Why Your Local Private Lender Can Close in 10 Days (When Big Banks Need 60)

It's Tuesday morning, and Mike Chen has a problem—but it's a good problem.

Mike runs a commercial HVAC company in San Antonio. He just got the call every contractor dreams of: a large medical complex needs a complete system replacement, and they want to start in three weeks. The contract is worth $400,000, but Mike needs $200,000 to buy the specialized equipment upfront.

He calls his business banker first. They've had a relationship for twelve years. The banker is sympathetic and encouraging: "We can definitely help you with this, Mike. Just need you to fill out the application, get us your last three years of tax returns, updated financials, equipment quotes, and we'll get this over to underwriting. Should have an answer in 45 to 60 days."

Mike's heart sinks. The project starts in three weeks. In 45 days, the contract will be awarded to someone else.

He hangs up and calls someone his buddy recommended—a local private lender who does equipment financing. Three days later, he's approved. Ten days after that first phone call, the money hits his account. Mike gets the contract, completes the job, and repays the loan in eight months.

Speed isn't just a convenience. In business, speed is often the difference between opportunity seized and opportunity lost.

Why Big Banks Can't Move Fast (Even When They Want To)

Here's something important to understand: it's not that your banker doesn't want to help you quickly. The banker you're talking to probably genuinely wants to get you funded. But they're operating within a system that simply cannot move at the speed many borrowers need.

The system dictates the timeline, not the people.

When you submit a commercial loan application to a major bank, it doesn't stay at your local branch. It gets sent to a regional or national underwriting office where analysts who've never met you—and never will—review your file. These analysts are following strict guidelines, checking compliance boxes, and feeding information into automated systems that flag anything unusual for manual review.

Then there are the committee approvals. Depending on the loan size, your deal might need sign-off from multiple levels of management. Each level takes time. Each level might have questions. Each level might request additional documentation.

Add the regulatory requirements: third-party appraisals, environmental inspections, title searches, verification of deposit letters, tax return transcripts from the IRS. Some of these have mandated waiting periods. The appraiser might be booked out two weeks. The title company needs ten business days. The IRS transcript takes 7-10 days to arrive.

And here's the cookie-cutter problem: If your deal fits the exact template—W-2 income, strong credit, straightforward financials, standard property type—the process can be relatively smooth. But if anything about your situation is unique, the timeline extends dramatically.

Self-employed? Add two weeks for additional income documentation.

Own multiple properties? Add time for each one to be reviewed.

Recent divorce, job change, or business restructure? Expect questions, explanations, and delays.

This isn't a bug in the system—it's a feature. Banks are designed for scale and consistency. They process thousands of loans using standardized procedures that protect them from risk and keep them compliant with regulations. This structure works brilliantly for their business model.

But it creates a gap in the market. A gap that local private lenders fill.

The Private Lender Speed Advantage

What makes a small private lender able to close a deal in 10 days when a bank needs 60?

The Decision-Maker Is on Speed Dial

When you call a local private lender, you're often talking directly to the person who will approve or decline your loan. Not a loan officer who submits to underwriting. Not a branch manager who forwards to a committee. The actual decision-maker.

Questions get answered in real-time. Concerns get addressed immediately. There's no application disappearing into a black box for weeks while you wonder what's happening.

"Can you provide proof of the contract?"

"Yes, I'll email it right now."

"Great, I see it. Okay, let me look at your equipment quote..."

The conversation happens in minutes, not in memo form over weeks.

Local Knowledge Replaces Lengthy Due Diligence

Here's something a local private lender said to me once: "I don't need three comparable sales reports for that property. I drive by it twice a week. I know exactly what it's worth."

This is the power of local knowledge. When you're lending in your own market—the market where you live, do business, and have for years—you already have context that a distant underwriter needs weeks to gather.

You know which neighborhoods are improving and which are declining. You know which business districts are thriving. You know what local comparable properties actually sold for, not just what an automated valuation model thinks.

You can assess a seasonal business that looks terrible on paper to a banker but makes perfect sense if you understand the local economy. The landscaping company with no revenue from November through February? Banks see inconsistent income. Local lenders see normal seasonality for this market.

Trust, but verify versus verify everything from scratch.

Flexible Underwriting

Banks use rigid criteria because they have to. When you're making thousands of loans, you need consistent standards.

Private lenders can look at the full picture. They can apply common sense. They can structure creative solutions.

The borrower has 1099 income that fluctuates month to month but has been profitable for a decade? A bank's automated system flags that as high risk. A private lender sees a stable business with normal cash flow patterns for that industry.

The property needs some work before it appraises high enough for a bank's loan-to-value requirements? A bank says no. A private lender structures a deal based on after-repair value with a construction holdback.

This flexibility doesn't mean sloppy underwriting. It means nuanced underwriting. It means being able to say yes to good deals that don't fit in standardized boxes.

Streamlined Process

Private lenders can move fast because they've eliminated unnecessary complexity:

• Fewer intermediaries between borrower and decision
• In-house decisions instead of outsourcing every step
• Technology that helps instead of adding bureaucracy
• Documentation that captures what matters without drowning in paperwork

One private lender I know has a simple rule: "If I can't explain why we need this document, we don't ask for it."

When Speed Matters Most

There are certain situations where the ability to close quickly isn't just nice to have—it's the entire ballgame.

Real estate opportunities often have tight windows. Foreclosure auctions require cash or proof of funds. Off-market deals happen because a seller wants to close quickly and quietly. Distressed properties get multiple offers, and the one who can close fastest usually wins—even if it's not the highest price.

Business opportunities appear and disappear rapidly. Equipment becomes available at a steep discount, but the seller has three other buyers and needs an answer by Friday. A competitor is closing their doors, and their customer list is for sale, but only for the next week. A bulk inventory purchase could save 40% off normal cost, but it's first-come, first-served.

Bridge scenarios are where speed becomes critical. You're waiting on SBA approval that will take 90 days, but you need money now to hold the deal together. Your property is selling and will close in 60 days, but you need cash today to buy your next one. Your seasonal business needs working capital before the busy season starts, and waiting six weeks means missing the revenue window.

The cost of delay is real. These aren't hypothetical situations. Every week, business owners lose tangible opportunities because they couldn't access capital fast enough. The deal doesn't wait. The opportunity doesn't pause. Someone else steps in and seizes what you couldn't.

Speed Doesn't Mean Reckless

It's important to understand: fast doesn't mean sloppy.

Private lenders who close deals in 10 days are still doing due diligence. They're still assessing risk. They're still documenting the transaction properly. They're just doing it efficiently instead of bureaucratically.

They're also charging higher interest rates than banks, which compensates them for the higher risk they're taking on deals that banks won't touch. That's not predatory—it's honest pricing for the value being delivered. Speed has value. Flexibility has value. The borrower is paying for both.

And here's something else: private lenders often have significant skin in the game. They're not just managing other people's money—they're investing their own capital alongside their investors. They live in the same community as their borrowers. If they make reckless decisions, it impacts their personal wealth and their local reputation.

That's a different kind of accountability than a bank loan officer who gets moved to a different branch every three years.

The best private lenders strike a professional balance: fast decisions backed by proper documentation, relationship-based lending conducted in a businesslike manner, flexible deal structure with crystal-clear terms.

Two Different Tools for Different Jobs

Here's the truth: both big banks and small private lenders have their place in the market.

Banks are best for standardized, patient capital. If you have strong conventional credit, straightforward financials, and aren't in a rush, a bank will likely give you the lowest interest rate available. Their systems are designed for this, and they do it well.

Private lenders are best for speed, flexibility, and nuance. If your deal is time-sensitive, if your situation is complex, if you need someone who can make a common-sense decision instead of checking boxes—this is where private lenders excel.

It's not that one is better than the other. They're different tools for different jobs. Markets need both.

The challenge for private lenders isn't usually on the lending side—they've figured out how to move fast, assess risk locally, and structure creative deals. The challenge is often on the back end: the investor operations.

You can make quick lending decisions all day long, but at month-end, you still need to calculate accurate interest for 40 investors, generate professional statements, track deposits and withdrawals, and maintain records that would survive an audit.

Speed in underwriting, accuracy in accounting. Both matter.

If you're running a private lending fund that prides itself on closing deals while the big banks are still reviewing the application, your investor operations deserve the same level of efficiency. Your investors are trusting you with their capital because you're nimble and professional—not one or the other, but both.

That's the competitive advantage. That's what lets you say yes when others say "maybe in 60 days."

And in business, that difference changes everything.

Running a private lending operation and want to streamline your investor accounting? Learn how LedgerNote helps small funds manage investor operations with the same efficiency they bring to underwriting.