If you own a commercial property, but either your company is losing money or your credit is poor, you can still easily obtain a commercial loan from a hard money lender.

Hard money lenders make the riskier commercial loans, the deals the banks won't touch. As a result, hard money commercial loans are more expensive than bank loans. Where a bank might finance a commercial property at 7.5% and one point, the typical hard money commercial lender will charge in the neighborhood of 11% to 16% and three to six points.

Hard money commercial lenders look primarily to the property as their source of repayment. If the borrower doesn't make his payments, the hard money lender will simply foreclose and sell the collateral; but no one really wants to own your commercial property.

(If you need less than $10 million, please feel free to contact us about your hard money commercial loan needs.)

As you shop for a commercial hard money loan, be sure to watch out for exit fees and prepayment penalties. An exit fee is a big fee that some hard money lenders charge when the loan is paid off, regardless of whether the loan is paid off early, on time, or late.

You should also watch out for large late fees on the balloon payment. Well in excess of 70% of the time, short term hard money loans are paid off late. Many hard money lenders try to tack on a huge late charge on a late balloon payment, sometimes as large as ten points!

Many hard money commercial lenders win business based on speed. It is sometimes possible to close a hard money deal in as short as ten days. This type of fast, short term, expensive financing (when compared to a bank loan) is known as a bridge loan.

Other hard money commercial lenders specialize in value-added deals. A value-added deal is where the developer buys an existing property and improves it with the proceeds of the loan. A developer might buy raw land and get the property up-zoned. He might buy an empty retail center, upgrade it, find tenants and install the new tenant improvements. Bridge loans are perfect for this situation because bridge loans rarely have prepayment penalties or lock-out clauses. When the developer is finished with his improvements, he can then either sell the property or refinance it to pull out his profit.

Commercial hard money lenders get their lendable funds from two different sources. One type syndicates a new group of private investors for each deal. The other type of hard money lenders,  have big mortgage funds, similar to mutual funds, already assembled. As a result, these hard money lenders are usually faster.

If you need a hard money commercial loan of less than $3 million, feel free to Request A Quote from us,

Click here for more information on Hard Money Loan Types.