Secrets of Texas Commercial Lending : What is Hard Money?

4page_img2This is a term that is often thrown around in Texas Commercial Lending circles. If you plan on seeking out loans to help your business grow, this is an essential term to have a grasp on before getting in over your head.

Attempting to find a Texas Commercial Loans through traditional vendors is not the only gig in town. Many small business owners simply quit if the bank tells them that they are not eligible for a loan. This might be because they have not been in business for long enough, don’t have enough personal equity or cannot assemble the necessary assets to qualify.

But all is not lost if you have been turned down by a traditional lender. Hard money is a solution that has the potential to bring your small business to the next level, if used wisely.

So what is hard money? Essentially, hard money is a loan from a non-traditional loan from a private investor. These loans are typically backed by some sort of trust against the value of the property. It is not just an easy hand out for the borrower, however, as hard money also usually requires some sort of equity or collateral that is put forward by the borrower. In Texas Commercial Lending, the assets that are put forward serve as the security for repayment.

One of the biggest appeals of hard money is the speed at which it can be acquired. While it does not happen overnight, it is significantly quicker than a traditional loan. One of the main reasons for this is the presence of collateral and equity. While typical lenders often require extensive paperwork and a negotiation of terms, hard money lenders do not have that far-reaching process. This cuts the timeline down from months to weeks, or even days.

Lenders who specialize in hard money don’t care about the laundry list of items that traditional lenders must wade through in order to reach a decision. They are simply interested in providing short term loans that are secured by assets. In Texas Commercial Lending, they know that if the loan is not repaid as agreed upon that they have the right to seize the assets that were put down as security.

Nevertheless, this does not come without a price as hard money loans usually have a much shorter term for being paid. This can work to the benefit of the business owner, however, as the loan will be off the books and taken care in a short period of time. Hard money loans also typically have interest rates than traditional loans.

So what are the benefits of hard money in Texas Commercial Lending?

Hard money allows small business owners to quickly act on a potential business opportunity that they might otherwise miss due to lack of current capital. Because they are designed for the short term, hard money loans can easily infuse your business with cash flow to move to the next level. It is also a good solution for small businesses that do not have a track record necessary for a traditional loan, meaning those that have not been in business for very long. In Texas Commercial Lending , hard money can be very helpful to a small business that is looking to quickly expand.


Dennis Dahlberg
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177 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.

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