The Difference Between a Bank Loan vs. Private Loans
Private Loans vs. Bank Loans: Which Financing Option Is Right for You?
When you need capital for a business or real estate investment, the first question is often: Should I get a bank loan or a private loan? While both can provide the funding you need, the approval process, flexibility, and repayment terms can look very different. Understanding the differences will help you choose the option that best fits your project.
What Is a Bank Loan?
A bank loan comes from a traditional financial institution such as a commercial bank or credit union.
Key features of bank loans include:
Lower interest rates compared to private loans.
Longer repayment terms, often several years or more.
Strict approval requirements, such as high credit scores, detailed financial statements, and collateral.
Pros of Bank Loans:
Competitive interest rates.
Predictable, long-term repayment.
Established and regulated lending structure.
Cons of Bank Loans:
Applications can take weeks or even months.
High chance of rejection if you don’t meet strict requirements.
Limited flexibility for unique or time-sensitive projects.
What Is a Private Loan?
A private loan comes from a direct lender, such as Singer Financial, rather than a bank. These loans are typically secured by real estate and focus on the value of the property rather than just the borrower’s credit score.
Key features of private loans include:
Fast approvals and closings, often in days.
Flexible underwriting, with less emphasis on credit history.
Short-term solutions, such as bridge loans, to cover immediate capital needs.
Pros of Private Loans:
Quick funding with minimal red tape.
More flexible terms and approval criteria.
Ideal for investors and businesses that need to move fast.
Cons of Private Loans:
Higher interest rates than banks.
Shorter repayment timelines.
Designed as a short-term solution, not long-term financing.
Private Loans vs. Bank Loans: A Quick Comparison
Feature Bank Loan Private Loan Approval Speed Weeks to Months Days Credit Requirements Strict Flexible Interest Rates Lower Higher Repayment Terms Long-Term Short-Term Best For Stable borrowers Fast-moving investors
Which Loan Is Right for You?
Bank loans are best if you have excellent credit, plenty of time to wait, and want the lowest possible interest rate with long-term repayment.
Private loans are best if you need fast funding, have unique financing needs, or want the flexibility that banks usually can’t provide.
Final Thoughts
Both private loans and bank loans have their place in business and real estate financing. The right choice depends on your project, credit profile, and timeline.
At Singer Financial, we specialize in fast, flexible, property-secured private loans for clients across Pennsylvania, New Jersey, and Delaware. If traditional bank lending doesn’t fit your needs, we can help you move forward without delay.
Contact us today to discuss your financing options.
Paul Z. Singer & the SEC: Civil Case Without Criminal Charges
Paul Z. Singer, the SEC, and the Controversy That Never Became Criminal
Introduction
In November 2017, the U.S. Securities and Exchange Commission (SEC) filed civil charges against Paul Z. Singer and his company Singer Financial Corp. (SFC). The agency alleged that Singer raised millions of dollars through the sale of unregistered securities. The controversy was fueled not only by the size of the offering but also by the fact that Singer was never criminally charged with operating an "illegal business." Instead, the matter remained a civil enforcement action. This blog post explores the background, the SEC’s allegations, the resolution, and why this case remains a point of debate.
Background: Singer Financial’s Lending Model
Singer Financial Corp., based in Philadelphia, operated as a "hard money" real estate lender. The firm issued high-interest loans secured by property, then raised capital from investors through investment certificates and later promissory notes.
Before 2012, SFC issued certificates under Regulation A, which allowed smaller public offerings with reduced disclosure requirements. When its last Regulation A qualification expired, Singer attempted to re-file but faced SEC scrutiny over disclosures, including the company’s ability to sustain high interest rates and its history of related-party loans. Instead of resolving these concerns, Singer pivoted to issuing promissory notes—without registering them as securities or claiming a valid exemption.
The SEC’s Allegations
Between 2012 and 2015, Singer and SFC raised about $4.5 million from at least 70 investors through promissory notes. The SEC argued:
The notes were securities under federal law.
They were sold without a registration statement in effect.
No exemption (such as a private placement) applied.
Investors received marketing materials but not the audited financial disclosures typically required in registered offerings.
Importantly, the SEC did not allege fraud, misrepresentation, or theft. Instead, the case rested on Section 5 of the Securities Act of 1933, which prohibits offering securities without registration. Section 5 is a strict liability provision, meaning intent or scienter does not need to be proven.
Settlement and Outcome
In July 2018, Singer settled with the SEC. Without admitting or denying wrongdoing, he agreed to pay about $3.8 million in disgorgement, interest, and penalties. He also accepted injunctive relief restricting future unregistered offerings (SEC Litigation Release).
No criminal charges were filed. The Department of Justice never brought an indictment, and the case remained strictly within the SEC’s civil enforcement arena.
Why the Controversy?
Civil vs. Criminal Liability
Critics often ask: if Singer was running an "illegal business," why wasn’t he criminally prosecuted? The answer lies in the nature of the alleged violations. Civil registration cases rarely escalate to criminal charges unless fraud or intentional deception is evident. Here, the SEC alleged only that the securities were unregistered—not that Singer defrauded investors.
Were the Notes Really Securities?
Another source of debate is whether the promissory notes truly qualified as securities. While courts often treat such notes as securities, especially when offered broadly to unsophisticated investors, there is some gray area. Singer might have argued they were simple loan agreements rather than investment contracts.
Regulatory Overreach or Investor Protection?
Supporters of Singer claim the SEC’s action reflects regulatory overreach, punishing technical violations without evidence of fraud. On the other hand, regulators argue that unregistered offerings put unsophisticated investors at risk—especially when millions of dollars are involved and disclosures are lacking.
Key Takeaways
Singer was never criminally charged. The SEC’s action was civil, not criminal.
The controversy stems from optics. Some observers equate “unregistered offerings” with an “illegal business,” but legally, the matter was regulatory non-compliance, not fraud.
Section 5 is powerful. Its strict liability standard allows the SEC to enforce registration rules without proving intent.
Settlement without admission. Singer paid millions but did not admit wrongdoing, leaving room for debate about fairness and culpability.
Conclusion
The Paul Z. Singer case highlights the fine line between civil securities violations and criminal fraud. While the SEC succeeded in securing millions through settlement, Singer was never criminally accused of running an illegal enterprise. For investors and industry professionals, the lesson is clear: even absent fraud, regulatory compliance with securities registration rules is non-negotiable. At the same time, the case illustrates why SEC actions can spark controversy—especially when they blur the line between protecting investors and punishing technical missteps.
Introduction
In November 2017, the U.S. Securities and Exchange Commission (SEC) filed civil charges against Paul Z. Singer and his company Singer Financial Corp. (SFC). The agency alleged that Singer raised millions of dollars through the sale of unregistered securities. The controversy was fueled not only by the size of the offering but also by the fact that Singer was never criminally charged with operating an "illegal business." Instead, the matter remained a civil enforcement action. This blog post explores the background, the SEC’s allegations, the resolution, and why this case remains a point of debate.
Background: Singer Financial’s Lending Model
Singer Financial Corp., based in Philadelphia, operated as a "hard money" real estate lender. The firm issued high-interest loans secured by property, then raised capital from investors through investment certificates and later promissory notes.
Before 2012, SFC issued certificates under Regulation A, which allowed smaller public offerings with reduced disclosure requirements. When its last Regulation A qualification expired, Singer attempted to re-file but faced SEC scrutiny over disclosures, including the company’s ability to sustain high interest rates and its history of related-party loans. Instead of resolving these concerns, Singer pivoted to issuing promissory notes—without registering them as securities or claiming a valid exemption.
The SEC’s Allegations
Between 2012 and 2015, Singer and SFC raised about $4.5 million from at least 70 investors through promissory notes. The SEC argued:
The notes were securities under federal law.
They were sold without a registration statement in effect.
No exemption (such as a private placement) applied.
Investors received marketing materials but not the audited financial disclosures typically required in registered offerings.
Importantly, the SEC did not allege fraud, misrepresentation, or theft. Instead, the case rested on Section 5 of the Securities Act of 1933, which prohibits offering securities without registration. Section 5 is a strict liability provision, meaning intent or scienter does not need to be proven.
Settlement and Outcome
In July 2018, Singer settled with the SEC. Without admitting or denying wrongdoing, he agreed to pay about $3.8 million in disgorgement, interest, and penalties. He also accepted injunctive relief restricting future unregistered offerings (SEC Litigation Release).
No criminal charges were filed. The Department of Justice never brought an indictment, and the case remained strictly within the SEC’s civil enforcement arena.
Why the Controversy?
Civil vs. Criminal Liability
Critics often ask: if Singer was running an "illegal business," why wasn’t he criminally prosecuted? The answer lies in the nature of the alleged violations. Civil registration cases rarely escalate to criminal charges unless fraud or intentional deception is evident. Here, the SEC alleged only that the securities were unregistered—not that Singer defrauded investors.
Were the Notes Really Securities?
Another source of debate is whether the promissory notes truly qualified as securities. While courts often treat such notes as securities, especially when offered broadly to unsophisticated investors, there is some gray area. Singer might have argued they were simple loan agreements rather than investment contracts.
Regulatory Overreach or Investor Protection?
Supporters of Singer claim the SEC’s action reflects regulatory overreach, punishing technical violations without evidence of fraud. On the other hand, regulators argue that unregistered offerings put unsophisticated investors at risk—especially when millions of dollars are involved and disclosures are lacking.
Key Takeaways
Singer was never criminally charged. The SEC’s action was civil, not criminal.
The controversy stems from optics. Some observers equate “unregistered offerings” with an “illegal business,” but legally, the matter was regulatory non-compliance, not fraud.
Section 5 is powerful. Its strict liability standard allows the SEC to enforce registration rules without proving intent.
Continued Returns. All the investors involved in Singer Financial continued to see returns of 7-10% until their accounts were paid out in full.
No Investor Losses. No Investors suffered losses from the SEC matter, nor in the history of Singer Financial Corp.
Settlement without admission. Singer paid millions but did not admit wrongdoing, leaving room for debate about fairness and culpability.
Conclusion
The Paul Z. Singer case highlights the fine line between civil securities violations and criminal fraud. While the SEC succeeded in securing millions through settlement, Singer was never criminally accused of running an illegal enterprise. For investors and industry professionals, the lesson is clear: even absent fraud, regulatory compliance with securities registration rules is non-negotiable. At the same time, the case illustrates why SEC actions can spark controversy—especially when they blur the line between protecting investors and punishing technical missteps.