What are Commercial Hard Money Loans?
Commercial Hard Money loans are a Capital Source offered by Private Lenders to investors who need financing fast. The criteria to qualify are more flexible compared to traditional financing with a higher interest rate in return. The major advantages of Commercial Hard Money Loans are speed and flexibility. If you are looking to purchase your next investment property and need financing that focuses on the asset – private lending might be for you. Private Lending can also be used for investors with challenging credit, limited income, or those who are looking for creative financing terms when purchasing real estate. Asset-based lending allows private hard money commercial lenders to consider creative real estate investment not typically considered in traditional financing.
What type of Real Estate you can buy with Commercial Loans?
Traditional financing in Commercial Real Estate requires extensive paperwork and financial underwriting. It is not unusual for a commercial loan to take 60 to 90 days in order to fund, since in addition to the underlying asset – the lender also underwrites you as well. In asset-based underwriting, we can provide you with financing in as fast as 10 days. We can assist with any type of real estate:
- Retail Centers
- Office Buildings
- Triple net and Single Tenant Retail
- Industrial Buildings
- Properties with Marijuana Tenants
- Gas Stations
Common Questions about Commercial Hard Money Loans
Here are the most frequent questions we get when it comes to hard money loans for commercial real estate:
Q: What can I do to increase my chances to qualify?
A: Make sure you have all of your paperwork ready – any underwriter will probably ask you questions about the property and about your experience as an investor. This is the part that usually takes the most time, so be prepared ahead of time. Read Here for more information on what documents will generally be asked for. Click HERE>
Q: Are the rates going to be really high?
A: Hard money rates are higher than traditional bank loans. Since they are riskier, done faster, and require less underwriting, the rate is higher. Typically hard money loans will be 2-5% higher than standard interest rates. Example: Standard Interest Rate + 2
Q: Why should investors take a high-interest loans if banks give lower interest rates?
A: Banks take a long time to approve loans, and they often apply very rigid funding criteria to deals. So if you have a special situation or circumstances, you may be out of luck. Hard money loans are also perfect for buyers who want to close a deal quick, and can’t wait 45 days for a bank approval. Hard money is not for everyone, but there are investors that are able to buy property not possible otherwise.
Q: Can I qualify if I have bad credit?
A: Yes. Hard money loans for Commercial Real Estate is focused on asset-based underwriting. This means that your credit score is less important than the strength of the property you are buying. Your experience is still important, and a good credit score helps a lot – but burrowers with bad credit qualify for hard money loans all the time. A Fair Credit for most Commercial Hard Money Loans starts around 640.
How can I qualify for a Commercial Hard Money Loan?
The process is simple and straight forward to get a commercial hard money loan:
- Find a lender that will take a look at your deal. Gold Bridge Capital Solutions can help. Book a call here >
- Pre-qualify over the phone and provide basic deal details via an application. You can start your Application Here>
- Provide paperwork to verify value and income of the commercial property
- Finalize terms of the commercial loan and pay 3rd party costs.
What are the terms of a typical Private Commercial Loan?
Commercial Hard Money Loans vary from property to property and different burrowers. Every property is examined on a case by case basis by our experienced underwriters and real estate professionals. Loan terms that fit a single tenant restaurant off a busy freeway are going to be different than financing for an office building in the middle of downtown Los Angeles. Generally speaking, a typical lender can expect the following terms:
- Interest rate – starting at 7%
- Term – Starting from 6+ months (shorter bridge loans are available)
- Origination and fees – 2 points and up – fees vary by property and loan parameters
- Interest only
- LTV – Loan to value – up to 80% (Sometimes higher depending on the property)
- Funding as fast as 7 days
Can I get a hard money loan with bad credit?
Yes. Individuals with bad credit can qualify for Commercial Hard Money Loans because we use asset-based underwriting to qualify our clients. Unlike traditional loans from banks – private lending focuses on the property, not the burrower. Applicants with bad credit, rejected by traditional lenders, can use hard money loans to purchase commercial property if the deal is solid.
Think you need a Hard Money Loan? Contact Us Today to discuss your options.
Gold Bridge Capital Solutions
Phone: 916-236-5075 or 855-501-8725
Book a Call or Visit at the Office: Click Here>