Why Getting Small Loans Is Harder Than Large Loans

In the world of private money lending, there are several factors to think about. Something that is surprising to many who are new to borrowing money is that smaller loans are often more challenging to acquire than bigger ones. While this may not make sense at first, there are a few reasons this is the case.

In most cases, small loans are classified as any amount that is under $50K. For example, there are some bridge lenders who will not make a loan for under $100K.

What you may be wondering is – why are small loans so much more difficult to acquire? Keep reading to find out some of the factors that make these more expensive.


It takes lenders just as much effort to provide someone with a small loan as it does for them to provide them with a larger loan. Because of how lenders and mortgage brokers are compensated (for example, as a percentage of the total loan about), the bigger the loan size is, the bigger the compensation will be. Therefore, some lenders and brokers do not even offer clients or potential clients a smaller-sized loan. As a result, this limits the total number of small loans that are available or offered on the market.


Another reason that smaller loans are more difficult to get approved for than larger loans is that the smaller the loan is, the more likely it will be used for consumer purposes. This includes things like paying off credit cards or large medical bills.

With the latest consumer financial protection laws that are in place, some lenders have abandoned the consumer-lending scene. As a result, they no longer offer small-sized consumer loans.

While this is true, something has come in and helped fill this newly created gap. This is peer-to-peer lending. Recently, several platforms have appeared and offered consumers a new type of consumer loan. While the P2P space is still relatively new, it provides the resources and information to ensure a person can get the lending solutions they want and need.


When it comes to any type of loan, for any purpose, finding the right lender is essential for a positive experience. Regardless of if you need a hard money loan, bridge loan, or loan for consumer purposes, finding a lender that can handle this need is imperative. Take some time to research the options and get to know more about the available company.

With a quality lender, getting the funding needed and feeling confident that the terms will be agreeable is possible. Keep in mind that finding a quality lender is one step in the process. You also have to consider who will provide the loan amount that you are looking for, especially if it is considered a smaller amount (under $50K as mentioned above). Being informed can help ensure you get the results needed.