Private Mortgage Misconceptions

Canada’s private lending market, also known as “non-bank lending”, for commercial mortgages is much larger than many people realize.

Canada’s private lending market, also known as “non-bank lending”, for commercial mortgages is much larger than many people realize.


Curtis Power


The lenders that make up this space include both publicly listed companies that trade on the Toronto Stock Exchange; and privately held companies. Although difficult to quantify the size of this market in Canada, the amount of capital invested in this space is many billions of dollars each year.

KV Capital has financed in excess of $750 million in commercial real estate projects since it commenced lending operations in 2009; and currently funds in excess of $100 million annually.


Commercial clients, real estate investors, and developers can enjoy various advantages when working with a private lender including:

1. Maximized return on equity / IRR
2. The ability to start construction and development projects sooner
3. Speed and agility in closing commercial real estate acquisitions
4. An alternative to refinance a bank loan
5. Fast, professional service from a seasoned lender
6. Customized loan solutions


A private lender can offer more flexibility than a traditional lender, as they primarily lend out their own capital; rather than lending capital sourced from GIC’s, and bank deposits.

As a result, private lenders are able to offer loans customized for the borrower, and the property being financed. At KV Capital, we’re always working to make our product offerings, and services better. As part of that commitment, KV Capital offers the following financing products to our private mortgage clients:

  • Real estate acquisition and inventory financing
  • Commercial real estate financing (including retail, office, industrial and hotels)
  • Residential and commercial construction and development financing
  • Land acquisition financing

We understand that there is an array of misconceptions about private lending. To identify and better understand the misconceptions about private lending, we invited Curtis Power, President of Private Mortgages at KV Capital to help us debunk four common misconceptions about private mortgages.

4 common misconceptions about private mortgages:

MISCONCEPTION #1: “Private lenders are really just loan sharks”

The definition of a loan shark: a person who charges extremely high rates of interest, typically under illegal conditions - is one of the greatest and most common misconceptions about private lending.

The private lending industry is regulated provincially across Canada through both the provincial securities regulators; as well as through the provincial mortgage broker regulatory bodies. Reputable private lenders are well-established entities, and are almost always dually registered as mortgage brokerages and also registered with one or more securities regulators.

MISCONCEPTION #2: "Only people with bad credit go to a private lender.”

This misconception most likely stems from the fact that private mortgages are an option for those with either no credit history or with bruised credit. A private lender looks at all of the financing metrics and focuses primarily on the equity invested by the borrower.

Private lenders place much less emphasis on credit and financial history. As well, many borrowers who seek private loans are experienced real estate investors with excellent credit who are looking for short term loans for new investment opportunities or looking for financing solutions that get their projects started faster to increase their IRR. Private lenders often finance real estate for limited partnerships, corporations, and joint ventures where there are many individuals that make up the borrowing group.

MISCONCEPTION #3: “Private lenders charge high, unreasonable interest rates and don’t renew.”

While private lenders do have a higher borrowing rate than traditional lenders, they are not unreasonable.

Depending on where you source your private mortgage from, the risk of the loan you are looking to obtain, as well as what your financial situation looks like, private lending rates can range anywhere from 6% - 15%.

In many cases, the flexibility offered by a private lender - including funding on short timelines - makes it attractive for real estate investors because it is almost always cheaper and more flexible than equity. Like any mortgage, most private lenders will provide an option to renew based upon the terms specified in the financing commitment.

MISCONCEPTION #4: “Private lenders are tough to deal with.”

We cannot speak for all private lenders, but we can speak to the KV Capital experience. At KV Capital, we have a unique team of experts who look forward to helping our clients find the right financing solution. We’re here to tailor our client’s deals to their specific circumstances and believe in building trust and peace-of-mind, while adding value to our clients’ experience.

How do we achieve this? By taking the time to understand your financing needs, and outlining the terms we can offer as clearly as possible. We keep it simple for all our clients so they can focus their time on what they do best, whether it’s building or developing real estate; or growing and running their business.

At KV Capital we’re here to make the lending process as easy as possible by taking a simple approach, and assisting our clients through every step of the process. Please don’t hesitate to reach out to Mitchell Patrick, Kelly Bagley, or myself if you have any commercial real estate financing needs that require a customized loan solution, and/or quick turnaround times.

This blog post is written by Curtis Power, President, Private Mortgages at KV Capital.

Curtis has spent a total of 20 years in the financial services industry, and has experience in reinsurance, energy and private lending. His progressive development in the industry has led to a variety of notable accomplishments such as: participation and leadership in the growth of KV Capital from approximately $35M in assets under management (2013) to $150M in assets under management (2021). Curtis places a great importance on going the extra mile to understand KV Capital’s borrowers real estate projects and financing needs, following through on commitments, and providing high quality service in everything he does.

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