Commercial Hard Money Loan: A Critical, Unbiased Critique

A Commercial Hard Money Loan isn't for everyone. But it could be a viable solution for someone that can't get an everyday traditional Real Estate Loan. Of course with this type of loan Real Estate is always the collateral, with no exceptions. If for some reason the buyer defaults on the payments, the bank can repossess the property in due course of course, no pun intended.

The basic rendering of the various types of Retail Loans can also be defined as Sub-Prime Lending, Near Prime, B-Paper or Second Chance lending options.

So with emphasis would someone take out a Commercial Hard Money Loan verses a standard Retail Loan? It's because there are determining factors such as Below Par Credit Score, Enterprise History, conclusive prevalent Income Level that would keep back someone from getting prime money financing or the best rates, so the defaulter in these cases will settle for what they can get.

Some companies have a small amount they will authorize you when helping you obtain a Retail Hard Money Loan. The companies we have researched start out at $300,000 and go up into the millions for Retail Real Estate Properties.

There are also what they refer to as Mezzanine Loans which is a an accommodation that's paid back subsequent to the sale or refinance of the Retail Property. It's possible for a lender to secure a portion of the proceeds upon sale of the Hard Loan debt. These loans tend to have suitable structures such as good debt and equity ratios.

There's also a Financial Loan called a Hard Money Bridge Loan. These types of Money Financing solutions are usually temporary until a more permanent solution comes into play. These are used when time is of the essense, when a business move needs to be made quickly to acquire a property. There are no upper limits on this type of loan, and the qualification requirements usually remain the same.

There are also Hard Money Construction Loans, which is another Money Financing option that can be used for modest home projects to larger Retail Property projects such as the development of a strip mall or tract home development project. In most cases for construction projects there is a reserve account setup to make sure that money is allocated properly as the project keeps moving forward.

A Commercial Hard Money Loan is typically used in both Urban & Suburban areas. The current Prime Rates are from 11 - 16% verses the 6-7% for a standard loan. Usually all associated Points & Fees are included in the an accommodation and payments from these are dispursed upon closing the an accommodation. Also note these are Short Term Real Estate Loans that are usually given from 1-3 years.

There are a few other types of Commercial Hard Money Loans but these are the most common. Another thing to watch out for is the possibility of Predatory Lending that goes on in this part of the Real Estate Industry. I've personally heard of attempts to charge upwards of 26% myself, and have heard rumors through others of even higher rates than this. For the right project this type of loan can be outstanding, but as always, please do your research to avoid getting burned later.

Let Brian Garvin & Jeff West teach you More about Commercial Real Estate Loans at http://www.commercialrealestateloansnow.com