Commercial hard money is a loan issued to a business by another business. Collateral can take the form of a commercial property or residential investment property. As a means of receiving additional collateral for the lender a blanket mortgage can occur in which the loan is secured against a residence in conjunction with a business property. Sources of asset based commercial hard money loans are private individuals, mortgage companies, federal banks, and SBA lenders. The lenders have varying procedures. For example, a private individual might be unwilling to work out a plan of a matter of procedure in the case the loan was to become delinquent where a bank might. Penalty and application fees differ as well.
Commercial hard money lending does not meet the standard banking guidelines. As a result the rates are generally much higher than others. The industry standard range is 11-16% with borrowers typically paying back between 3 and 6 percent of the loan amount. The property value is a conservative amount which is determined by the lender. Generally, it will be at a rate which would allow the property to sell within 30 days.
Most of the hard money lending is done by private investment groups and finance companies. Very few banks will want to issue a hard money loan. Because the financial background of the recipient is ignored, it can be very useful for those who do not qualify for standard bank loans. For more information regarding, commercial hard money call Cash Flow Specialists, Inc. at 1-800-669-2700.