Benefits of Using Hard Money Financing for Commercial Real Estate
If you're looking for a loan to finance your commercial real estate endeavors, hard money loans could be your best bet. Hard money loans have a number of advantages over traditional loans and can help you close your next deal quickly. But first, let us define what hard money loan is.
What Is a Hard Money Loan?
A hard money loan is a specific type of asset-based loan financing through which a borrower receives funds secured by real property. Hard money loans are typically issued by private investors or companies. Interest rates are usually higher than conventional commercial or residential property loans because of the higher risk taken by the lender.
Hard money loans are used by investors for short-term financing of real estate investments. They are often used when conventional financing is not available or takes too long to process.
Benefits of Using Hard Money for Commercial Real Estate Investments
1 - Easier Application Process
Hard money loans are a great option for those who need funding fast. The application process is much simpler than traditional loans, and you can often get approved quickly. Hard money loans can be used for a variety of purposes, including investment properties, repairs, or renovations. If you're considering a hard money loan, be sure to shop around and compare rates from different lenders.
2 - Flexible Terms
Hard money loans have flexible terms, so you can choose a repayment schedule that fits your financial situation. Traditional loans often have inflexible terms, making it difficult to make payments on time.
3 - Quicker Closings
In comparison, hard money loans typically close more quickly than traditional loans. You can get the funding you need to purchase your commercial property quickly.
4 - No Prepayment Penalties
Another advantage is that hard money loans often have no prepayment penalties. You can pay off the loan early without having to pay a penalty.
5 - No Personal Guarantee
Hard money loans often do not require a personal guarantee. This means you will not be personally liable for the loan if you default.
6 - Asset-Based Lending
Another great thing about hard money loans is that they are typically asset-based lending. This means that the loan is based on the value of the property you are purchasing, not your credit score.
7 - Non-Recourse Lending
Hard money loans are often non-recourse lending. The lender cannot come after you personally if you default on the loan.
8 - Lower Down Payments
If you cannot make a large downpayment at the beginning of your loan term, hard money loans often require lower down payments than traditional loans. That way, you can get the property you want with less money down.
9 - Bridge Loans
Hard money loans can be used as bridge loans. This means you can use the loan to purchase a property quickly, and then refinance into a traditional loan later.
Conclusion
Hard money loans are a great option for many types of real estate investments. They have many benefits over traditional loans and can be used for different investments.
If you are looking to apply for a hard money loan for your next investment property, contact Jaken Finance Group today. We can help you get the financing you need to make your investment a success.