If you’re an investor looking for a new way to earn money, consider starting a commercial real estate investment business by using a hard money loan to finance it. Bankers understand that you may not yet have a lot of assets or meet the stringent requirements for a business loan when first launching a business. However, you can start a new revenue stream for yourself if you own any commercial real estate property.
What Is a Hard Money Loan?
To obtain a hard money loan, you must pledge the piece of real estate that you currently own as collateral. You receive funding from a direct lender. Since direct lenders do not have to adhere to numerous government regulations when approving loans, it is easier to obtain financing this way with what the industry refers to as a hard money loan. This also means that the lender cares much more about the potential of your property to generate income than it does about your business or personal credit.
A Hard Money Loan Can Help Grow Your Business
While this type of commercial real estate loan is attractive for new business owners, it isn’t limited to them. Established businesses can use them as a bridge loan to help a business grow profitable and financially stable from a bank’s perspective. This will make it easier to qualify for traditional business loans in the future. If desired, you can use the proceeds from the business loan to pay off the hard money loan since the latter typically comes with a higher interest rate.
High-Value Collateral Can Overcome Having No Credit or Poor Credit
It can get discouraging for new business owners to continually get denied for loans due to having insufficient credit or poor credit. The good news is that owning a valuable piece of collateral such as commercial real estate can help to make up for this.
Are you ready to learn more about hard money loans and other types of business financing? Contact Commercial Capital Partners today.