Momentum is a difficult concept to quantify in business, even if it’s easy to understand on an instinctual level. The basic premise is easy enough; if you have a good thing happening, there’s potential for that good thing to set off a chain reaction of other good things, you want to ensure this actually happens. But starting that momentum and then keeping it going can be difficult to maintain when large amounts of investment are required.

Construction after buying land, or acquiring some real estate with good long term returns while spotting another property opportunity after your resources are spent are both good examples of this. But that doesn’t mean that you have to just let these opportunities slip by. Even if the banks are less aggressive about what are profitable but perhaps risky ventures, a hard money loan for purchase or cash out might be just what you need.

Potential Matters More

A hard money loan differs from a traditional bank loan in two major respects. The time to approval is much faster, allowing you act faster, and the interest rates and points on a loan are higher. Part of the reason for this is the understanding that hard money loans go towards commercial ventures, which is one reason why the services at will only issue loans to companies and not private individuals, nor will loans be issued on a residential structure that is actually being used for the owner’s own living purposes, rather than as a business project.

A hard money loan has riskier terms because there is the understanding that this is a riskier loan. Hard money loans come in where banks will not, and that’s because banks fear the risk. A hard money loan looks to the profit potential of a project, rather than the total assets of a person who is asking for a loan, so it’s important have different conditions. But once you are approved, you can then go on to complete your project and keep the momentum that you’ve started in motion.