Commercial hard money loans have been around for a very long time, probably even before home equity loans came into existence. It’s just that nobody talks about them that much, or people are not aware of their advantages over bank real estate loans.
To answer your question on how to get commercial hard money loans, then chances are you have come across this article at just the right time because we are going to tell you everything there is to know about it and how can you benefit from it for you to make an informed decision when borrowing cash through these types of deals.
What are Commercial Hard Money Loans?
A commercial hard money loan is a short-term loan used to finance the purchase or renovation of commercial property. Private investors or lending institutions typically make commercial hard money loans.
They are different from traditional commercial mortgages in that they are not secured by the property being financed. Instead, the loan is secured by the borrower’s guarantee and collateral such as a share of the business, equity in other properties, or assets such as accounts receivable or inventory.
Commercial hard money loans are typically used to finance transactions where traditional financing is unavailable, such as real estate purchases or renovations requiring a quick turnaround time. The terms of a commercial hard money loan are also typically much shorter than those of a traditional mortgage, ranging from 6 months to 5 years in most cases.
What Can I Do to Improve My Chances of Qualifying?
The best way to increase your chances of getting accepted for a loan is to ensure that you get all the necessary documents such as business plans, financial statements, and income statements needed by lenders because these will tell them how viable your business can be with its potential.
Most lenders would want to know if you have been in the industry before and how long you have established yourself in this line of business. Although history counts a lot when it comes to commercial hard money loans (just like any other type of mortgage), it doesn’t mean that new businesses cannot qualify for this kind of financing.
If you plan to start up an independent company and need money quickly without problems, should repayment become an issue, consider getting help from business partners later on.
Also, to increase your chances of being approved for commercial hard money loans, try getting referrals from other investors in the same industry as you are because this will prove to lenders that you know what it is all about when it comes to risk-taking in this kind of venture.
As much as possible, do not let lenders see that you have no experience investing in real estate or any other type of project similar to this. Although history counts a lot, new investors can also get credit to build a good rapport with their lender.
The best thing you can do is be honest with people or show them that you are trying your best to establish yourself well, including ensuring that you have all the necessary documents to back up your claims. You can also choose to give them copies of the loan agreement you have with previous lenders, so they will know that you are not a new face in this industry.
Are the Fees Going to Be Extensive?
If you are really set on getting commercial hard money loans, then expect that rates would be very high because investors want to ensure that they will get their money’s worth once repayment becomes an issue.
You should only take out these kinds of loans if you need quick cash for your business projects and can still afford to pay them within a reasonable time despite interest charges being hiked up along with other fees involved. Although this might sound discouraging, it is still better than losing your property to foreclosure.
Why Should Investors Take a High-Interest Loan When Banks Offer Lower Interest Rates?
Banks and other lending institutions offer lower interest rates because they consider these part of their business expenses, including paperwork needed to sustain operations and create legal divisions for commercial transactions.
Investors who give out money through commercial hard money loans do it more personally with only the money as the interest rate factor involved. Most would not even want any part of paperwork as long as repayment is secured already by the debtor from whatever source they can get from.
Is It Possible To Qualify With a Bad Credit?
Despite bad credit, you still have a chance to qualify if you can convince your lender that you are not a risk-taking type of person because lenders would be more than willing to help you out as long as they feel that their money is secured.
If you want to get accepted for this kind of loan, then try asking your family members or friends who might have good connections with investors in this industry.
How Do I Qualify for a Commercial Hard Money Loan?
Getting commercial hard money loans is very easy, but it is still the same old game of jumping through hoops like any other kind of loan, whether conventional or otherwise. The most crucial factor here is how much business experience you have and if people endorse your capabilities in running a viable business.
Also, having a good reputation with lenders adds more weight to your application, especially if you have been working within the same industry for quite some time now.
Most Excellent Commercial Hard Money Lender in Nashville, Tennessee
There are many commercial hard money lenders in Nashville, Tennessee. Choosing a lender with a good reputation and years of experience is essential. Some of the factors you may want to consider when selecting a lender include:
- The amount of money you need
- The terms of the loan
- The interest rate
- The fees associated with the loan
It is essential to compare offers from different lenders and ensure you get the best deal possible. If you’re looking for reliable, experienced Nashville, TN money loans, you can’t go wrong with BridgeWell Capital. They offer competitive rates and terms, and their team of experienced professionals will work with you to find the financing solution that best suits your needs.