Looking For Hard Money Lenders?
A commercial hard money lender can be useful in providing loans and emergency funds. Those who are looking for additional funds on a tight budget, or when having the problem of being listed with bad credit, might want to consider the option of procuring money from them. Hard money are available from private lenders, and being personally given they often are quick to procure. Without the hoops and red tapes imposed on a typical financial institution, cash can be given out quickly.
What Is a Hard Money Lender?
A hard money lender is a last ditch effort in getting cash through legal means. In financial terms, there generally exist two terms for money lending; ‘hard’ and ‘soft’ cash. The differences is mainly on how difficult is the restrictions applied to obtain such money, because hard money are given by those who aren’t part of a large financial institutes or doesn’t meet a standard banking criteria. Hard money loans are therefore given out by private companies or rich moguls, land owners or other well-to-do people.
Hard Cash: Hard cash are loans given personally. They are ‘hard’ because of the high restrictions applied to such loans. These funds come from their own stash, so it makes sense for them to apply restrictions to protect their investments. It doesn’t mean that it is hard to get hard money loans, however. Those with bad credit ratings can ask for loans as well, given that these lenders are not limited by banking rules and financial laws.
Soft Cash: These are given by banking institutions. They are a more flexible compared to hard money loans due to them having the backing of a large financial institution to help them recover when loans are not paid, or having enough funding to take legal actions.
Commercial Hard Money Lenders
Commercial hard money lenders are hard money given by individuals on behalf of a company and other business entities. These companies often do not fulfill the standard banking criteria. However, they have enough land and other assets. Commercial money lenders are bound by law sometimes. Wrong steps taken by one side can often result in expensive and lengthy legal procedures that may result in losses to the company, even if they won. Hidden secrets can be unearthed and revealed, resulting in bad public image of said company. Public relations are therefore important and many companies went to great lengths to ensure a successful transaction.
Sometimes, money lenders are only interested in results, and will intentionally overlook matters such as bad credit ratings. This is why they are a good source of emergency funds. Mortgage refinancing can be amortized if the lenders had connections with mortgage companies.
Issues to Consider Before Getting Cash From Hard Money Lenders
‘All loan sharks are hard money lenders but not all hard money lenders are loan sharks,’
Reputability: Hard money lenders are not affiliated with reputable financial institutes. This means they can take some liberty off from certain regulations and laws.
Interest Rates: In exchange for fast cash, some money lenders may charge very high interest rates. Ensure that you divide and separate you earnings appropriately when payday arrives.
Pre-payment Penalty: A lender may penalize the loaner if the loaner pays off the loan earlier than as agreed on the contract. This may cut into the profits generated if the penalty is high enough.
Where to Find a Hard Money Lender?
Hard money lending is a profitable venture. The lender generates income based on either interest rates, service charges or both. Therefore, there are many entities that are willing to quickly loan their money to prospective land buyers who need fast cash to snap up estates and lands for sale.
Mortgage Companies: Get into contact with their agents. Prospective loaners may be able to obtain referrals and personal recommendations from these agents.
Real Estate Agencies: These people had extensive dealings and experience with land-related matters. Other than solving issues arising from that area, they may get you in contact with hard money lenders.
Online Money Lenders: With the explosive increase in internet-based financial transactions, many lenders are taking their business into the virtual world. Oftentimes they require a credit check because it is hard to meet in the real world to ensure the authencity and capability of the loaner.
There are many ways to get a loan, and the fastest is usually through commercial hard money lenders, even with bad credit rating signs plastered to some prospective loaners.