Hard money commercial loans are an alternative when conventional bank loans are not an option for the borrower due to the need for faster funding or when a conventional lender has rejected the borrower’s loan request.
Commercial bank loans often take 3-4 months and longer to fund commercial loans, while hard money commercial loans can take only weeks.
Banks may reject a borrower’s request for various reasons including low credit scores, insufficient income or an inability to provide documentation such as tax returns or other financial statements. Commercial hard money lenders focus primarily on the value of the commercial property being used as collateral for the loan and are able to overlook many issues if the borrower has sufficient equity in the property.
Other reasons a bank may deny a borrower’s commercial loan request include liens or judgements existing on the property, borrower is attempting to restructure their existing loan and avoid foreclosure, the borrower is a foreign national, or if the loan request requires some creativity that stringent bank policies are not able to accommodate.
Commercial hard money loans are also referred to as “no-doc loans”, private money loans or commercial bridge loans.