If you have a dream you are trying to launch but can’t get a traditional bank loan, you can turn to hard money lenders. Simply put, a hard money lender is a person or company that has money to lend. It could be a friend, neighbor, colleague or associate. There are even lending companies that specialize in these kinds of loans.
A hard money loan can get you out of a pinch—and fast!
Hard money loans are ideal for
HOUSE FLIPS — buying cheap real estate, fixing it up, then selling it within a year.
LAND LOANS — one of the hardest loans to secure through traditional loans.
CREDIT ISSUES — if there’s trouble in this area, a hard money lender will still help you: Loan approvals are not based on your credit score.
QUICK ACTION — hard money lenders cut through red tape. If you need to act quickly before the opportunity is gone, a hard money loan could help you.
How Does It Work?
Since it’s a non-traditional loan, the hard money lender has a lot of risk in their investment without securing a repayment plan. There are a couple of ways hard money lenders set up their terms.
- Asset-Based*
The borrower must have a home or other such collateral that can be repossessed by the hard money lender if payment arrangements and terms are not met.
- Percentage-Based
No asset needed here, but you must share a percentage of your future earnings. These hard money lenders usually deduct a percentage of the business’ credit card transactions.
Hard Money Lenders Can Grow Your Business
These types of loans have a few perks. If a bank turned you down because you have little collateral or revenue from your business, a hard money loan might be what you need. They are also easy to apply for and you usually receive your lump sum amount in as little as a few days after applying. Hard money lenders that are percentage-based do not require your sales history.
All of these benefits can help you grow your business and are especially beneficial for startups.
Don’t Go to Just Anybody!
If you’re in the market for a hard money loan, Red Door Funding is a hard money lender that can help you succeed. Give them a call at 832-539-1099 or click here to find out more about the services they offer. The credit application, forms, and FAQ section can all be viewed with a few clicks.
*Most desirable; Percentage-based hard money loans can take a high percentage out of your everyday earnings until the loan is paid in full.