When it comes to financing commercial real estate projects, traditional lending institutions can be notoriously difficult to work with. The lengthy application process, stringent credit requirements, and extended wait times for loan approvals are just a few of the headaches that investors, business owners, and developers must endure. That’s why commercial hard money loans may be a better option for real estate investors, business owners, and commercial real estate developers.
What is a Commercial Hard Money Loan?
A hard money loan is a short-term, non-conforming loan for commercial or investment properties. Non-traditional institutions like investors, investment groups, commercial lenders, or individuals typically offer these types of loans. Term lengths for hard money loans are short-term. The collateral of the property backs hard money loans. If the borrower defaults on the loan, the lender has the right to take possession of the property. Advantages of Commercial Hard Money Loans Include:
1. Quick and Easy Access to Funding
One of the most significant advantages of commercial hard money loans is that they can be secured quickly. Commercial real estate developers and investors often need to secure funding quickly to capitalize on a time-sensitive opportunity. Traditional lenders can take months to approve a loan application. Hard money lenders can usually approve and fund a loan in a few days.
2. More Flexible Lending Criteria
Traditional lenders typically have strict lending criteria, making it difficult for some borrowers to qualify for financing. In contrast, commercial hard money lenders are often more flexible in their lending criteria. Even if you have bad credit, you may still be able to secure a hard money loan. Home money loans are based more on the property’s value than on the borrower’s credit score or financial history. Banks and traditional lending institutions often consider borrowers with poor credit, a history of foreclosure, or other issues too risky and will deny financing.
3. Greater Flexibility in Loan Terms
Commercial hard money lenders are often more flexible in their loan terms than traditional lenders. The more flexible repayment schedules that align with the project’s timeline and cash flow needs are attractive to investors and developers. Some hard money loans provide interest-only payments during the loan term and a balloon payment at the end. Traditional bank loans, on the other hand, are usually more rigid in repayment terms.
4. Multiple Property Types
Commercial hard money loans are available for many different types of investments. Commercial real estate developers and investors looking to secure funding quickly can benefit from hard money loans for various property types, including the following:
- Multi-family rental
- Single-family rental
- Commercial
- Industrial
- Retail
- Land development
5. Gives Investors a Competitive Edge
Hard money loans allow investors to stand out from the competition utilizing standard loans. Sellers prefer cash offers and being able to close a transaction promptly. Time is crucial, especially for large development projects, and hard money loans can be funded in days rather than months.
6. Opportunity for Increased Profit
Commercial hard money loans are becoming a staple in the competitive commercial real estate market. To make the most of real estate opportunities, many investors rely on private investors and hard money loans to finance their real estate ventures. Sellers offered a lump sum cash payment may provide a substantial discount to close the deal quickly.
7. Avoid the Frustrations of Conventional Loans
Commercial hard money loans can be an excellent option for investors, business owners, and developers who need quick, flexible financing solutions for their commercial real estate projects. If you’re tired of dealing with the frustrations of traditional lending institutions, consider the many benefits of commercial hard money loans.
Why Work With Professionals?
Commercial hard money loans are becoming increasingly popular for commercial real estate investors and developers. Borrowers should carefully consider their options and choose the type of loan that best suits their needs and financial situation. Commercial hard money loans can be an excellent solution for those needing quick financing or with less-than-perfect credit. Professionals will help you choose the best loan option for your needs and work with you from the application process to closing.
Las Vegas Private Lenders LLC is a Florida-based finance consultant. In addition to offering traditional commercial finance products, we specialize in flexible private hard money lending programs that suit today’s investor needs.
Las Vegas Private Lenders LLC has over 30 years of experience in commercial real estate finance. We can help you determine the best type of financing for your transaction.
Las Vegas Private Lenders LLC provides Commercial Financing to mortgage professionals, real estate investors, commercial developers, and property owners Nationwide, with an emphasis on Florida, including Fort Myers, Naples, Bonita Springs, Sarasota, Tampa, Venice, Orlando, Cape Coral, Miami, and Fort Lauderdale. Contact us today at (239) 451-8559.