Hard Money Loans
Hard money loans enable businesses to get cash faster to satisfy urgent financial requirements.
When limited-time opportunities present themselves, there isn’t always time to go through a traditional bank’s lengthy application process.
A hard money loan is backed by tangible collateral. The collateral can take the form of real estate property, heavy equipment, inventory, and other valuable assets. These loans work well for businesses that don’t have an established credit history, as the value of the asset is the basis for the loan, not the credit of the borrower. Hard money loans have the benefit of fast approvals and are often interest only during the loan term, and payment is completed by a final balloon payment. However, they typically carry a low loan-to-value ratio and higher interest rates.
Commercial Real Estate Hard Money Loans
For businesses that are expanding quickly, commercial real estate hard money loans give them the ability to acquire new real estate without a long wait. The value of the loan is based on the assessment value of the real estate property being purchased. It doesn’t have to be newly constructed property, only newly acquired. The lender assesses the value of the property and offers a percentage of that value directly to the borrower. The property then becomes the collateral that secures the loan. Relocation due to rapid expansion, damage to existing property, or simply a change in venue can all be funded quickly with a commercial real estate hard money loan.
Equipment Hard Money Loans
When it’s time to repair or replace essential equipment, the value of that equipment can be leveraged to bring in extra cash. Equipment such as vehicles, heavy manufacturing machinery, farming tools, and bottling apparatuses are all potentially capital-generating assets. Businesses need to keep moving and can’t often afford to pause production for the time it takes to sell old equipment to finance the new. With a hard money equipment loan, new equipment can be secured and brought in right away. Then, the business can sell the old equipment when the time is right. If the loan isn’t satisfied, the equipment can be collected by the lender to cover the debt.
Fix and Flip Hard Money Loans
Flipping property is a fast-paced and popular way to generate income for businesses and private individuals alike. However, a return on the property investment isn’t realized until the “fix,” often a series of repairs and upgrades to the property, has happened and the property has been successfully sold. A fix and flip hard money loan is a loan that moves with the fast pace of the real estate market. These loans are based on the value of the property, either the proposed acquisition or other properties in an existing portfolio. They allow buyers to take advantage of real estate deals that won’t wait. Once the repaired property is sold, the loan can be repaid.
Hard Money Refinance
Refinancing property is essentially obtaining a new loan to cover an old one. Lenders often lower their interest rates and increase incentives in response to market demands. A business can take advantage of this circumstance to get a new loan with better terms. The funds from the new loan pay off the original loan. This type of loan can be a great solution to a rapidly-approaching balloon payment or to get fast cash out of the property. Then, the loan is repaid under the new terms with the property acting as collateral. These loans can even help improve a business’s credit because the old loan will show as repaid in full.
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With lenders ready to work with you and with loan amounts from $5,000 to $5 million +, there's no reason not to start a conversation or to pre-apply to see for what loans you could qualify. We work with businesses in every industry and at every stage in the life of your business.
