Traditional banking institutions may not be the best option for securing a commercial property loan. These large, unwieldy institutions consistently lump potential borrowers into large generic categories with little attention to the individual needs of the client. Private hard money lenders, on the other hand, offer loans to small business owners, real estate investors and property owners that may be unfairly denied loans by banking institutions.
Hard money lenders are worth considering as they offer terms uniquely tailored to the needs of each potential borrower. The laws regarding these loans vary by state but in most cases loans can be secured within three weeks with no money down. The property of the borrower serves collateral and the amount of the loan is typically within the range of 50% to 65% of its actual value. Terms can be negotiated in these loans to ensure that the property of the borrower is not in danger.
The most common needs that are met by these private loans are in renovations made by the business owner to increase the value of the property, renovations made to modernize the business and keep it up to code or to increase the attraction to potential clients, to prevent bankruptcy and to invest in real estate. Regardless of whatever reason you have for getting the loan, hard money lenders offer reasonable rates that vary uniquely to each client. This means that a deal can be negotiated that is mutually beneficial to both the lender and the borrower. This method can be far superior to dealing with the rigid restrictions of a large, unforgiving banking institution. Small business owners could do far worse than considering a private lender to meet their needs. With a little bit of research and honest negotiation, a loan can be gained from private hard money lenders that are better than that offered by banks.