Why Small Commercial Hard Money Loans are More Difficult to Get

    by Aditi Bansal

Updated on Montag, 15. Mai 2017

In the world of private hard money loans lending, getting very small loans is generally viewed as a troublesome endeavor. In most cases, small commercial hard money loans are any amounts that are less than $50,000. For instance, many hard money loans don’t even give loans that are below $100,000.

tags  #Commercial hard money  #Small Loans #


The main reason as to why the very small hard money loans are difficult to acquire is because it takes almost similar effort to get a small loan as it takes a large commercial hard money loan. And since mortgage lenders and brokers are compensated by taking a small percentage of the loan amount, they receive a higher commission when they give a large commercial hard money loan. Therefore, many lenders and brokers won’t be interested or even spend time in discussing your small-sized commercial hard money loans, and this limits the available small loans in the market. 

Another major reason as to why small commercial hard money loans are difficult to get compared to large commercial hard money loans is because these small loans are often meant for consumer purposes, for instance, paying off medical bills or credit card debts. Due to the recently introduced financial protection laws, most commercial hard money loans lenders have now stopped consumer-lending and don’t make small-sized consumer based commercial hard money loans.

Due to the emergence of peer-to-peer platforms in the recent years that can lend finances, especially those platforms that provide financial assistance to consumers, it is now possible to create new sources of smaller consumer-based commercial hard money loans. However, only time can tell how long the P2P space will survive before it also shakes out. But for now, P2P lending has availed an outlet where consumers can source for small consumer hard money loans.

This page has a focus on Commercial hard money, Small Loans was shared by Aditi Bansal.

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