Admittedly, the phrase “Hard Money Loan” can sound humorous at first. But once you know what they are, you may find them useful to know about, especially if you are interested in the real estate marketplace.
Hard Money Loans: A Primer
Purchasing properties as an investment or for a business enterprise can be quite expensive, especially if you are considering commercial properties. Because of the high cost, a specific kind of asset-based financing known as a hard money loan is frequently used to finance commercial projects.
Most of the time, these are short-term loans that are secured by the value of the property being financed rather than the borrower’s credit history. Instead of being provided by a conventional bank, they are provided by a finance agent or private lender.
Hard money loans come with a certain amount of risk for the lender. Consequently, a hard money loan typically has a higher interest rate than other types of loans due to the higher risk of default.
Situations in Which Hard Money Loans Can Come In Handy
Hard money loans can be quite useful in a number of different scenarios. Here are a few:
- Financing a fix-and-flip operation
- When a person has credit issues preventing other types of real estate loans to be obtained
- When quick financing is required
The last point is worth considering further: A hard money loan can be obtained far more quickly than financing from a traditional bank. This can represent a significant advantage in a hot real estate market.
Hard Money Loans from Speed Funding
If you would like more information about hard money loans, then give the folks at Speed Funding a call today. They will be happy to answer all of your questions or suggest another form of financing if it is more suitable for your particular situation.