People often think getting hard money is not an easy task. However, hard money is normally much easier to qualify for than expected. Different from home loans, hard money loans for business purposes is known as commercial hard money and it is used for commercial properties or for investment residential properties. That is why it is important to properly research your home or commercial property loans when you need them.
A hard money loan is not necessarily based on credit. The collateral used for this type of loan is the property. So qualifying is weighted heavily on the quality of the property. This money is normally loaned by investors instead of banks. One of the big differences between banks and investors is that investors have in mind the amount of money needed to make a deal worthwhile. Normally, the investor that gives a hard money loan is interested in a fixed rate of return with good collateral, rather than credit scores and tax returns of a borrower.
Commercial hard money loans are greatly used when a commercial property is in distress. Unlike home loans, hard money loans rely on the potential sales price of a piece of the commercial real estate. The potential investor considering lending the money is not going to look at the appraised current value of the property alone They will also be looking at the After Repaired Value of the property.
So, get out of your misconception that getting hard money is too hard. It is fairly proven hard money loans are easy to get if there is a good chance of profit for the investor. For the business, their benefit is based on doing what is necessary to keep the commercial property and paying off the loan. Hopefully, by paying off the loan timely, they are positioned for continued success.