Hard money loan is a non-traditional financing source for your business.
A hard money loan is financed by a private lender, and is used for commercial real estate transactions most of the time. The money loaned is at a higher interest because companies that banks will not approve, can get approved for a hard money loan. The interest on the real estate transaction can be more than double the standard interest rate. This is because the hard money lender is taking on a serious risk.
Instead of focusing too much on the actual borrower, the lender will focus on the value of the property when making the loan. They will give a loan for a little less than what the property is actually worth. Typically it is 75% loan-to-value. This means that they will finance up to 75% what the actual value of the property is.
A hard money loan is an excellent way for commercial property acquisition, construction, and in some cases even refinancing. Loans are made on commercial building, vacant land, and many other types of properties.
Another positive of attempting to obtain a hard money loan is that the closing process on the loan is a lot faster. Sometimes a bank can take up to a month to close, and if the property your business needs is available for the right price, and you need in it faster some businesses will seek out a hard money loan.
Search our free business funding directory today and find resources for the capital your business needs.