Commercial hard money loans have grown in popularity in the past decade. Both lenders and borrowers are finding advantages to this unconventional loan from a nonbank lender.
Commercial hard money loans have become very popular with both borrowers and lenders. There are benefits for both parties and the loans are meeting a need for investors as well as those in the commercial real estate industry. Learning more about the appeal of these loans explains the increase in their popularity.
The mutual benefit enjoyed by both the borrower and the lender make these a great financial tool. They are serving the needs of the borrower who wants to purchase a commercial property but might not have the best credit or the time to complete a traditional commercial loan application. The other beneficiary in this deal is the investor or the lender. The lender is making a great return on investment and also has the security afforded by the collateral on the loan. If the borrower defaults on the loan then the lender can foreclose on the property and sell it to recover their investment.
The trying financial times of the past recession are still lingering in the form of poor credit history for many. But commercial hard money loans have provided those borrowers with a resource that does not depend on their past credit. The hard money loan is secured based on the value of the collateral and with some interest in the borrower’s current ability to repay the loan. Much less importance is placed on the borrower’s old credit history. In this instance commercial hard money loans are providing businesses with a second chance to purchase property and rebuild damaged credit.
Hard Money Loans are good for Everyone Involved
The concept of asset based underwriting is beneficial to both the borrower and the lender. It allows borrowers more opportunity to qualify for a loan and it also allows the lenders to make well informed decisions about who to approve. Again, this is a feature of hard money lending that benefits everyone involved in the transaction as well as the overall economy.
Lenders are Getting Rewarded
Not all of the benefits are going to the borrowers. It is true that the hard money loans offer opportunities to those who would not qualify for a traditional loan. But in return for the more lax criteria for qualification, lenders are reaping a great benefit. They are earning a much higher return on investment than they would get investing in other areas of the economy such as the stock market. And the lender is in a position of more control over their investing. They are determining who they choose to lend their money to and the terms at which they are willing to lend it. In the end, hard money lending is growing in popularity with lenders because it is a great investment with an above average return. And borrowers who were turned down for traditional loans are seeking hard money loans as an alternative that meets their needs and presents less difficulty in the application and approval process.
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.