Why Small Commercial Hard Money Loans are More Difficult to Get

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.

last updated Friday, April 11, 2025
#Commercial hard money #Small Loans

by John Burson

Why Small Commercial Hard Money Loans are More Difficult to Get

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The main reason why small hard money loans are difficult to acquire is that 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 discussing your small-sized commercial hard money loans, which limits the available small loans in the market.

Another primary reason small commercial hard money loans are difficult to get compared to large commercial hard money loans is that 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 loan lenders have 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 recent years that can lend finances, especially those 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 shakes out. But for now, P2P lending has provided an outlet where consumers can source hard money loans for small consumer loans.