How to Use Hard Money Loans
Do you need flexible financing for your small business? Hard money loans are a popular way to quickly receive a working capital boost that can be used for any business need. Learn more about this dynamic option today to discover whether a hard money loan is right for you.
A hard money loan uses collateral to ensure repayment. While this means you’ll need to offer real estate, equipment or other assets as backing for your loan, you’ll avoid a number of disadvantages that typically come with business financing. First, you’ll avoid a credit check. Most loans require a high credit score for approval, which may be a roadblock for many small businesses. Next, a hard money loan allows rapid approval with minimal paperwork.
Most asset-backed loans are short term in nature. This means that you’ll be expected to repay your entire hard money loan in a few months or a few years. Unlike a conventional mortgage or business loan, you won’t have 10 or 15 years to make payments.
However, few loan options can compare to the speed of processing and the ultimate flexibility of hard money loans. You can receive funding in weeks or even days, rather than months. After appraising your asset, your lender will offer a maximum loan amount, interest rate and loan term. If you accept, you’ll receive money quickly to use however you wish.
From making payroll and avoiding late payments on other debts to investing in marketing and real estate, you’ll enjoy endless spending options for your hard money loan. Just like income, you’re in complete control of your financing with asset-based financing. Quickly grab up a hot investment opportunity, land a large client or launch a new product line to dramatically accelerate your business growth with a hard money loan.
You’ll typically pay higher interest rates with a hard money loan compared to a long-term business loan. Fast approval and generous flexibility come at a price. Some hard money mortgages may allow you to access financing with a low credit score, but aren’t flexible in terms of spending and come with more restrictions than a conventional mortgage.
Compare your financing options today to determine whether hard money loans are right for your business. Whether you’re struggling to raise your credit score or frustrating with delayed loan processing times, a hard money loan can be the welcomed change you need to take your business to the next level.