Through some fine investigative work by the Globe and Mail, I was made aware that there are another type of private lenders operating in BC. Click here for Globe and Mail’s story. Unfortunately, these are nefarious characters and will cast a shadow on the rest of the legitimate operators. So, I would like to clarify the differences between these operations.
The operations highlighted by the Globe and Mail are “private lenders” who lend out their money to launder dirty money. They charge interest rates from 40% to 120%. 60% is the legal maximum allowed by the Tax Act. Legitimate private lenders charge interest rates that are much lower. Usually between 5% to 14%.
These questionable operators mainly target non-residences with limited access to money outside of their home country.
The key difference is these money launderers will want to give you the money in cash because they cannot deposit it into an account without triggering some sort of regulatory alarm. Their non-residence clients will actually use the money here in Canada and may not need to deposit huge amount of money into accounts here. This is why it is unlikely that someone living here would be able to borrow money from such lenders because once someone tries to deposit $10,000 cash into an account, red flags are raised at the bank. And they don’t want that.
So, these operators are out there, but your chance of helping these people launder money are small. And if you refuse to take cash, almost none.
Alternative lending.ca help people by providing options beyond regular bank lending. We operate out of Vancouver, BC, but can assist people in all of BC and selected locations in Alberta, Manitoba, Saskatchewan and Ontario.
