HARD MONEY

If you are new to commercial financing you will come across the term, “Hard Money”.  So, what is hard money and does it have application for you?  Hard money is used in commercial financing (residential financing, too) as interim or bridge financing for projects that may have difficulty getting funded through conventional means due to credit issues or a conventional loan may take too long to obtain (30 to 90 days).Hard money, as its name implies, is more expensive (rates range from 9-1/2% to 16% or higher); with points taken out of the loan proceeds, ranging from 1% to 8%; short term (6 months to 36 months).  However, the advantage of using hard money is speed (3 days to 30 days to funding), easy qualifying, low documentation; and, typically, interest only.  Moreover, most hard money lenders are equity lenders, as opposed to credit lenders.  That is, they are more concerned about the amount of equity in the project, than what your credit score is.