For investors and business owners, getting the funding they need to expand operations or get involved in the development of property can take time and effort. Hard money loans for investors are one of many ways for commercial borrowers to obtain the financing they need. Here are some of the people who might benefit from one of these loans.
- Property Flippers
- Borrowers With Poor Credit But Substantial Equity
- Small Businesses
- Property Investors
Learn more about the pros and cons of a hard money loan.
What Is A Hard Money Loan?
These loans are considered asset-based financing where an investor or business owner offers collateral to receive this funding. This collateral includes the following options.
- Investment Properties
- Retirement Account
- Residential Properties
Hard money lenders will typically accept these types of collateral and offer short-term and immediate-term financing.
Hard Money Loan Advantages
Here are the advantages of these types of loans.
- Immediate Access To Funds
- Fast Turnaround
- No Credit History Check
- Flexible Term Limits & Repayment Schedules
Cons Of Hard Money Loans
Cons of a hard money loan include higher interest rates and larger down payments. Lenders require higher rates to offset the risks of giving out the funding. Regarding the down payment, the requirements vary by lender, as they may range from 25% to 30%. This financing option usually has a 1 to 3-year repayment schedule.
Who Should Get Hard Money Loans?
A borrower should understand whether they have the funding to commit to repayments. If they miss payments, they may lose the property that was placed up for collateral. Some lenders, but not all, may report missed payments or defaulted loans to credit reporting agencies. So you should speak with the lenders and fully understand their specific terms.
Ideal Hard Money Loan Projects
This type of funding is good for property acquisitions with short closing periods, as you can get the money immediately for the property without waiting several months for a traditional loan. You may also use it as gap financing to prevent a default or foreclosure on a property.
Another time when these financial borrowing options are good is when you want to cash out on the property’s equity. Borrowers may use the money for other purposes besides performing property improvements.
Financial Options At NV Capital Corporation
Here at NV Capital Corporation, we offer a range of residential and commercial loan options for people in Las Vegas, Nevada. As the top real estate lender in the industry, we help investors and commercial businesses with their financing needs.
Whether you need to close on your next property quickly or expand business operations, NV Capital Corporation is here to assist you. Contact us to learn more.