Saturday, 25 August 2012

Financing with Hard Money Loans

San Francisco hard money lenders
Financing with hard money loans is a great option for investors and businessmen. It is a fastest way to access capital for completing business transactions. This is in contrast with conventional bank loans. Traditional bank will give loans to borrowers after large verification process. Hard money loan is risky asset-based loan for a business. Hard money loans are mostly applied when company needs loan in emergency and unfortunately no other means of loan can be adopted. Only that time is suitable for hard money loan.

Hard money lenders are individuals or companies that have funds available for investment. To be a hard money lender, they have to be flexible and able to move quickly to take advantage of lending opportunities in the marketplace. When business is in such conditions in which your business cannot adopt any traditional loans then hard money loan is the way mostly adopted for small business. Hard money loans for small businesses are mostly taking in emergency conditions. There are many lenders which are ready to finance hard money loans, these lenders mostly are San Francisco hard money lenders and California hard money lenders.
How to Get Hard Money Loans

Hard money loans
Hard money loans not based on trust or reference to the borrower, it is based on the collateral which the borrower offers to the lender. The amount of loan depends upon the collateral given by the borrower to the lender. Credit score of the borrower doesn’t matter but the amount of collateral does matter a lot. If the amount of loan increases the ratio of property then borrower should arrange more collateral by adding his personal assets in property.

Loan to value Ratio

Entire value of collateral is not used, a loan to value ratio is calculated and according to it further dealing is continued. The loan to value ratio is basically the percentage of properties value. Loan to value ratio of hard money is calculated by dividing loan value / appraised value of property. As much the as the ration increase it decreases the chance of getting loan. Mostly lenders measure their risk by this ration. San Francisco hard money lenders also measure the risk by this approach.

Interest Rate

Interest rate on hard money is mostly higher than other traditional approaches because the risk involve in hard money loans are more than other traditional means. California hard money lenders mostly charge 12% to 29% interest on their hard money where as the small business has to pay 4% to 8% interest. The other terms on a hard money loan are also less favorable than on traditional loans.

Wednesday, 1 August 2012

Hard Money Commercial Mortgages: What You'll Need to Get Approved

San Francisco hard money lenders
There are many alternatives of traditional financing. One such alternative is hard money commercial mortgages. It is another financing option available to buyers. Hard money commercial mortgages are harder to get as compared to  traditional home mortgage. Hard money commercial mortgages are harder to obtain due to risk associated with it. Hard money lenders will take on buyers that regular lending institutions will not approve. They take the riskier business because your property becomes your collateral. A commercial mortgage is not the same as a residential mortgage. A commercial mortgage applies to commercial buildings or businesses. Business people take out commercial mortgages.

The U.S state California is popular for hard money lending business. California hard money lenders are known for professionalism services in hard money loans business. They finance their clients  in swear conditions when conventional banks refused to help. Lenders disburse the money on the basis of the value of property you are buying. They are never concerned about your credit rating. Even people with CCJs, arrears, bankruptcy etc are eligible for hard money loans. So, it is better to look for a hard money loan instead of a traditional loan when you need a comprehensive amount and are in urgency.

Hard money commercial mortgages are offered by private institutions so there are certain items a borrower need to ensure your approval. Firstly as a borrower you have a business proposal. You must have a complete detailed plan. The plan should address the project you are trying to fund. It should explain vision for the property. Give the lender some insight as to what you are trying to do.

California hard moneySecond thing is you have a complete financial analysis. The financial analysis should detail the budget on the project, financial projections, market trends, and equity. These items demonstrate to the hard money lender the viability of your investment property. Hard money lenders want to invest their money into a property that can guarantee to profitable turnover. You must do your research in selecting a commercial property. Make sure that the property you selected has shown great potential in being profitable. This will improve your chances of obtaining a hard money commercial loan.

At last I would suggest if someone need finances to complete business transactions he should apply for hard money lending. It would help him in solving his problems. It would also be helpful in achieving business goals and tragets.

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