What do you know about hard money lending? Do you have the facts straight?
Truth is, very few people, including businesses and borrowers, have the facts straight when it comes to hard money loans. Without this awareness, many misconceptions are floating around out there about businesses that offer and receive these loan types.
MYTH: Borrowers seek hard money loans in moments of crisis.
This is not the case. Individuals that seek hard money loans are by and large successful, solid entrepreneurs or businesses that require quick funding to finance a special opportunity (usually with a quick funding date) that more rigid, institutional lenders cannot efficiently and swiftly provide. The hard money method is a more convenient path in these impromptu situations because private lenders can deliver funding fast and be more flexible in structuring transactions. Asset-based lenders, like Bankers South’s Transitional Lending, review the collateral as the ultimate source of repayment rather than the borrower’s competence (income, expenses, credit history, etc.). As a result, private lenders make it easier for self-employed individuals and businesses without an established track record and borrowers without an immaculate credit history to get the funding they need when they need it.
MYTH: Hard Money is too high-priced.
Sure, hard money is generally more costly than funding options from traditional lenders, i.e. banks. However, in many cases, going with a hard money lender will actually be less costly for the borrower. For example, say a borrower is working with a traditional lender that won’t provide secondary financing. Say that borrower is without the equity the bank requires without secondary financing. This would mean that said borrower would need to bring in an equity partner – a more costly option than going with the alternative option: Going with a hard money loan lender.
Through our Traditional Lending Program, we offer non-conventional asset-based loans, i.e. “hard money” loans, based on collateral. These loans, as mentioned, can be used for a variety of purposes. Some of our clients have used our Transitional Lending Program to fund new real estate projects, pay off loans, or take advantage of an opportunity quickly with a bridge loan. We understand that a large amount of our borrowers are solid, successful individuals or businesses that are in a situation, or are presented with an opportunity, that does not fit easily into the rigid structure of institutional lending. That’s where we come in, offering you real salutations when special situations arise.