Hard Money Commercial Loans

When it comes to hard money commercial loans, you may have heard of them but do not fully understand what they are, how they work and the different kinds that may be available to you. There are different types of hard money commercial loans and the purposes and terms are all different depending on the type that you choose to help with your business needs. The main types of hard money commercial loans are listed below:
• Hard money acquisition loans
• Mezzanine financing loans
• Hard money acquisition and development loans
• Asset based hard money loans
• Hard money bridge loans
• Hard money construction loans
• Hard money credit enhancement loans
• Hard money raw land loans
• Stand by commitment loans

Each of the types of hard money commercial loans does follow certain lending rules and terms, and qualifications need to be met in order to receive funding from the loan. Hard money acquisition loans are loans that are used to acquire real estate after receiving the loan proceeds. Mezzanine loans are loans that are subordinate to primary lenders. These types of loans are a sort of debt instrument that is paid back at the time of the sale of the refinancing of total capital. The lenders may opt to take an equity ownership, in addition to the other debt that is going to be paid out from the proceeds of the sale. Mezzanine loans do have a flexible structure that includes debt and equity mixes that can help a business boost their potential.

Hard money acquisition and development loans are hard money commercial loans that are used to acquire the real estate property and to develop the property. The loan proceeds are given out with only interest paid on the funds. The hard money loan to value ratio is calculated based on the overall improvement value of the property after all improvements have been made on it. An asset hard money commercial loan is used for any business purpose that uses collateral as the security of the loan. Hard money bridge loans are loans that are used for a short time period for the business, until the permanent loan or financing is then put into place. Bridge loans are great money solutions for businesses who need the loan quickly and can offer solutions to timely acquisitions or other business opportunities because they allow the business to act quickly with an acquisition if necessary. Some of the business purposes that hard money bridge loans can be used for include:
• Acquisitions
• Buy outs
• Foreclosures
• Cash outs
• Construction
• Commercial property
• Apartment buildings
• Hotels and motels
• Office buildings and other complexes
• Golf courses and most other commercial businesses

Hard money construction loans are used for the construction of a building or other improvements that are going to be made to the property, using the land and improvements as part of the collateral used to secure the loan. Hard money raw land loans are used to provide the loan to purchase unimproved property including lots and acreage. Standby commitment loans are used for businesses until other institutional financing comes in or the purchase takes place. Your lender can help explain the terms and conditions of these commercial loans and if they are right for your business. Be sure to work with your lender to understand the different terms that go along with these loans to make sure it will be a good decision for you and your business.