Commercial hard money is often the only solution when you have an out of the ordinary project which the traditional lending institutions have turned down. Hard money lenders catering to the commercial market are extremely flexible and consider your request for loan without too many questions asked. This is a unique feature that most borrowers appreciate. The hassle-free mode of acquiring hard money enjoys a few other features too, such as your income or your previous credit score will not be taken into account. Commercial hard money is a quick bridge between your dream and its realization. When the precious time is at stake, hard money turns out to be the only ray of hope for millions embarking on a new venture. It is a sub class of hard money to be used strictly for commercial or business purposes.
It is a non-bankable loan because the borrower does not meet the bank’s stipulated standards but owns assets in the form of real estate which is enough to collateralize the loan that is being sought. Real estate that the investor/lender graciously accepts as collateral could be any type of property including raw land. Secured by commercial property, the borrower can raise hard money in very large amounts and within the shortest span of time. Doing away with the overwhelming formalities, acquisition of commercial hard money is usually closed within a few days or if urgency calls, within 24 hours. Since these types of funds are doled out without the usual official procedures, they carry a heavy price tag in the form of a high rate of interest (10%-15%).
The total sum of hard money that may be easily had for commercial purposes could range anywhere between $250,000 and $10million or sometimes exceeding even this limit. Up to 60% of the loan to value ratio is given without a fuss. Foreclosure is seldom resorted to and there are no prepayment penalties. The lenders take a higher risk and thus shield themselves against defaulters. In this case it is not an uncommon practice to face evasion or non-payment by the lenders. So, the high interest percentage acts as a sweetener for him. While shopping for commercial hard money make sure to ask about the exit fees that some lenders levy on the borrowers when they have repaid the loan.