Commercial Hard Money Loans

Working capital and bridge loans are a common term used in the business world that deals with getting financed in order to make it from one point to another. Commercial hard money loans are basically bridge loans that give a business some working capital. Most businesses require working capital to fund their activities that make them money. In other words, most businesses spend money to make money. If a business is low on working capital, they will use a commercial hard money loan in order to finance their business ventures. This type of loan is considered a short term loan, and they come in many different varieties.

Businesses that need a short term loan will not use traditional long term loans with a fixed rate. In fact, a business will save on interest when they use a commercial hard money loan over a traditional long term loan. The reason why a business will save on interest with a commercial hard money loan is because the loan is only used for a short period of time. Commercial hard money loans are typically paid back relatively fast, which helps a business avoid paying interest rates on a loan over a long period of time.

Not only are commercial hard money loans a necessity, they are economically intelligent for a business to use. These types of loans are also used by businesses that are taking advantage of certain opportunities that traditional banks will not finance. For example, a company will use a commercial hard money loan for opportunities like real estate development. Other commercial opportunities may present themselves that a traditional lender will not recognize as well. Commercial hard money loans also help business expand, which is an absolute necessity in order to remain viable in a highly competitive environment.

A great example of a commercial hard money loan is the use of these loans to finish a development project. If a company is working on developing property and are almost finished with the project, they can use a commercial hard money loan in order to pay off their current lender and finish the project. Commercial hard money loans can only be used for commercial property, so if the developer is working on residential property, they will not be able to use this loan. However, there are other hard money loans that residential developers have access to that basically work the same as commercial hard money loans.

Commercial property owners and commercial property developers can also use this type of hard money loan to avoid foreclosure. In fact, even if the commercial property is currently going through foreclosure proceedings, the owner has the option to use a commercial hard money loan in order to avoid the foreclosure from continuing. The property will be used as collateral for a hard money loan. It’s almost like refinance the property with another lender before the current lender forecloses. The lender who is offering the commercial property loan will purchase the property from the owner for up to 65% of the value.

Many commercial property owners will also use these types of hard money loans for temporary refinancing purposes. Most commercial property is in limbo when an owner is trying to sell the property or lease the commercial property. A commercial hard money loan can be used to fill the gap in between commercial property transition periods. More information about commercial hard money loans can be found easily online. In fact, individuals will have more options with this type of hard money loan if they shop online and compare rates between lenders. The current economic conditions that developers are dealing with are creating a storm of new commercial hard money loans with fairly low rates.