Bridge Loans
A hard money loan is tied to a specific property or asset, offering unique flexibility for borrowers. The loans don’t typically require a lengthy approval process, since the building or equipment involved serves as collateral. Hard money loans are best-suited to funding specific real estate deals when traditional financing isn’t an option.
Overview
If a company is looking to purchase real estate, time isn’t always a luxury the company can afford. Since real estate can be such a competitive industry, businesses can’t always wait 60 or 90 days for approval with a traditional loan. If the company doesn’t have a stellar credit history or can’t make a substantial down payment, a traditional loan application will likely be denied.
Hard money lenders can be much more flexible than most banks. They normally operate without the restrictions banks need to adhere to. They also look at the value of the property itself, not the borrower’s credit score. So, the approval process is much faster, sometimes taking as little as a few days.
During the loan term, the borrower only has to make interest payments. Once the term expires, the borrower must submit a balloon payment for the remaining balance. Because of this loan structure, hard money is best-suited for deals where the borrower is waiting for money to come in from another source. A perfect example would be purchasing a new property while waiting for an old building to sell.
The benefit of a hard money loan is that the borrower can pay it off as soon as possible. A notable disadvantage, however, is that the interest rates are much higher than traditional loans.
Loan Highlights
- The loan is tied to the property or equipment itself, not the borrower’s credit history.
- Financing can be much faster, often closing in a few days.
- Loan payments are interest-only, with a balloon payment at the end.
- Interest rates are much higher than traditional loans.
- Hard money is usually short-term, often one year or less.
- Borrowers can receive up to 80% Loan to Value!
Pros
- It’s easier for borrowers to get approved.
- Financing is much faster and more flexible.
- No down payment required to get approved.
- Ideal for companies with a low credit score.
- No prepayment penalties.
Cons
- Interest rates are high.
- Hard money loans only work when the business is waiting for other funds to come through.
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Begin your path to funding with a simple, informational application.
Contact Info
Address: 5340 S Verde, Mesa AZ 85212
Phone: 623-230-7528
Email: Contact@revitalcap.com