The Value of Commercial Lenders
Commercial hard money lenders can be great for investors who need to finance commercial real estate transactions. These lenders differ from banks in that they provide capital based almost solely on the value of the collateral property, as well as the borrower’s real ability to pay back the loan. So unlike a bank, usually the credit history of the borrower is almost irrelevant.
Another great thing about hard money lenders is that they can grant funding usually much quicker than traditional banks do. With a bank you could have to wait thirty days or more but commercial hard lenders can often do it in less than two weeks, and sometimes in as little as three days.
Commercial hard money lenders offer a very valuable service to investors and so they may cost more to borrow from. The interest rates do tend to be significantly higher, ranging from ten percent to twenty percent or higher. These higher rates are necessary to compensate the lender for the higher risk he or she will be taking on with loans of these type.
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