Businesses and individuals often have financial needs that cannot be met from a traditional bank or lending source. In these cases, hard money loans—or money that is made available through private sources—may be the appropriate answer to their needs.
For example, borrowers who need money quickly may opt for a hard money loan because they can generally get their loan within a day or two. The approval process from a traditional source, on the other hand, can last six weeks or longer. Traditional sources will require documentation, credit reports and appraisals – we do not. Hard money loans may also be a good option for individuals or businesses interested in either renovating or improving a piece of property or in purchasing a commercial property that does not yet have tenants or cash-flow. Money is often not available through traditional sources for these types of projects.
Hard money loans are typically based on the value of the real estate that is used as collateral to secure the loan. Further, because of the risk involved with making a hard money loan, borrowers can expect the interest rate to be higher than what one would typically see in a traditional loan. However, hard money loans can offer resources and flexibility to borrowers who have immediate financial needs.