Applying for a traditional bank loan can be draining and tiring due to the never-ending application processes. A great alternative to bank loans is hard money loans. They are well known for their flexible lending terms and speedy approvals. However, many people are wary of them due to various myths surrounding them.

This blog will debunk some of the most common misconceptions surrounding hard money loans.

You Won’t Receive The Entire Loan Amount

The most prevalent misconception regarding hard money loans is that you won’t get the whole amount you requested despite the approval. A private lender may determine that you don’t require as much funding as you believe or that financing the entire amount is too hazardous.

This isn’t true. Private lenders do not hold back any funds and give you the entire loan amount based on your needs.

Hard Money Loans Get Their Name From The Difficulty Level To Get Them Approved

You should never judge a book by its cover. Hard money loans may appear difficult to obtain, but they are surprisingly straightforward. All you need is a commercial property as collateral, and the loan is yours.

There are no other stringent standards to meet for hard money loan approvals. You might be wondering why they’re called hard money loans when the loan approval process is so simple.

The difficult circumstances under which a person opts for these loans, such as minimal cash equity, bad credit history, or quick financing, make these loans popular as hard money loans.

Private Money Lenders Want The Business Property You Held As Security

Private money lenders are rumored to be charging exorbitant interest rates to get hold of property taken as collateral. While the private money lending business does include a few bad apples, this does not apply to the vast majority.

The loan industry is built on trust. Borrowers have faith in lenders to offer them the best credit conditions, and lenders trust borrowers to repay their loans on time. If the lender betrays this valuable trust, it will take seconds for the lender’s reputation to shatter, and they’ll lose business.

They Have A Never-Ending List Of Approval Requirements

 

Many people feel that these loans have higher loan approval restrictions than traditional loans. That’s not the case. There are no such stringent standards that make it difficult for you to acquire a loan.

Banks have a long list of demands that grows each year, making loan approvals more difficult. Banks are wary of recent foreclosures, short sales, loan modifications, bankruptcies, and low credit ratings and will refuse to lend you money if anything is out of the ordinary.

Looking for a reliable hard money lender, look no further than Commercial Private Equity. We approve loan applications in less than 24 hours.

Contact us today for various hard money loans, including raw land, asset-based, and other types of commercial and industrial lending that is simple, quick, and cost-effective.

Undoubtedly, the rising inflation can cause many financial hurdles for businesses, and it’s no surprise that there was a twenty-six percent increase in commercial bankruptcies during the pandemic.

Many companies didn’t have a staunch financial plan and ended up in foreclosure. Getting your firm out of a foreclosure situation isn’t an easy task. This is why firms look for innovative strategies to get their finances back on track.

Continue reading to find out how to get out of a foreclosure.

Examine Your Finances To Complete Debt Payments

No company wants to be in a foreclosure situation. However, the commercial hardships in the US have pushed many businesses into a financial crisis. If you want your firm to manage its finances adequately, it’s time to examine your financial condition efficiently.

Your financial department should thoroughly check all your expenses to identify unnecessary expenditures. You can save money by using cost-effective measures and use the extra money to make debt payments.

Sell Your Assets To Make Timely Debt Payments

If you don’t see a reliable future for your firm, it’s better to sell off your assets to complete debt payments. You can sell your firm’s properties or vehicles to get rid of the crippling debt. Selling your commercial properties in the booming real estate market in the US can help you arrange the money you need for your debt payments.

Use Workout Loans To Restructure Your Debt Payments

Consider getting a workout loan if you don’t want to sell your assets to complete debt payments. And since banks don’t prefer to give workout loans, you can let private money lenders help you out.

We recommend hiring an experienced private asset-based lender who can analyze your financial condition and offer a relevant workout loan deal. With a workout loan, you can start repaying your loan with new terms that are in line with your financial situation.

Get Asset-Based Workout Loans At Minimal Interest Rates

Want to get out of foreclosure and manage your finances effectively? It’s time to visit Commercial Private Equity to get hard money workout loans. We’ve been helping firms struggling with finances for the past seventy-five years. Our asset-based workout loans help clients restructure their debt payments.

Besides workout loans, we offer multiple hard money specialized loans, including commercial, raw land, bridge, construction, and blanket loans. We’ve got a professional underwriting team who can pre-approve your loan within twenty-four hours.

So, what are you waiting for? Apply for a workout loan at Commercial Private Equity.

The private lending sector is revolutionizing the commercial real estate industry. Gone are the days when you’d have to waste your time in banks, waiting to complete the lengthy loan process with extensive requirements.

In 2022, quick financing is the way to get ahead of your competitors. If you want to kickstart any commercial project, you’ll have to join hands with a private lender. Keep reading this blog to find three unique facts about private hard money lenders in the US.

Private Lenders Don’t Ask For High Credit Scores

Unlike banks, private lenders don’t require a high business credit score. It’s no secret that in 2020 and 2021, business credit scores have gone through a downward trend, and many firms have struggled to acquire loans through conventional methods.

Amidst these circumstances, private lenders can help you out by providing loan deals to companies with average credit scores. Many reputed private money lenders in the US have created multiple loan programs to cater to clients with different credit scores.

Private Lenders Provide Quick Financing

2022 is a crucial year in the corporate world as many firms will look to make a comeback and stamp their authority in the market. If you want to create a better brand image, you’ll need to spend a lot of money. However, financing your commercial projects is never an easy task.

Luckily, private lenders can help you out! While banks make you wait for an eternity to get the loan application processed, private lenders can complete the whole process within a few days. Popular private lenders have financial teams to analyze your condition and pre-approve your loan application.

Private Lenders Have An Easy Application Process

Bank loans are often rejected because people don’t understand the rigorous application process and fill out the forms incorrectly. However, the private hard money process is simple and streamlined. Many private lenders assist clients individually in filling the loan application forms and guide them at every step of the process.

Private Lenders Can Help You Get Top-Notch Hard Money Loan Deals

Looking for a private money lender? Visit Commercial Private Equity to get top-of-the-line hard money loan deals with interest rates as low as ten percent. Our team has created a state-of-the-art loan program to help our clients get asset-based loan deals as per their requirements.

Our team conducts an efficient underwriting process and pre-approves your loan within twenty-four hours. We provide multiple specialized hard money loans such as commercial hard money, construction, raw land, bridge, workout, and blanket loans.

So, what are you waiting for? Apply for an asset-based loan at Commercial Private Equity.

If you’re considering asking for a loan for the first time, you’ll want to learn everything you can about the process, so you don’t make any errors and can connect with reliable and efficient lenders.

This blog will guide you on everything that will make your lending experience a smooth one.

Things You Need to Know Before Taking out A Loan

Before applying for a loan, lenders will ask you to provide proof of your earnings, credit history, and ratings to ensure you won’t default. Here are a few things you need to know before applying for a loan.

1. Score and History Of Credit

A good credit history and credit score show creditors that you will pay your bills on time. The better your credit, the more likely you can acquire the best conditions for your loan.

Hence, before applying for a loan, it’s a good idea to verify your credit score and report any mistakes that could lower your score and make your loan more likely to be denied.

2. Income

You’ll need to show proof of income with your application, as your take-home pay helps determine your ability to repay the loan.

You must include all of your sources of income, not just your primary ones, such as freelancing income, money from a second job, child support, and spouse’s income.

3. Monthly Debt Payments 

You should be aware of your monthly financial obligations as well. If your monthly income is $4,000, but you pay $3,500 toward your responsibilities each month, it’s clear that you won’t be able to pay off the new debt.

A loan application would probably require you to list particular obligations, such as your mortgage or rent payment, as well as any existing credit card or other debt payments.

4. Assets and Liabilities

Your net worth, or your assets minus your liabilities, may be considered by a potential lender. If a difficulty arises, your net worth will determine whether you will be able to repay the loan.

Calculating your net worth and predicting how it will change if you get the loan is an excellent method to stay on top of your finances.

When Can You Use A Hard Money Loan?

1. Purchasing a Distressed Property

Real estate investors frequently seek out properties that they find hard to finance with their own money. You’ll need cash or a loan from a private lender to buy them. In such scenarios, a hard money loan helps you seize a good opportunity as quickly as possible.

It functions as an alternative for cash. It enables you to purchase a property at a lesser cost and adds value to your property while allowing you to repay the loan later.

2. Fix-And-Flip

A fix and flip is a real estate investment strategy in which an investor purchases a property at a low price, renovates it, and then resells it for a profit. A decent deal on the property is the goal of any flip transaction.

It’s also critical to be aware of and capable of repairing the property’s flaws. Fixing basic property damages, fire damage, leaky roofs, and other necessary updates can enhance value and profit to a real estate investment. Traditional lending will not be able to fund such a property.

A hard money lender will supply you with the finances to purchase the property, perform the necessary modifications, and resell it for a profit.

3. Purchasing a Foreclosed Property

A foreclosure’s sole purpose is to recover the loan amount that the borrower is unable to repay. The person purchasing the property must have the necessary funds to participate in this process.

You can get a hard money loan to help you buy a foreclosed home. It’s a fantastic deal for you if you can purchase a property for $100,000 less than its worth and only have to borrow $15,000.

How To Boost Your Chances Of Getting Hard Money Loans Approved?

1. Boost Your Credit Rating

When it comes to getting your loans approved, your credit score is quite important. The higher your credit score, the more likely your loan application will be accepted. You must also ensure that your reports are error-free.

Incorrect credit limits, terminated accounts listed as open, and incorrect accounts are all examples of bad credit practices.

Whenever possible, try to pay more than the minimums to increase your credit usage ratio and payment history, both of which have an impact on your loan approvals.

2. Regain a Balanced Debt-To-Income Ratio

One of the smartest moves when applying for a loan is to include money received from a part-time job in your annual income. You might also start a side business to supplement your income or work for a promotion at your current job.

While you’re focusing on raising your income, you should equally be focusing on reducing your debts. You can get this by selling your liquid assets. Your debt-to-income ratio will improve if you increase your income while reducing your debt.

A lower percentage implies that you are in control of your current debt and are willing to take on more, resulting in your loan application being approved.

3. Don’t Ask For Extra Money

Make sure you’re not requesting too much money. Lenders may consider asking for more money than you require to be risky and suspicious.

You should first identify why you require a loan. After that, you should decide on a specific monetary quantity for your requirements and ask for that amount, nothing more.

Larger debts entail larger loan payments, which affects your ability to meet other financial obligations, putting a strain on your budget.

Looking for reliable private money lenders? Look no further than Commercial Private Equity. We’re leading hard money lenders specializing in bridge construction, asset-based, raw land, commercial hard money, and other specialized loans.

Apart from loans, we also provide commercial hard money loan consultation services to guide you on the best practices for borrowing and repaying loans.

Contact us for more information.