Why a Hard Money Loan?
Hard Money and Bridge Loans are needed in today’s market. Many hard money borrowers cannot obtain financing elsewhere because their projects are too speculative or their credit is questionable, and this where short-term financing can assist these borrowers until they stabilize their project/property and it becomes bankable.
Hard money loans are funds, typically from a private lender, that are backed by the value of the property, not by the credit worthiness of the borrower. Traditional banks put more emphasis on a prospective borrower’s credit and a future development’s income projections. Most hard money lenders assume they could end up owning property if the borrower defaults.
All loans will be considered, and are based on exit strategy, value, and ability to demonstrate repayment of the loan. Though everything is on a case-by-case basis per today’s marketplace, hard money loans do have lower loan-to-value (LTV) ratios than traditional loans because the property itself is used as the only protection against default by the borrower. The loan-to-value for hard money is typically 50%-65%, and less for raw land. Hard money loans carry interest rates even higher than traditional subprime loans. Interest rates for hard money loans are 10% - 13%. These loans are Interest-Only and Non-Recourse with no Pre-Payment Penalty or Exit Fee. There is up to a 3-year term available on all hard money loans. Generally, these loans can close in 30-45 days, or less.
If you have a property or project that requires a fast closing, please contact us.