Hard Money Business Loans have traditionally been used heavily by real estate investors. These are where the RE Investor is trying to acquire a distressed property and flip it after renovation. The hard money lenders will offer quick funding but at a very high set of upfront fees and high interest rates. The RE Investor must be acquiring the property low enough to allow the investor to have a 40% to 60% loan to final value ratio.
Today with banks being very reluctant to lend to small business clients, many Entrepreneurs outside of the RE Investor field have taken a look at hard money business loans to solve their short term business capital needs. Your Business Mentor Ray has taken a look at the issues and challenges involved in using Hard Money Lenders to finance your small business.
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There are clearly some cases where the cost of getting a hard money loan is justified, however it is very risky for the small business owner, these hard money business loans are heavily secured and you run the risk of losing all your assets if the deal goes bad. But if you need a quick bridge loan to close a very attractive acquisition or need equipment and inventory to meet the needs of a new customer it may make business sense to use this source of financing.
As an alternative be sure to consider using accounts receivables factoring before you go the route of a hard money business loan. Factoring is much less expensive financing for your business and the risk to your your persoanl assets is very limited.
Below are several sources of additional information on the topic of Hard Money Business Loans.
Should You Ever Consider Hard Money Business Loans?
Should You Ever Consider Hard Money Business Loans? Before going further, we want to ensure that we operate with the same definition of hard money lending business loans and loans of money usually lasts are usually …
Commercial Hard Money Loans – 3 Business Situations
Compared to traditional bank business loans, commercial hard money loans will generally involve a higher interest rate (prevailing range of prime rate in addition to 4-8% for typical scenarios), higher fees and shorter-term …
Demand for small-business loans slows to trickle
Demand for small-business loans slows to trickle | The RepublicThe RepublicMike Herd, owner of Gable Integrated Services in Troy, Mich., said he’d like to take out a small-business loan so he’d have money to cover production costs of bigger orders as …
Hard Money Business Loan – The Facts About a Hard Money Business …
businessloans.richyoungster.com
One alternative that may be offered is a hard money business loan. In opposition to an unsecured small business loan, a hard money business loan is secured against collateral that you put up. It is usually in the form of …
What Is Hard Money Lending? | Hard Money Loan
Soft money loans are those with flexible payment schedule plans and borrower-friendly conditions; while hard money loans are usually those with relatively strict terms and payment schedule plans, and everything is totally up to the lender. Hard money lending is offered by both … Commercial lenders, on the other hand, are financing establishments that lend money as their business to people who wish to obtain a loan. It is usually real estate investors who need these …
Business Loan Financing Options: Public and Private Sources …
The Veterans Business Development Officers have representatives in local SBA offices. Types of private business loan financing include: equity loans, private money loans, and hard money loans. Small business investment …
Desperate for capital, small businesses turn to private lenders
Business owners turned down by banks are taking out ‘hard money’ loans, often at sky-high interest rates, business reporter Sharon Bernstein says. Read more at bit.ly
As the Los Angeles Times reporter discussed in the video above, getting financing for your small business by way of hard money business loans is possible, but risky. Traditional Commercial Banks and Angel Investors are driving small business owners to this source of funding, but please be careful of the risks and know that the costs of this business capital is very high.
Your Business Mentor Ray recommends accounts receivable financing options ahead of hard money business loans . Please Like and share this article and it sources with your friends on twitter and facebook.
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