No matter what type of commercial loan you are seeking, there will always be some qualifications. However,commercial hard money loans are dramatically different from traditional commercial loans. One of the most obvious differences is the qualifications for obtaining hard money loans; those with weak or non-existent credit can still obtain the funding they need to start or upgrade a business venture.
Qualifications for Hard Money Loans Are Minimal
When you’re looking to start or upgrade a commercial property or business venture, it can be difficult to find the funding necessary through traditional lenders. Unless you own a well-established and highly profitable business, it will be a difficult if not impossible task. This does not mean you should give up your dream of owning your own business or expanding one you already own; commercial hard money lenders are right there to help you with the funding you need when you are unable or unwilling to obtain traditional financing sufficient to meet your needs.
Unlike traditional commercial lenders commercial hard money lenders have no interest in your credit history or how much money you make. The only qualification necessary to obtain a hard money loan is to provide sufficient equity in real estate to secure the loan. Another advantage of a hard money loan is you can use more than one property to secure the same loan in the event the equity in one is insufficient to cover the entire proceeds of the loan.
Advantages of Commercial Hard Money Loans
If you are like most people you were taught that the best commercial property lenders are banks, credit unions and other traditional lenders. The idea of acquiring a loan through a private investor or group of investors never occurred to you. As things change more in the world of lending, so do the types of lenders that are able to service commercial borrowers. There are many advantages to choosing hard money lenders over traditional lenders including but not limited to the following:
There is less paperwork involved when using commercial hard money lenders.
Hard money lenders are not interested in the borrower’s credit history or income.
The turnaround time for completion of the loan is substantial reduced.
Hard money lenders will provide funding based on the future value of a depressed property (value after repairs and renovations are complete).
You can use more than one property to secure a hard money loan.
Determining if a Commercial Hard Money Loan is Right for You
Before you make a decision about the type of investment property loan you need for your purposes, look at the advantages you gain when you obtain funding from a commercial hard money lender . Time is one of the most important reasons to choose a hard money lender—ten to fourteen days compared to thirty or more with traditional lenders. Since hard money loans are short-term loans, you can convert your loan into a traditional loan at a later date if that will suit your needs better.