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Hard
or Private Money – Hard or private money loans are generally
used for borrowers who can’t qualify for traditional bank
financing due to bankruptcy, credit or other financial
issues or for properties on which conventional lenders won’t
lend due to condition, location or environmental concerns.
Consequently, hard or private money loans are more expensive
than traditional loans with pricing starting at 11% and 3
points. Additionally, they are generally short term in
nature.
Example:
A borrower with a bankruptcy within the last twelve months
is in escrow to purchase an apartment building in order to
renovate it, increase rents and then sell for a profit. Due
to their bankruptcy and poor credit history a bank will not
lend them the money needed to purchase the building. In
order to finance the project they turn to a hard money
lender.
If you
require additional information, or would like to speak
to one of our commercial financing specialists, please call
us at 888.488.3807 or
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