Tag Archives: commercial hard money loans

How to Obtain Commercial Hard Money Loans Even with Bad Credit

October 16, 2017Uncategorizedcommercial hard money lenders, commercial hard money loansbigdaddydennis

So you don’t have a 700+ credit score and you’ve received a few dings on your credit history… in business, this scenario is sometimes unavoidable. However, you can still get financing via commercial hard money loans even with bad credit – with these tips.

The fact is most people and business owners have some amount of debt, so you are not alone. However, having less than desirable credit can indeed make it more difficult to obtain a loan from traditional banks, which are known to be extremely (and notoriously) conservative lenders. But you can still seek commercial hard money loans from alternative lenders and there are other ways to ensure eligibility and avoid the pitfalls of getting your loan rejected.

Aside from your credit score, there are many things that banks and other lenders take into account when reviewing your loan. A solid business plan is another item that lenders consider. Presenting a clear and detailed outline of your plan of action to develop or grow your business, market your company and most importantly, make money, is a great way to detract from the fact that your credit might be not so squeaky clean.

In a business plan, you can give in-depth analyses and examples of how you plan to earn money or take your existing business to the next level. Include goals for growth, what you want to accomplish with your business and be clear about the strategies in which you’ll use to ensure your business will bring the lender the return on investment that he is looking for.

While a solid business plan is one key way to seek eligibility for commercial hard money loans, there are still other things you can do to up your chances of getting your approved.

That comes by way of reaching out to your creditors. If you have debt – make sure you are keeping up with payments. While rebuilding credit is a lengthy process, making payments on time shows the lender good faith that you are trying to uphold and honor the financial commitments you’ve previously made.

If all else fails, there are still other options to getting commercial hard money loans, even with bad credit.

These types of lenders don’t scrutinize your credit score nearly as much as a conservative bank or conventional lender might. As long as you have some assets to back the loan in the form of collateral, or you are able to show that you will be able to repay the loan, that is ultimately the most important thing you need to improve in the case of getting approval for these types of loans. So while you don’t have to sweat bad credit, it’s always a good idea to try to repair it, as the benefits of having good credit are many.

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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How Commercial Hard Money Lenders Can Be the Helping Hand You Need to Build or Grown Your Business

October 16, 2017Uncategorizedcommercial hard money lenders, commercial hard money loansbigdaddydennis

Commercial hard money lenders are the experts that know the ins and outs of loans and investments and can help you find the loan to fit your needs. If you are ready to get a loan, these professionals can be your key to approval eligibility.

Whether your business is in need of a long-term loan to purchase a building, an equipment loan for machinery or other equipment, or a short-term loan for cash fast, commercial hard money lenders can help you find approval success. But first it’s important to know what you are getting into when you set out to work with these types of financiers.

These lenders often handle just a sole property type, which means that you will probably be dealing with a specific niche lender when you are seeking hard money funding. If you are looking to obtain short-term commercial loan financing, it’s important that you find a lender that works specifically with businesses of your same caliber or in your general industry. It is crucial that they understand the ins and outs of your market in order to best help you navigate your loan application.

These lenders do not operate in the same way as a traditional bank might when it comes to your loan process. They can be much more flexible in the case of a foreclosure, less than desirable credit or dings on your credit history, so that can be very beneficial for new businesses that have yet to establish credit history or for businesses that have experienced some growing pains or rough patches that left their credit history a bit tarnished.

Commercial hard money lenders can be just the experts to help you navigate a non-traditional loan.

If your company has special circumstances that you think may prohibit you from obtaining a conventional bank loan, these lenders are the way to go. They can help you in your particular niche. They have all the expertise about specific types of loans that would best benefit your company, and they can help you understand the terms of the loan you need. They have the ability to negotiate better terms as well.

Finding the right commercial hard money lenders is key.

Take some time to research the right financing partner for your business. This is an individual who you need to trust with your personal and business financial history, as well as the future success of your business, so now it not the time to take short cuts in your research or due diligence in finding the right lender for your business needs. Once you find the right lender, you will know and that will put you at ease as you begin the loan application process together.

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How to Prepare for Obtaining Commercial Mortgages

October 16, 2017Uncategorizedcommercial hard money lenders, commercial hard money loansbigdaddydennis

When your company is in need of a loan, whether it’s the first or if you have secured commercial mortgages in the past, there are still many things to consider. There are also a number of ways you can properly prepare to ensure the success of your loan application process.

Even if you have a solid business plan, a great credit score and squeaky clean credit history and collateral to boot, getting commercial mortgages loans can still be a lengthy and complex process. If you take some things into consideration before applying, you can avoid some of the pitfalls that companies make which ultimately may make the difference between getting approved for a loan… or not.

Before seeking a loan, you should know that during the underwriting process you will be subjected to thorough financial examination. You should have all financial records in order – such as bank statements, recent credit report, tax returns, business balance sheets and more – before applying for a loan. Some banks and lenders may also request that you complete a revenue and expense projection report. Having this information completed prior to application, will make the process go more smoothly.

In addition to business records, as the business owner you may be asked to show personal statements as well in order to receive a commercial mortgages loan. Banks and lenders will want to know as much about your personal financial background as possible before deciding if they want to give you a loan. They will want to review your personal credit score and history, and could also ask to see your personal tax returns or other important financial information.

Another way to prepare is to consider whether or not you have and/or will need to utilize collateral in order to secure your loan. Collateral, or assets from your company or personal use, can be used to secure a loan in the case of not so great credit history or other examples. The lender needs to know that if you are unable to repay the loan, he will not lose out. With collateral, you guarantee repayment and if you cannot repay with cash, the lender has the right to seize your assets as agreed upon in the contract.

The key to successfully obtaining commercial mortgages is preparation.

You’ve heard how important location, location, location is in residential real estate, right? Well, preparation, preparation, preparation is just as important when it comes to commercial lending. The better prepared you are, the better off you will be – and less stressed too!

Getting some assistance with your preparation is never a bad thing!

You may be an expert in your line of business, but if you aren’t keen on preparing a business plan or the like, it’s not a bad idea to bring in an expert to help you prepare to put your best foot forward when it comes to securing a loan. The more prepared, the less hassle you’ll encounter. But remember, lenders and banks aren’t trying to cause you grief – they simply need to protect themselves and ensure you have the ability to pay back the loan they are laying on the line for you.

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Tips for Determining What Type of Commercial Hard Money Loans are Right for Your Business — Secured or Unsecured

October 16, 2017Uncategorizedcommercial hard money lender, commercial hard money lenders, commercial hard money loan, commercial hard money loansbigdaddydennis

Once you’ve figured out that you need to secure financing to help your company get off the ground or grow to the next level, there is still more to decide. You it’s important to know which type of commercial hard money loans are best suited for the funding you need for your business.

Determining that you need a loan is merely “step number one.” But as a business owner, you’ll need to be prepared to take many more steps towards selecting the type of loan you need and then going through the loan approval process. With all commercial hard money loans, there are advantages and disadvantages, and certain loans may suit your company’s needs more than others so it’s important to take some time to research the various types of loans or speak with a professional lender who can help advise you on what type of loans would be best for you and your business needs.

Two very common loans are secured and unsecured. They are the same in many ways; however, they also have some important differences. A secure loan, for example, is typically associated with a larger loan sum than an unsecured loan, and this is based on the amount of collateral that a business has to put up to back the loan. In the case of a secure loan, you can use collateral, or your company’s assets to obtain or “secure” your ability to repay the loan. If you are unable to pay the loan back, you could lose your collateral to the lender. Assets can be business equipment, a vehicle or even your home. Secure loans are often more flexible due to this reason. Because there is less risk involved with this type of loan, interest rates are typically lower than with an unsecured loan, and include options such as fixed or variable.

If you do not have any collateral to put up, you may need to seek unsecured commercial hard money loans. Without having collateral to back the loan, the lender assumes a higher risk. Because of this, unsecured loans typically are associated with higher interest rates and have a fixed (and sometimes rigid) repayment schedule. There is usually a timeframe for when the loan must be paid back within. However, one upside is that these loans are typically approved much more quickly than secured loans.

If you are unsure if a secured or unsecured commercial loan is right for your business, you may need to seek the guidance of a professional commercial lender.

Sometimes it’s just a matter of speaking with an expert on a topic to help you determine which loan is best suited for your business. There are also a few questions you can ask yourself to help you determine your needs – do you need a large sum of money? Are you in need of cash fast? Do you have something of value to put on the line as collateral? These are all things to consider and in these answers, you are likely to see which loan is best for you.

Once you’ve decided which type of commercial hard money loans you need for your business, you can move on to “step two.”

Research professional lenders that are experienced in the type of loan you desire, and also the type of business you are building or expanding. Having someone to help guide you through the loan process can make the entire process much more smooth and much less stressful.

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Work From Home with the Help of Commercial Hard Money Loans

October 16, 2017Uncategorizedcommercial hard money, commercial hard money lender, commercial hard money lenders, commercial hard money loan, commercial hard money loansbigdaddydennis

It’s the new American Dream to have your own business that you can run out of your own home. With the assistance of commercial hard money loans, you can take your dream of working from home and turn it into a reality!

In today’s digital age, running a company remotely is perfectly within grasp — yes, you have to be willing to work hard day in and day out, but it can be done! Instead of wasting your life away at the office, punching another company’s time clock, think about how commercial hard money loans can be just the thing you need to catapult you from daydreaming about being your own boss to actually making that happen! Getting approved for a loan is one step closer to making your work-at-home dream come true.

Commercial hard money loans are asset-based loans, which means exactly what it sounds like. These loans are secured by your collateral such as inventory, machinery, equipment, real estate, accounts receivable that you can put up as assets. This is an ideal financing option for small start-up businesses that can be run out of the home.

Asset-based financing can be secured via private hard money lenders, and while they have many uses, it’s a good ideal to outline your investment plan in a solid and detailed manner prior to trying to get your loan approved, and be prepared to present a solid work-at-home business plan as well. In cases like this, your credit score might not play as much into the lenders’ decision to approve your loan as other factors might. While the credit score or event your debt-to-income ratio or personal finances won’t come into consideration nearly as much as a solid business idea and the ability to prove that this idea will make money. The more confident the lender is that you will be able to pay back the loan, the higher your chances of approval eligibility are.

You can own your own business and work from home with the help of commercial hard money loans.

Knowing that this type of loan can get you from just dreaming about your own work-from-home business to actually owning and running your own work-from-home business should be enough to get you started! Now it’s time to research lenders in your area and try to configure the loan amount you will be seeking.

To determine what loan amount you need and how much you’ll be responsible for paying back monthly, check online.

While you can’t rely on the internet for everything, it is a good place to start when you want to roughly calculate your monthly payment sum based on the loan amount you desire. You can do a quick search to find an estimation calculator online that can give you an idea of the amount you will owe monthly based on your loan amount. With the help of this type of loan, soon you’ll be up and running your new business out of the comfort of your own home and living the American Dream that you worked hard to achieve!

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Learning More about Commercial Hard Money Loans

October 11, 2017Uncategorizedcommercial hard money lenders, commercial hard money loan, commercial hard money loansbigdaddydennis

Commercial hard money loans are a good short term option in some cases. Knowing more about securing the loan will help you decide if this is the tool that you need to purchase a property.

Commercial hard money loans are an alternative to conventional commercial loans. The lender is not a bank or other formal lender and the terms are substantially different from those of a traditional commercial loan. But commercial hard money loans do provide a good short term option if you have been turned down for a traditional loan or you need the money in a very short time frame.

When applying for a traditional commercial loan, you know that you will need to have good credit and no foreclosures on your credit history. But your credit is not as important when you are seeking commercial hard money loans. The reason is that a hard money loan is secured by the property value of the property that you are buying or some other type of collateral. The lender is primarily interested in the collateral value and its location. The interest rates on a hard money loan are higher and so are the fees that the lender charges so they are willing to take a little bit more risk on a borrower with less than stellar credit. As long as the lender can foreclose on the property or take possession of the collateral then they are assured of being able to recover their investment.

Because a hard money loan is secured with collateral, you might be under the impression that you do not need to make a down payment, but that is not the case. You will never find a lender who is willing to finance the entire cost of a property. All lenders require instant equity to ensure that they will be able to recover their entire investment in the event of a foreclosure. And because commercial property values can be volatile, you will likely need to have a down payment which is as much as 40%. The terms can vary greatly because most hard money lenders are individuals and the loans are not regulated in the same manner as a bank loan.

Beware of Certain Less then Legitimate Lenders

As with any business, there are some legitimate businesses and others that are scams or rather shady. You should complete your due diligence with any lender including a hard money lender. Never pay any fees to have a lender look at a property or consider financing a deal. This is a sign that they are not legitimate. Also, any lender who is willing to finance 100% of the cost of the property is likely to be a fraud. In most cases you will be charged a few fees for processing and maybe even a property appraisal but you will never see a loan document or the money that you need.

Know What You Are Getting Into

As with any business deal it is important to know who you are doing business with and what the terms of the deal are. Spending some time to learn about the lender and the process for a legitimate hard money loan will help you to select a reputable lender and sign a deal with terms that will work for both you and the lender.

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How Commercial Hard Money Lenders Differ From Traditional Lenders

October 11, 2017Uncategorizedcommercial hard money lenders, commercial hard money loansbigdaddydennis

A hard money loan is a non-bank loan. Some loans are not desirable for banks but they are for commercial hard money lenders who are looking at different criteria from their borrowers.

Commercial hard money lenders are not in business to crawl through your financial history of the past five years and determine that you have a good chance of making ten years of mortgage payments. They are in business to loan money because the loan is secured by the value of the property that is being purchased or by some other valuable asset in some cases. Your financial history, possible mistakes and indiscretions are far down the list of critical criteria that commercial hard money lenders are evaluating. There are a few other differences in the process and terms of the loan as well.

One of the biggest differences that borrowers notice are the fees associated with the hard money loan. A conventional loan would cost a few percent of the loan but commercial hard money lenders can charge as much as three times that of a traditional lender. The upfront fees are also more on a hard money loan. Conventional loans are around 1% of the total of the loan but a hard money loan can be as much as 5% for the upfront costs.

Loan terms are the next big difference. Traditional lenders can offer terms that range from five years up to about thirty years but a hard money loan is going to be from six months to a year tops. All of these differences seem to be in favor of the lenders and it can seem odd that anyone would ever choose to use a hard money lender. But the reasons to use a hard money lender become much clearer when you learn about the next two differences.

The First Borrower Benefit

When you approach a traditional lender for a loan, you know that you need to have a certain credit score and that there can be no blemishes on your credit history. You need to fit relatively well into the mold that the lender has for a borrower. If you don’t fit than you don’t get the loan. But a hard money lender is more interested in the value of the property that you are purchasing or the value of the item or items that you are using as collateral. The thought is simply that if you don’t make the payments then the hard money lender will take the property or other collateral and recover their investment.

The Second Borrower Benefit

This is where the old saying “Time is Money” comes into play. In this case the time is unbelievably faster than a traditional loan. A bank or other lender might claim to close a commercial loan in 30-60 days but in most cases it is more like 45-90 days if you are on the fast track. But a hard money loan can close in as little as 7 days. This is because there is not all of the red tape and processes that a large lender follows. There are rarely loan boards and or legal departments that need to be involved. If the collateral is sufficient then you are looking at getting the hard money loan that you need. So it is now a bit easier to understand why hard money loans are growing in popularity.

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Reasons to Seek Commercial Hard Money Loans

October 11, 2017Uncategorizedcommercial hard money lenders, commercial hard money loan, commercial hard money loansbigdaddydennis

There are many good reasons to seek commercial hard money loans. Understanding these reasons can help you to grow your business or even save it from failure.

Commercial hard money loans are known to have a higher interest rate than conventional commercial loans and for that reason, many business owners shy away from this type of lender or loan. But there can be several times when choosing to use commercial hard money loans is a very smart business decision.

There are often occasions when time is your biggest enemy. In the case of commercial real estate this can be very true. Finding the perfect property at a great price means that there is likely to be a lot of interest in it. So you need to be able to begin the purchase process quickly to ensure that you get the property. But waiting for two or more months to get a conventional commercial loan processed is just not going to work. Commercial hard money loans can normally be processed much more quickly than that and sometimes as quickly as just a day or two. Paying more for the loan to secure the property is better than losing the property.

And even if time is not a factor, there could be other reasons that you are not able to qualify for a conventional loan such as lack of liquid assets, income issues or the age of your business. Many new businesses are not able to provide the long term income statements and cash flow documents that a conventional lender such as a bank would require. But hard money loans do not have the same qualification criteria that conventional loans do. So this could be a great way for you to get the loan that you need even as a new business.

This Is Not Your First Mortgage

In most cases you would think that having another mortgage would be good for your credit. It demonstrates that you have been found to be creditworthy and that you are in good standing with another lender. But in the case of commercial loans having existing mortgages can put you into a high risk category. This means that other lenders will not finance a loan until you have paid off the existing one. So using a hard money loan is a good way to be able to hold both loans at the same time.

Higher Cost is better than Failure

Even though a hard money loan can cost more than a conventional loan, it is much better to pay for the financing than to face foreclosure. If you have been unable to make the payments on your property then you could be very close to defaulting on the loan and facing the loss of the property. This could also mean that your business could be in jeopardy as well. If this is your situation, then it is very smart to use a hard money loan to pay off your commercial property loan and seek new terms for the loan. It is much better to lengthen the term of your loan and pay more interest than to lose your property and your business.

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4 Reasons for the Popularity of Commercial Hard Money Loans

October 11, 2017Uncategorizedcommercial hard money lenders, commercial hard money loansbigdaddydennis

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.

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Why Real Estate Investors Use Commercial Hard Money Loans

October 11, 2017Uncategorizedcommercial hard money lender, commercial hard money lenders, commercial hard money loan, commercial hard money loansbigdaddydennis

Successful real estate investors understand that leveraging other people’s money is the way to build your own wealth. Commercial hard money loans are a popular tool to accomplish this process.

Savvy real estate investors know that using other people’s money to fund great deals is the fastest way to grow your personal wealth. This method allows investors to purchase much more expensive properties which increases their profit on each transaction. And in return it also provides the lender with a nice return on investment.

Commercial hard money loans are not like traditional loans in that they are not a one size fits all loan. In most cases the dollar amount of the loan and the terms are customized to meet the needs of each transaction. This means that a first time flipper can get a loan that offers the dollar amount and the time frame that is needed just as a commercial investor can for a much larger deal. This flexibility makes commercial hard money loans very appealing to all real estate investors.

Another benefit of commercial hard money loans is that approval is based less on the borrowers credit score and more on the merits or the property or deal being made. This opens up the commercial real estate industry to investors who might not have perfect credit or who already are carrying a few mortgages on other properties. The final decision on getting a loan rests on the merits of the property that is being purchased and used as collateral.

Personal Attention Has It’s Benefits

Borrowers also like to use hard money lenders because they are working with a person and not a huge lending institution or bank. Not only does this make the process much faster but it also can offer a much more personal and tailored transaction. You are not calling a number only to get passed from one department to the next to get a question answered or check on the status of your loan. You work with the person whose money you are borrowing and you can make direct contact to resolve an issue or answer a question.

Nontraditional Can Be Better

Hard money loans are not the best solution for every commercial real estate transaction but they are a unique solution for many of them. The terms of the loan can meet each borrowers needs and can be processed in a fraction of the time that is required for a traditional loan. The cost for this custom service is more than the fees for a traditional loan but are worth it if you were struggling to get financed at a bank. And in the case of a real estate investor who might be in process on several deals, there is not the high risk issue on a hard money loan as there would be on a traditional loan. The merit of the individual deal is what carries the weight with a hard money lender. Hard money loans are favored by real estate investors because it is a means to increase their business and their profits.

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