Private vs. Bank Loan for HOAs
Private Loans vs. Bank Loans for HOAs & COAs: Why a Private Loan May Be Your Best Move
For many Florida condominium associations (COAs) and homeowners associations (HOAs), securing financing for major projects is no longer optional—it’s essential. Whether it’s complying with the new requirements for Milestone Inspections and Structural Integrity Reserve Studies (SIRS), repairing structural issues, or replenishing reserves, communities often face a choice: apply for a traditional bank loan or work with a private lender.
While banks have long been the standard option, private loans offer unique advantages—especially when time, flexibility, and customization matter. Here’s why more associations are choosing private financing.
1. Private Loans Are Fast
In community association management, delays cost money—and sometimes risk lives. Urgent repairs, insurance compliance deadlines, and state-mandated inspections often leave boards with little time to act.
Private lenders can approve and fund loans in days, sometimes within 24–72 hours.
Banks can take several months to process an application, requiring multiple committee reviews, extensive paperwork, and rigid underwriting. Even after waiting months, it’s not uncommon for a bank to deny the loan at the end of the process.
With private financing, your community gets the capital when it’s needed—not when the bank’s calendar allows.
2. Easier Approval Criteria
Traditional banks use strict lending benchmarks that many HOAs and COAs can’t meet:
Low delinquency rates (often under 10%)
High reserve balances
Low percentage of rentals/investor-owned units
Strong operating budgets and clean audit history
Comprehensive, costly insurance coverage meeting bank specifications
Communities with high delinquencies, low reserves, or a high proportion of investor-owned units often get disqualified right away.
Private lenders, by contrast:
Evaluate the overall strength and potential of the community, not just numbers on paper
Are willing to work with higher delinquencies and more rentals
Offer flexibility on reserves and insurance requirements
Understand the realities of aging buildings, insurance market challenges, and special assessments
3. A Personal Relationship with Your Lender
When you borrow from a bank, you’re one file in a stack—loan servicing may be outsourced, and decision-makers are often far removed from your community’s reality.
Private lenders work directly with boards, managers, and sometimes residents:
Direct access to real decision-makers
Faster answers to questions
Guidance from someone who understands HOA and COA challenges firsthand
This relationship-based approach makes the lender a partner in solving problems, not just a funding source.
4. Tailor-Made Loan Structures
Banks typically offer “menu” loan products—predetermined terms, fixed repayment schedules, and little room for customization. This can be a poor fit for associations with unique project phases, cash flow cycles, or special assessment timing.
Private lenders can design a loan around your community’s specific needs:
Flexible repayment schedules (interest-only periods, deferred payments, seasonal payment adjustments)
Terms that match project milestones
Funding in multiple phases instead of all upfront
This means your association gets a loan built for your situation, not squeezed into a rigid template.
5. Bridge to a Longer-Term Bank Loan
A private loan doesn’t have to be your permanent financing. Many communities use it as a strategic bridge:
Get immediate funding to start repairs, inspections, or reserve contributions
Stabilize the association’s finances, improve reserve levels, and address delinquencies
Meet the bank’s strict criteria over time
Some private lenders—like Samtov Finance—can even structure repayment terms that allow you to refinance into a longer-term traditional bank loan when the time is right, potentially lowering your interest rate while locking in long-term stability.
The Bottom Line
Traditional HOA and COA bank loans have their place—but when your community faces urgent needs, strict bank rules, or a situation that doesn’t fit the “perfect borrower” mold, private loans offer speed, flexibility, and customization that can make all the difference.
From urgent Milestone Inspections to major repairs and reserve replenishment, private loans give you the capital you need now—without months of uncertainty—and position your community for long-term financial health.
Samtov Finance LLC specializes in fast, flexible loans for Florida HOAs and COAs, including communities banks won’t finance. We’ll build a loan that works for your needs today, with options to transition to long-term bank financing tomorrow. See our HOA loan page here.