Commercial Hard Money Lenders

If you are in business and have experience with commercial lending, you may have heard of commercial hard money lenders, but what exactly are they and what do they do? Commercial hard money lenders can offer fast access to the capital needs of your business provided by local or private investors. They can be exactly what your business may need to be able to get off the ground and achieve the financing that your business needs. Hard money lenders tend to go for higher risk companies because they are higher at risk and may have a hard time achieving credit and other commercial lending from banking or lending institutions. Commercial hard money lenders often charge a higher interest rate than other lenders do because of the higher risk of their clients.

Commercial hard money lenders can also provide business owners with short term loans, which are commonly referred to as bridge loans. The interest rates and terms of these loans are often very high for commercial loans and can often range from 11 percent up to 16 percent for real estate loans. Some of the criteria that are often used when being approved by commercial hard money lenders include:

· Between $500,000 and $20,000,000 per each transaction on the same kind of project that is being financed

· Up to 75 percent of the loan to value on improvement structures and up to 55 percent of the loan to value ratio of raw land purchases

· Commercial property purchases, construction purchases or refinancing of existing loans and debts

· Bank workouts, foreclosures and bankruptcies are also common to get funded by commercial hard money lenders

· Loans on commercial structures and buildings, lots and vacant land

Commercial hard money lenders are basically driven by securing your loan with property and they often can offer you a faster turnaround then other commercial lenders. They also can use different kinds of transactions that are known as “creative” transactions and can include interest only payments of the loan, particle deed releases and other participations can be considered when funding you the loan.

How do you know if commercial hard money lenders are right for your business? It can depend on many factors of your business and some business owners turn to hard money lenders if they have less than perfect credit and have a harder time securing a loan from other financial institutions. Sometimes, financial institutions can have strict guidelines because they want to make sure that business owners are going to be able to hold up their end of the deal and be able to afford the loan. Commercial hard money lenders tend to take on higher risk companies and business owners, but they often do it by charging much higher interest rates. They need to do this to be able to protect their assets and loans due to the higher risk of the clients, and if the loan should default they need to make sure that their money will be protected.

If you are looking to find a commercial hard money lender in your area, you should do your research and make sure that you fully understand the terms and conditions of the loan before you accept it and make sure that you can afford the payments with the higher than usual interest rates that are often charged. You usually need to have property to use as collateral when you are dealing with these kinds of loans also. You should always make sure that you are working with a reputable lending institution before you agree to the terms of any loan for your business.