Private Money Commerical Loans
Private money loans are generally offered to borrowers with a good exit strategy to finance "quick need" real estate investment opportunities or other collateral backed commercial loans; they are funded by private investors as opposed to banks.
A private money loan might be an appropriate option if you do not have a high enough credit score to secure a loan from a bank. They are generally used as "bridge" loans between construction financing and long term loans; hard money loans are often used for construction because long term lenders may want finished and leased projects. Be aware that Private money lenders we are not regulated by the Federal Reserve or the Office of Thrift Supervision.
A Private Money loan is mainly based on the value of the property and typically you can get a loan from 55-65% up to 70% percent of the commercial properties collateral value. Land itself is often at a lower LTV, say 50%.
If you are on a tight schedule and looking for a quick loan process with minimum paperwork, private money loans are the way to go (almost the same as if you were working with cash). They have relatively high interest rates and costly fees compared to Institutional money.
Our Commercial Private Money Loan amounts range from $500k to $20 Million dollars. Terms vary but you can have very short terms from six months up to three years with a variety of upfront costs and an interest rate that is typically higher than conventional rates.
Therefore, the application process can be very different from a traditional loan from a bank. Whether you desire to purchase, refinance, or construct, we are your best source for financing.
We offer loans for any type of commercial real estate situation where a quick closing is needed. We know our markets and can get to deal closed while the bank is still asking questions.
Simple Private Money application process
Present a clear financial plan for your project. Many hard money lenders will fund 60 - 70%; you will be responsible for funding the additional 30 - 40% of the additional cost. If you have this cash on hand, that will increase your chances of being approved for the loan. If you do not have the money to cover the additional 30 - 40% of the value, then the lender might put a lien on another property that you own.
- Most lenders will prefer that you have 30 - 40% of the additional cost in hand rather than using another loan or a credit card to finance the difference.
Prepare additional documentation. Although most lenders are concerned with the value of the property you want to buy, they may also ask for your personal financial information. This might include documents such W-2s, paystubs, bank statements and other items in your credit history. You should be prepared to present all of this information to your lenders.