A guide to alternative lending and how to find the right mortgage solution on your path to property ownership.
Finding the right mortgage can feel like navigating a complex maze. The path to property ownership is rarely straightforward—especially if your financial profile doesn’t fit the ideal candidate banks prefer. For many Canadians, traditional mortgage options can present confusing twists and dead ends, making it difficult to move forward with confidence.
Alternative lending can provide new pathways; by looking beyond standard formulas and embracing more flexible criteria, alternative lenders consider the bigger picture of your financial situation, helping you overcome obstacles that might block your way with conventional banks.
In this guide, you’ll discover what alternative lending is, how it differs from traditional financing, and why it may offer solutions for buyers and investors facing barriers. You’ll also learn how lenders like PHL approach the process, what to expect with alternative applications, and how to find your ideal path through the complexities of today’s mortgage landscape.
What is Alternative Lending?
At its core, alternative lending refers to mortgage financing offered by lenders outside of major banks and credit unions. This form of lending represents a shift from the standardized practices of traditional financial institutions. Instead of relying solely on rigid criteria like credit scores and predictable income streams, alternative lenders adopt a more flexible and holistic approach to evaluating loan applications. This means considering a wider range of factors and understanding the unique circumstances of each borrower.
Think of it as a spectrum of lending options. On one end, you have the path of traditional “A” lenders, which are major banks, credit unions, and trust companies, and on the other end of the spectrum, there is a diverse landscape of alternative lenders catering to various needs and situations that might not fit the conventional mold.
PHL operates as an alternative lender within this landscape, providing solutions for clients who need an approach tailored to their specific circumstances. We look at the strength of your assets, your future potential, and the overall context of your financial situation – a commitment to finding a way forward when traditional avenues might be closed.
Key Differences: Alternative Lending vs. Conventional Mortgages
| Conventional Mortgages | Alternative Lending | |
| Qualification Criteria | Strict, standardized | Flexible, case-by-case |
| Credit Score | High (prime borrowers) | Accepts varying credit histories, including lower scores |
| Income Verification | Traditional (T4/job letter, tax returns, stability) | Flexible—accepts self-employment, fluctuating, or undocumented income |
| Interest Rates | Lower | Higher |
| Product Types | Standardized terms and types, fixed/variable | Tailored products, short term, open/closed, multiple uses |
| Property Types Financed | Typical residential, mainstream commercial | Includes unique, mixed-use, or non-standard properties |
| Approval Speed | Longer (weeks, bureaucracy) | Rapid (days, streamlined process) |
| Down Payment Required | As low as 5% (insured), 20% for conventional | Often 25-35% or more, higher equity required |
| Who It’s For | Borrowers with strong credit, steady income, standard properties | Borrowers with unconventional profiles or unique financial circumstances |
What is PHL?
PHL is a Canadian financial services umbrella organization dedicated to providing innovative, client-focused mortgage solutions within the alternative lending landscape.
Under the PHL umbrella:
- PHL Capital Corp. operates as a private lender, extending flexible, tailored mortgage products to borrowers whose needs fall outside the conventional lending framework.
- PHL Financial Group Ltd. functions as a registered Exempt Market Dealer (EMD), authorized to distribute certain investment securities and connect accredited investors with unique mortgage-backed opportunities.
PHL also manages two Mortgage Investment Corporations (MICs)—MortEq Lending Corp and Oakhill Lending Corp. These MICs pool capital from investors to build diversified portfolios of Canadian mortgages, offering both security and access to non-traditional real estate investments.
PHL’s dual structure—combining private lending with capital markets expertise—enables a unique and compliant approach:
- Borrowers benefit from custom and adaptive financing solutions outside standard bank parameters.
- Investors access well-curated, mortgage-based investment opportunities, facilitated by regulatory oversight and professional management.
- Through PHL Financial Group, MIC shares and other eligible investments are distributed efficiently and in compliance with Canadian securities regulations.
At the heart of PHL’s approach is a deep commitment to partnership, transparency, and trust. By understanding each client’s specific challenges and goals, the PHL team delivers personalized service and empowers both mortgage brokers and investors to succeed in Canada’s dynamic real estate market.
The landscape of alternative lenders is diverse and the team at PHL is deeply invested in building strong relationships with our clients. By understanding the specific challenges and opportunities they face, we strive to provide personalized services to our community.
How PHL’s Alternative Lending Works
PHL specializes in alternative lending, offering solutions for buying residential or commercial real estate when traditional banks aren’t an option. By creating solutions-oriented partnerships, PHL has a tailored approach for each individual.
Here is what you can expect when partnering with us:
- Proposal: If you are a mortgage broker with clients interested in alternative lending solutions, contact our team via phone or email. You can also submit your deal online here.
- Statements & Reports: Once we have received your deal, a member of our team will request the client’s credit bureau report for assessment to review. We do not require borrowers to meet a minimum credit score. Most residential deals do not need income statements; for commercial properties, we may request additional details based on the deal structure. We keep documentation requirements as streamlined as possible.
- Appraisals: The property will be appraised by one of our approved partners to confirm its value and suitability.
- Commitment: If your client’s assessment and appraisal meet our guidelines, PHL will move forward with a commitment letter. Knowing how quickly the real estate market moves, we guarantee commitments within 24 hours.
- Story & Exit: To complete approval, outline the purpose of the funds, your client’s repayment plan (exit strategy), and any other relevant details. This ensures we understand your client’s needs and goals.
PHL Helps With These Financing Situations
Navigating Your Mortgage Journey with Confidence
We encourage you to look beyond the traditional path and explore the possibilities that alternative lending can offer you. Don’t let the limitations of conventional lending hold you back; our team of experts are here to help you navigate your mortgage journey with confidence.
How to Connect
If you would like to submit a deal directly, you can do so here.
You can also reach out to one of our team members if you have any questions.
For BC and Alberta Inquiries:
Kevin Cheng
Sales Manager, Western Canada
604.579.0846
For Ontario Inquiries:
Julia Li
Senior Mortgage Analyst
416.649.8275
The PHL team is invested in your success to achieve your financial goals and dreams. We invite you to discover how PHL can be your trusted ally in building your legacy.
