In case you haven’t noticed, interest rates have been rising. The federal reserve raised rates in sixteen consecutive sessions. The impact has already been felt in the residential real estate market. Those seeking to purchase homes now face much higher mortgage rates, and anyone trying to start a business now is looking at costs as much as 50% higher than a short time age for start up funds.

A novel service had recently surfaced that creates opportunities for making financing easier, safer and more productive. Micro lending is a process that makes transactions between relatives and friends more possible, and in fact, more profitable.

A relative approaches you for a down payment, or even a private mortgage. Perhaps this person doesn’t have the best credit rating, but you know that they are reliable and just need a “leg up”. However, you are hesitant, because of the potential for personal conflict, as well as financial loss. Micro lenders act to document the transaction, this, in itself reduces the incidences of non payment. The lender also services the loan and keeps all parties informed as to progress and provides all information needed for tax reporting.

Here are additional benefits. The costs are much than those charges by traditional lenders. The transaction moves more quickly and involves less frustration than the typical mortgage process. And now the best benefit- all of the money stays in the family, or the circle of friends. Principal and interest go to the lender, not a bank or mortgage film.

The same type of dynamic exists in the two other common transactions where micro lending is used. Start up fund for a new business. No doubt, the relatives of the founders of You Tube would have been delighted if they had provided funds through a micro lending transaction. Seller financing is another area where this type of activity is increasing.

Any loan involves risk. While micro lending makes the transaction more businesslike, easier and more profitable, it cannot eliminate the risk of non-payment. It does reduce this, but care and consideration and due diligence are still required.