Commercial real estate loans often enter a gray zone between traditional bank funding and the higher rates of private money. This is the right time to go for hard money. Although hard money rates are considerably more than bank rates, (usually between 11% and 16%), they are a substantially less expensive and demanding option than private money or investor-funding, which can cost from 15-20% or more with fees. Hard money are primarily used as bridge loans, designed to be short term. Usually these loans only last from 6-24 months to help you ‘bridge’ the gap between the time the money is needed and a time when traditional, less expensive bank financing can be obtained or properties are sold or constructed.  

The reasons you might need hard money are many, but common factors often include time, credit history or the type of project. In a time-critical situation, the 1-3 months of bank diligence required to fund may cost you the entire project. Hard money funding can deliver in 2 weeks if necessary, making it a very attractive option for those in desperate need.  

With a bad credit history or even an imperfect score, banks may drag their feet or be completely unwilling to fund a large deal. Hard money is fast compared to bank financing. Although credit score can help a deal along, hard money is concerned more with whether the deal ‘makes sense’ and whether you will be able to pay back the loan. Although hard money is available for poor credit score borrowers, oftentimes borrowers with excellent credit use hard money because of the speed of funding, including developers and building rehabbers.  

Certain types of projects may not be eligible for bank financing ­ these can include certain commercial properties and types of businesses or operations, the land the property is on or the incompleteness or damage to a property. Hard money is designed to solve all of these problems and can fund a much broader range of properties and projects than bank financing.

 
The structure of a hard money loan is generally short-term. You should anticipate paying off the loan in as little as six months to a maximum of 5 years. Hard money is not a traditional mortgage, and with the interest rates being 1.5 to 2 times bank rates, it is far more advantageous to view hard money as a short-term solution. This is why hard money is also called a ‘bridge loan’.

CAUTION - Commercial Appraisals are expensive. DO NOT get an appraisal before you submit your deal to us. Oftentimes the appraisals submitted by appraisers are rejected because they do not understand the valuation process required by our investors and lenders or do not comp the buildings properly.

While hard money is not the solution for every project, it is a valuable alternative when bank financing falls through. The rates, speed & flexibility of hard money can be very attractive to commercial real estate investors, owners & managers.

GETTING STARTED IS SIMPLE

Just call us at (858) 602-7777 and our representatives will take your application and get the process started

Commercial hard money loans include:

Hospitality hard money loans, Hotel hard money loans, motel hard money loans, mixed use hard money loans, super jumbo hard money loans, apartment hard money loans, condo conversion hard money loans, industrial hard money loans, office building hard money loans, self storage hard money loans, shopping center hard money loans, warehouse hard money loans, apartments over retail hard money loans, assisted living hard money loans, automotive hard money loans (gas station hard money loans, car wash hard money loans), bed and breakfast hard money loans, commercial building lot hard money loans, corporate apartment hard money loans, garden apartment hard money loans, golf courses hard money loans, high rise apartments hard money loans, multi family hard money loans, condo conversion hard money loans, senior housing hard money loans, medical building hard money loans, office complex hard money loans, apartment complex hard money loans, shopping center hard money loans, parking lot hard money loans, strip mall hard money loans, retail hard money loans,  loft hard money financing,  construction hard money loans, acquisition and development hard money loans, rehab hard money loans and bridge hard money loans.