One of the most common questions that our customers ask us is how do we differ from banks? It can be quite confusing to someone without knowledge of the financial world to tell the difference between what banks do and what private institutions like mortgage brokers do. Although there are many similarities, there are also many distinct differences between us. As a private lending institution, we offer many advantages to you the consumer.
Different function
While both private institutions and banks serve as sources of money for a wide range of clients, banks have typically served as the backbone of national economies by facilitating the flow of money, regulating the money supply, and serving as places that people can deposit cash safely. Private lenders do not serve many of those functions. We are here to act as lenders for people with different sets of needs, and we don’t serve the same economic function as major banks.
Different regulations
Not only are we not relied on by the government to regulate the economy, we also are not subject to the same stringent regulations. Banks are closely monitored and regulated, especially after the crisis of the last decade. On the other hand, we have relatively fewer regulations, allowing us to operate more freely and conveniently. We are subject to less oversight, meaning we can offer more favourable packages to our clients.
Different practices
While getting a bank loan can be incredibly difficult for some people because they are wary of lending, we don’t necessarily take on most of the precautions that banks do. We don’t put weight on the same criteria, nor do we hold back when we feel like we have a good candidate for a loan. We might have to offer different rates, but we will certainly not have the same hurdles to jump through that a bank would. We also offer a wide variety of loans at different rates for a wide range of projects such as home loans, renovations, and other projects both short-term and long-term.
Without banks our economies wouldn’t be the same. There certainly wouldn’t be as much economic prosperity, either. Still, that doesn’t mean that they can do everything. There are many things that private institutions are better at providing. It is important to know how we are different from banks before you come in to get a loan from us.
