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Learn the Buzz Behind the Commercial Hard Money LoansThe basic explanation of the various cases of Commercial Loans can also be defined as Sub-Prime Lending, Near Prime, B-Paper or Second Chance lending options. So affirmatively would someone take out a Commercial Hard Money Loans verses a standard Commercial Loan? It's because there are determining factors such as Middling Credit Score, Business Stability, evident actual Income Level that would constrain someone from getting old-school money financing or best rates, so the defaulter in these cases will take for what they can get. Some companies have a lowest amount they will authorize you when helping you obtain a Commercial Hard Money Loans. The companies we have researched start out at $300,000 and go up into the millions for Commercial Real Estate Properties. There are also what they term Mezzanine Loans which is a an accommodation that's paid back after the disposal or refinance of the Commercial Property. It's possible for a lender to secure a portion of the proceeds upon sale of the Hard Loan debt. These loans tend to have suitable structures such as good debt and equity ratios. There's also a Financial Loan called a Hard Money Bridge Loan. These types of Money Financing solutions are usually temporary until a more permanent solution comes into play. These are used when time is of the essense, when a business move needs to be made quickly to acquire a property. There are no upper limits on this type of loan, and the qualification requirements usually remain the same. There are also Hard Money Construction Loans, which is another distinctive Money Financing alternative that can be used for small home projects to larger Commercial Property projects such as the development of a strip mall or tract home development project. In most cases for construction projects there is a reserve account setup to make sure that money is allocated properly as the project keeps moving forward. A Commercial Hard Money Loan is typically used in both Urban & Suburban areas. The current Prime Rates are from 11 - 16% verses the 6-7% for a standard loan. Usually all associated Points & Fees are included in the an accommodation and payments from these are dispursed upon closing the an accommodation. Also note these are Short Term Real Estate Loans that are usually given from 1-3 years. What we've covered in this article so far are the most common types of Commercial Hard Money Loans. I also want to make you aware of Predatory Lending practices. You can spot a Predatory Lender simply by the interest rate they try to charge. 11-16% is standard for a high risk loan, but when you start hearing rates 19% and above, be careful. I've heard of a case where it was 26%, and unconfirmed rumors from associates tell me of cases even higher. Do your Due Diligence before you apply. |
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