There are lots of challenges that come alongside running your own commercial real estate business, and funding is definitely one of the most important. However, finding viable solutions that are actually right for you isn’t always easy, especially if your business is brand new or still growing. A hard money loan may be just the solution you’re looking for.
What Is a Hard Money Loan?
When you’re still building or establishing your business, it can be tough to qualify for a traditional bank loan. Most banks will want to see hard proof that your business is either already successful or likely will be soon before they’ll take a chance on you. A hard money loan, on the other hand, allows you to leverage assets you already have, including any commercial properties you already own and turn them into convenient funding that can help you reach your goals.
What Are the Benefits of a Hard Money Loan?
The increased likelihood of getting approved for funding in the first place is only one of the perks a hard money loan brings to the table. The approval process is really quick, especially in comparison to the alternatives, so it’s a great solution when you need speedy access to your funds. Since the value of your collateral can be made available as a line of credit, you enjoy a lot of flexibility as far as how your funds can be used as well. Additional potential perks for commercial real estate professionals in particular include:
- Being able to make stronger offers on properties you’re interested in, as your lender is less likely to pull funding or otherwise make it hard to finalize a deal.
- Ability to act quickly when presented with new opportunities by reinvesting your existing equity.
- Better ability offer sellers additional motivation to sell to you, like a short escrow and a speedier close.
You don’t have to worry as much about credit issues or less than desirable blips in your long-term income history either.
Growing a Successful Business
Commercial real estate is without a doubt a wonderful industry to be involved in, but it takes time, patience, and money to really get a new business off the ground. A hard money loan can open the door to more different options than would be available to you otherwise. You’ll be able to apply your funds when and how you want to as well, so it’s well worth exploring the possibilities.
