A Win-Win Situation: Commercial Lending with a Private Hard Money Loan

Commercial lending with hard money loans, also known as private loans, offers several advantages over traditional loans. They base their loans on collateral as compared to credit scores, fund in as little as two days compared to more than a month, and can offer flexible terms.

In some instances, a business or real estate investor will not qualify for a traditional loan due to the stringent credit and capacity requirements of a bank. They do, however, have available collateral. A hard money lender can provide a win-win situation. The loan is acquired and the lender earns above-average returns.

In other instances, it is not concern about creditworthiness that leads real estate investors, contractors, businesses and home owners to search for personal and commercial lending through a hard money lender, but the time constraints that they are under. An investor may have found a property perfect for renovation or a quick fix and flip and needs to have cash in hand in order to fund the project before someone else beats them to it. A business may need immediate funds for equipment or operations and can’t wait the month or more than a traditional lender requires. A home owner may want to put money down on their new home before selling their old one in order to ensure their bid is not rejected due to a contingency sale.

Private lenders are not under the same regulatory scrutiny that banks are in regards to commercial lending. They do not have to fill the more stringent FDIC and government mandated lending requirements that conventional banks do. This gives them flexibility in lending and allows them to structure repayment in ways that will help the borrower succeed. In most instances, there are no prepayment fees as often seen in traditional financial institutions, giving the borrower the ability to pay off the loan early should their home sell in record time or their latest fix and flip take less time to rehab and a buyer is found in days instead of months. With one loan under their belt, they then go on to the find and fund their next project and a mutually beneficial “partnership” has formed.

Why Work with a Mortgage Broker?

When delving into the world of commercial lending, working with a hard money loan mortgage broker may be your best consideration. They generally work with a lot of investors and can often find a way to qualify you for a loan when other banks and lenders cannot. Stricter requirements and more education and experience are required for those who are licensed mortgage brokers as compared to that of mortgage banker, so it is best to seek the advice of the former when looking into this type of loan. In addition, choose one who has stood the test of time. Not only do they have more experience, they also have more contacts and investors that they can choose from to help you develop your project or succeed in your business.

Brokers are mortgage experts. They’ve worked with countless investors and know which loans are appropriate for different types of projects and properties.

At Level 4 Funding, we have a great team of professionals that can get you the right hard money loan for your needs at the best possible rate. Call us for a consultation and to discuss your unique project and needs.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.