Commercial Hard Money Loans
Las Vegas Private Lenders LLC arranges loans for commercial real estate developers and investors. We match your deal with the financing source that best serves your needs, with common-sense underwriting and quick approvals.
In addition to traditional commercial properties, our commercial lending program includes non-owner occupied single family and multi-family properties.
We work with private investors and institutional lenders to provide a variety of financing structures including short term, bridge, interest-only, and fully amortizing loans at fixed rates.
What is a Hard Money Loan?
A hard money loan is typically a short-term loan used to purchase commercial or investment properties. They don’t come from a traditional lender but private investors or companies that emphasize the collateral value during the loan decision process. Commercial borrowers often seek hard money loans after having a mortgage or loan application denied by their bank. Hard money loans can also be very useful when a buyer has an unusual opportunity to buy a property below market value but must close quickly in order to seal the transaction.
Like a traditional mortgage, a hard money loan is secured by a first Deed of Trust or Mortgage on the underlying property. The “hard” part of “hard money” refers to the tangible real estate asset used to back the loan's value. When a borrower defaults on a secured loan, the lender can take ownership of the asset as the source of repayment of the loan.
Potential borrowers who may not qualify for conventional loans due to poor credit histories can often secure a hard money loan based on the amount of equity in the collateral property.
What Properties Qualify for Commercial Hard Money Loans?
A potential borrower can secure a hard money loan for almost any type of real estate, including multi-family residential, single-family residential, commercial, retail, industrial buildings and raw land
Commercial hard money loans are an ideal source of capital if:
- Traditional financial institutions are not an option.
- You need a loan within a short time frame.
Who Uses Commercial Hard Money Loans?
Real estate investors, business owners, and commercial real estate developers rely on commercial hard money loans for various reasons. The short time frame between application and disbursement of the funds is typically one of the most attractive features of these loans. Securing funding within a short time frame can be a significant advantage in a competitive real estate market. Sellers are often more partial to a prompt lump sum cash payment and may even offer a substantial discount to close the deal quickly.
Borrowers not on good terms with traditional lenders can often benefit from hard money loans. Foreclosures, poor credit scores, and other problems can prevent people from securing conventional loans.
Hard Money Vs. Conventional Loans
Unlike conventional mortgages or other types of secured loans, hard money loans come with a fast and typically less stringent approval process. If a purchase needs to happen quickly, it’s possible to close in just a few days with a hard money loan. A traditional mortgage can take several months from the time of application to receive the funds.
Conventional Loans
- The process often requires months to complete
- Requires a good credit history
- Not available for all types of properties
Hard Money Loans
- Faster and the less stringent approval process
- The collateral property is the preferred source of repayment
- Quicker access to funds over traditional lenders
- Flexible loan terms and creative loan structure to meet the needs of the Borrower.
The Bottom Line
Commercial hard money loans are becoming a staple in the competitive real estate market. To make the most of rising real estate prices, many developers and investors rely on private investors and hard money loans to finance their real estate ventures. The experts at Las Vegas Private Lenders LLC can help you determine the best type of financing for your transaction.