As opposed to banks and other financial institutions, private lenders can offer greater leverage on real estate deals, non-recourse financing and a quicker loan process. The tactical advantages combine with strategic thinking outside the box, resulting in more deal flexibility and thus more possibility for borrowers.

"That real estate-centric approach means we're primarily focused on the project, with the tactical result being that we can rely less on a Sponsors financial statement than banks and/or other institutions may require," Braun added.

For example private lenders, such as HSF, have the ability to close loans on projects that are already under construction and for whatever reason do not have their financing secured. With less regulatory restrictions and thus more flexibility, plus expert eyes on the project and real estate conditions at hand, such financiers can find that deal, a diamond in the rough.

Private lenders are not only much better equipped to meet borrower capital needs with flexible financing solutions, they also can work more creatively in the capital stack, according to Braun. HSF recently closed a deal where it provided "a meaningful amount of land value over its cost basis," again proving that it is more about the project itself and that deep pockets aren't the only factor.

Loan workarounds were an important option for borrowers during the pandemic and will be again during the next economic downturn. With their greater flexibilities, noninstitutional lenders have far more latitude in providing alternatives to borrower during times of adversity. That can include lowering pay rates, extending completion dates on construction loans and extending maturities. Depending on the situation, HSF has also been able to increase loan amounts in working with some of its clients.

"Banks have compliance and regulatory issues to deal with on a day-to-day basis that limit what they can do in situations requiring some adjustment, such as how each loan impacts its reserve and capital requirements as well as risk rating settings," Braun said. "On the other hand, private lenders have the ability to look at a project from a longer-term perspective and reach into a bigger tool bag of sorts in working with the borrower on various issues. There's greater flexibility to get deals done."