gelt Financial: Gelt Financial LLC is a national private lender and distressed debt buyer with over 37 years of experience across commercial and investment real estate. Operating in 37 states, the company provides bridge financing, foreclosure bailout loans, and non-performing loan acquisitions for real estate investors, operators, and institutions.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
