Cross - Collateral

Commercial Hard Money Lending

How it Works

If you’ve ever tried to go through a bank in order to get the funding for commercial project, you know it can take time and a huge amount of paperwork. In areas that are thriving and businesses are growing, a cash-only buyer could snap up that property without a second thought, leaving you in the dust.

Is there anything you can do to compete with that? There is, and one such way is through commercial hard money lending. Let’s take a closer look at how it works: What is a Commercial Hard Money Loan and How Does it Work?

Unlike traditional loans from banks or credit unions, hard money loans leverage collateral that you put up (for example, another real estate property) and uses that to help you secure the funding you need - fast and easy.

Qualifications are generally easier to meet too.

Because you’re using other collateral against your hard money loan, you can get approved much quicker than with a traditional loan. In addition, there’s little paperwork to do and no income requirements. Ideally, you’ll want to have a score of 600 or better in order to get the best hard money loan rates

What Kinds of Properties Can You Buy with Commercial Hard Money Loans Using Cross - Collaterization?

Any type of commercial property can qualify for a hard money loan, including:

  • Apartments
  • Condominiums
  • Planned communities
  • Business offices
  • Medical and executive suites
  • Retail stores (Strip malls and inline stores
  • Manufacturing and distribution centers
  • Warehouses
  • Hotels and motels
  • Restaurants and much more

You’ll be glad to know that our commercial hard money lenders have decades of experience working with a wide range of commercial properties for sale and buyers from all types of backgrounds. Even if the type of commercial property you’re looking at isn’t shown here, don’t worry, you may still qualify!

Do Bankruptcy and Foreclosure Affect The Ability to Get a Commercial Hard Money Loan?

You may be surprised to know that commercial hard money lenders do not place as much emphasis on your financial history or credit score, and care more about the value of the assets you are borrowing against. You could even have a bankruptcy or foreclosure and this would be enough for banks to outright deny your loan application, but private money lenders work differently, and look instead at the value of the collateral.

So How Long Does it Take to Get the Funding You Need?

This is one of the best reasons to consider a commercial hard money loan. With a hard money loan, you don’t have to wait until you have the bank’s “approval” to know whether or not your loan application is approved. In competitive real estate markets, buyers with cold, hard cash can buy up properties as soon as they become available.

With a hard money loan, you’ll know if you’re approved quickly, and you won’t have to deal with some middle-man skimming off the top of your loan payment. You’ll get an LTV (Loan to Value) rate of up to 70% and fair interest rates. Pre-payment penalties are not as brutal as with institutional investors as well.

Another significant benefit is how short the timeframe of commercial hard money loans can be. Instead of the 10, 20 or 30 years of traditional bank loans, a private money loan can last as little as a year or two! With so many reasons to consider a commercial hard money loan, now is the time to learn more about this fantastic lending alternative. Call our hard money lending experts today!


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