A hard money loan is an asset-based loan. This indicates that a borrower pledges tangible property as security in exchange for money. These deals frequently involve real estate investments and are comparable to short-term bridge loans. The loans are primarily used for quick access to cash and are also short- or immediate-term financings, typically lasting up to three years. For a commercial real estate investment, using a hard money loan rather than a conventional loan product has many advantages.
The following are the top advantages of hard money lending:
Hard Money Loans Are More Accessible
Obtaining a Florida commercial real estate loan is typically a protracted and difficult process that involves careful examination of the finances of both the property and the borrower. Even after closing, the conventional loan process can involve another protracted wait before funds are released, which can negatively affect the investor’s return on investment. Hard money loans, on the other hand, are frequently approved and disbursed within a few weeks. This can be extremely helpful for investments with more constrained timelines.
Hard Money Lending Provides More Flexibility
Private lenders are typically the ones who offer hard money loans, which makes it much simpler for investors to bargain for favorable terms. With conventional financing options, investors typically have very little room for negotiation, but with hard money financing, an investor may be able to modify some loan terms to better suit their needs. Hard money lenders are much more amenable to changing the repayment plan or lowering or eliminating some costs, such as the origination fee.
Hard money loans can be very helpful in challenging circumstances. Hard money financing can be the ideal solution for projects with short timelines because it offers quick fund disbursement and significantly less borrower scrutiny. Investors just need to be aware of the higher interest rates and fees and the shorter repayment period.
Monroe Funding Corp has been trusted by nearly 35,000 customers, making us #1 in Florida. Want to learn more about Florida commercial real estate loans? Get in touch with us by calling 954.419.3539 or visiting us online.