By definition, a hard money loan is a very specific type of loan. Hard Money revolves around asset-based loan financing. The borrower receives funds secured by the value of their real estate. Hard money loans will typically be issued under private investors or companies (such as ourselves), as opposed to banks. Because of this, the interest rates of hard money will generally be higher than more conventional commercial or residential property loans. That is because the risk is higher than conventional real estate loans.
Most hard money loans are used for short-term projects. They typically last from a few months to no more than a couple years. The criteria reviewed when considering a good candidate for a hard money loan varies largely by the lenders. However, most hard money lenders primarily qualify this type of loan based on the value of the real estate being secured. The value of the property is the primary guideline for loan evaluation.
Hard money loans may be sought by property flippers who plan to renovate and resell the real estate. The higher cost of a hard money loan is offset by the fact that the borrower intends to pay off the loan relatively quickly.
The main reason is the ability of the hard money lender to fund the loan quickly. In most situations, hard money loans can be funded within a week. Compare that to the 30 – 45 days it takes to get a bank loan funded.
The ability to obtain funding at a much faster rate than a bank loan is a significant advantage for a real estate investor. Especially when the real estate investor is trying to acquire a property with many competing bids, a quick close with a hard money loan will get a seller’s attention and set their offer apart from the rest of the buyers offering slow conventional financing. A borrower may choose to use a hard money loan if they have been rejected by the banks for income that cannot be verified, foreclosures, or credit issues. Hard money lenders are able to look past these issues as long the loan be repaid, and the borrower has enough equity invested in the property.
When you have a good deal, you need to move fast. We pride ourselves on our ability to consistently deliver on time because we understand time is money!
Borrowers can easily receive liquid funds within days with no proof of income. This fast option is for real estate investors looking to take equity from an existing investment property to reinvest funds elsewhere.
Bridge Loans are designed to “bridge the gap” between selling a property and purchasing a new one. Investors use this cash as a down payment on another property or other investment purposes.
If your probate/trust is in the process of being completed and funds are needed, to complete the transaction, Equity Based Capital may be able to help.
Where Equity Means More Than Credit.
Equity Based Capital is a direct hard money lender based in Branford, CT. With more than 30 years’ experience in equity-based lending, EBC specializes in financing for individuals and companies whose needs are not fully met by traditional banks. Loan approvals have emphasis on EQUITY not credit and income documentation.
Achieving the best returns possible.