A hard money loan is typically secured using real estate. This begs the question, “Is it possible to secure a hard money loan without the use of real estate?” There is no definitive yes or no to the question as it will depend on several circumstances.

A fundamental way to sway an investor to provide a hard money loan is a solid foundation showing the prospective borrower can repay the loan prior to the purchase of a property. While hard money loan investors may examine the borrower’s finances to a certain degree, they aren’t evaluated with a fine-tooth comb the way commercial banks tend to do. However, a borrower requesting a hard money loan in advance of purchasing property means there may be a greater level of financial scrutiny as there is no real estate equity the hard money lender or investor can use as equity.

It’s important to understand that hard money loans are not meant to replace personal loans. In such aforementioned scenarios, it’s assumed that the borrower is a commercial entity with current commercial real estate or to own the same. Borrowers need to be aware that hard money loans are used for short term needs versus a consumer loan or mortgage, with repayment periods of about ten years or less. Interest rates will be higher than commercial bank loans due to the greater risk.

This update is by hard money lending Miami company Monroe Funding Corporation, a direct equity lender serving clients throughout Central and South Florida. We specialize in first mortgages on non-owner occupied residential and commercial property investments as well as real estate loan options. Our fast and flexible loan programs get you to the closing table quickly and professionally. For more information on hard money lending FL or hard money loans Miami, please call 954-816-0388 or fill out our application.