Commercial Hard Money Loans For Properties In California
By G. David Lapin On June 13 2023
Real estate investors, non-profits and small business owners need access to capital using commercial hard money financing options.
Commercial hard money loans are a type of financing provided by private investors/Beneficiaries or companies that specialize in lending money for commercial real estate projects. These loans are typically short-term but can be written out for long-term. They can be full recourse or non-recourse. Many borrowers find that hard money can be more flexible regarding global income and DSCR. They have become a good alternative for commercial bank turn downs.
Here are some key features of commercial hard money loans:
1. Collateral: The property being financed serves as collateral for the loan. The private money company assesses the value of the property and determines the loan amount based on its estimated worth.
2. Higher interest rates: Commercial hard money loans generally carry higher interest rates compared to traditional bank loans. This is because they are considered riskier due to the shorter repayment terms and the nature of the borrowers who may not qualify for conventional financing.
3. Quicker approval and funding times: One of the main advantages of hard money loans is the speed at which they can be approved and fund out loans. Unlike traditional lenders, hard money lending focuses less on the borrower's creditworthiness and more on the value of the property. This allows for a faster loan approval process.
4. Short-term loans: Hard money loans are usually short-term loans, typically ranging from six months to a few years. Borrowers often use these loans to acquire, renovate, or develop commercial properties with the intention of refinancing or selling them within a relatively short period. Longer-term loans are available too but not typical.
5. Flexible terms: While hard money loans often have higher interest rates, they offer more flexibility in terms of approval criteria and loan terms. Borrowers who may not meet the strict requirements of traditional lenders may be able to secure financing through a hard money loan.
6. Use for various purposes: Commercial hard money loans can be used for various purposes, including property acquisitions, refinancing, construction projects, renovations, or bridge financing until the loans can be taken out by a sale or refinance.
A" one box does not fit all" approach is what hard money financing offers. Commercial hard money loans provide capital, flexibility, speed and focus more on the asset allowing real estate investors creative financing terms.
For more information on our Hard Money Loans or Trust Deed Investments, call our office at 714.838.1474 ext. 102 or visit our:www.hanovermc.com