Hard Money Loans

When your project or business needs a cash infusion quickly, when your credit won’t qualify you for a traditional loan, or when you have a time-sensitive transaction to close, these are the situations where hard money loans are most needed.

Despite the sometimes alarming sobriquet of “loan of last resort,” hard money loans do serve an important purpose. It’s an option when all other avenues are either closed to you or will take too long for your project or business’ timetable.

Most people associate hard money loans with homeowners who are trying to avoid foreclosure on their homes. That’s only one example where this type of loan comes in handy. Traditional lending institutions usually take longer—30 days or more—to process and get approved, and that is if you have good credit rating.

Of course, there is something in exchange for the faster processing and fewer requirements. Private funding backs hard money loans. Unlike traditional lending institutions such as banks, they often take on higher risk loans; this is also why they are more expensive. These loans are short term. The business of hard money lending is based on making a profit on the higher interest rates and securing such loans through the borrower’s equity in a particular asset, usually a property the borrower is trying to buy or already owns. It is asset-based instead of one founded on a borrower’s credit score or income.

Naturally, a traditional loan is the preferred way to go for most borrowers. But, again, when these aren’t likely to come through or come through in time, a hard money loan is a good option to have.

As in any business, some hard money lenders are better than others. If you are in the market for a hard money loan, the best course of action is to do your research. Establish your hard money loan needs, there are various types of hard money financing: foreclosure rescue, real estate investor financing, etc. Find one that matches your needs. You can go online and check out hard money offerings from a number of lenders just by filling out their general query forms. You can consider and compare lenders as soon as they get back to you for follow up.