Learn First Hand if Hard Money Commercial Loans are Right For You

Most people get scared when they hear the term Hard Money Commercial Loans. 15 years ago, they were not as common and very hard to get, but in the modern age, they are much more common. However before you get a loan like this, there are certain dynamics you must be made aware of before you go on the net and offline searching for your angel investor or lender.

Why Would Someone Want Hard Money Commercial Loans?

The main reasons are that these types of money financing solutions are so distinguished is the pliability. I’ve heard of companies presenting this type of business loan totally unsecured, with nothing down collateral. But these loans are under 500k. Business Cash Loans of 500k to One Billion are most often backed by Real Estate.

People tend to use these Hard Money Commercial Loans as Procurement or “Bridge Loans”. They want to connect the missing link meaning they will tend to use this commercial finance loan while they wait for their traditional financing kicks in. The issue with these loans is that they start at rates of 11-16%. This is approximately 5 points more than a conventional loan.

What Types of Hard Money Loans are out there?

You can acquire a loan like this for commercial property. This can be anything from a Strip Mall to a Grocery Store to a small office suite. You can also use them for a residential project such as a tract home development. I’ve heard of loans $100,000,000 and more just for one loan of this type. The Industrial Hard Money Commercial Loan is also very popular.

Hard Money Commercial Loans cover things like warehouses and the newer technology parks. You will find technology parks, which are nothing more than an aggregation of warehouses and factories concentrated into a specific area. They are very common in urban and suburban areas, such as mid sized cities. For example a city like Anaheim or Oceanside CA. are suburban areas.

Hard Money Commercial Loans also go by particular factors such as a Favorable Credit Score, Preferable Business Returns and other determinants. This obviously affects rates as well. The more your score, the more your LTV. LTV stands for Loan to Value Ratio which is the differential of the value of the property the bank is content to loan on. When applying for a outrageous loan of this type your Credit Score and tangible history isn’t weighted as much as how long you’ve been in business. Is your enterprise is effective, massively effective or failing?

The reason the rates on Hard Money Commercial Loans are so herculean is because they have to entertain the possibility of the borrower going into default. These financial loans don’t shield the Investor or the Banks from the large failure rates on behalf of the borrower.

But it’s important to note that these types of loans are closed everyday. Business moves on and the world moves on accordingly. When trying to find a lender that will help you acquire money financing of this type, make certain you at a minimum setup an meeting. This doesn’t have to be an in person interview, since many lenders are nationwide now. A telephone interview should be adequate in most cases.

What you need to do is honestly work out the numbers. If they work in your favor, regardless of the high interest rate of the loan, you have something good you can run with. That’s what you have to take into consideration before you make your move. Also conduct an on the phone interview with the lender to make sure you are getting the best rates.

Whether you’re looking for Hard Money Loans or Business Cash there is definitely a viable solution for you.

Let Brian Garvin & Jeff West teach you More about Commercial Real Estate Loans and find out more about Hard Money Commercial Loans today. You can always call us for Free Real Estate Advice as we have a lot of resources to help you find what you need, with no obligation.

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