Do you Qualify for a Commercial Hard Money Loan? 3 Business Scenarios

    by Aditi Bansal

Updated on Wednesday, January 15, 2020

As an investor, you will need quick cash every once in a while to boost your business. You can access commercial hard money loans quickly and easily compared to conventional loans.

tags  #Hard money loan for real estate  #Speedy Financing #


Commercial hard money loan lenders use their own finances to invest in properties. However, in return, they ask for higher points or interest rates on the hard money loan. Most people opt to apply for commercial hard money loans as a last alternative after failing to secure a conventional loan to boost their investment. In case you have been unable to secure a traditional loan and aren’t sure whether a commercial hard money loan is an option for you, below are examples of three business scenarios where commercial hard money loans can be used.

Speedy Financing for Real Estate Investors

If you have already identified the real estate property you want to purchase and you have to quickly secure it, then you need to get financing quickly to speed up the closing process. Commercial hard money loan lenders can provide you with the funds you need quickly. Unlike conventional loans, you can be able to close quickly with a hard money loan. Conventional loans often require the submission of several documents. After you submit the required documents, they will go through several verification channels, and this process can take up to a month depending on some factors before the loan is approved. However, because a commercial hard money loan lender uses his or her money, there are fewer requirements for a loan to be approved. This also accelerates the decision-making process of the lender, and to quickly approve the commercial hard money loans application.

Small Business Owners

If you are planning to open a new business of your own, you may need a commercial hard money loan to boost your business. Both new and already established small businesses face one common risk of not getting enough funding. Small businesses are often high risk because there is no way to know whether it will succeed or fail. This risk makes it difficult to get conventional funding. Most conventional lending institutions choose to invest in businesses that have already proven to be successful or that have a high potential of becoming profitable. If you are in such a situation, a commercial hard money loan can provide you with enough finances to run your small business. Although you may work hard to get a positive return on investment, if it doesn’t generate the return you were anticipating and you default from repaying the loan, the investor can use the property to repay the loan.

Investors with a Low Credit Score

In case you are trying to purchase a property or to invest in a business, but you are unable to get enough finances because of a low credit score, a commercial hard money loan can solve your financial problem. Most people qualify for traditional loans based on their credit score. Therefore, credit scores are one of the many reasons why most people are denied conventional loans. In case you are planning to invest, but you have a low credit score, consider applying for a commercial hard money loan. Commercial hard money loans have less stringent requirements, and you can easily qualify for such loans compared to traditional loans. Keep in mind that a commercial hard money loan lender accepts all the risks involved in your investment and this will cost you more when repaying.

This page has a focus on Hard money loan for real estate, Speedy Financing was shared by Aditi Bansal.

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