Hard money loans have certain characteristics that make them suitable for investors and businesses. They are flexible and are offered by individuals, private lenders, and some financial institutions. One advantage is that they typically take a short time to process. In some cases, it can take as little as a week to get approved. With traditional lending, you will need to have a satisfactory credit score, provide tax returns, and the lender may need to appraise the property in question. All these requirements only lengthen the process.
Quick approvals are one of the reasons small businesses and investors opt for hard money loans. In Atlanta, the interest for hard money loans is typically 13.3%. Because hard money financiers have a flexible underwriting process, the financing can be suitable for certain types of deals.
Here are some of the ways investors and small businesses can benefit from asset-based financing:
Fix and Flip Hard Money Loans
With fix and flip investments, buyers purchase a house then renovate it and sell it for a profit. An investor may go for hard money financing to improve the property’s curb appeal or to renovate its interior.
Hard money loans are good for properties in poor condition that the buyer hopes to sell within a year or less. It could be for single-family residential, multi-family residential, commercial, or industrial real-estate. The wide range of options available gives investors the flexibility to access different types of property investments. Additionally, most hard money funding can be approved in less than 15 days. By contrast, traditional private lenders typically require 30 to 45 days.
One advantage of hard money loans for fix and flip investments is that the process is not delayed by lengthy underwriting policies. Remember, even after being subjected to lengthy processes, there is no guarantee the investor will get financing from banks or private lenders.
As technology evolves, businesses are more connected than ever. It’s not uncommon for these companies to quickly respond to new challenges and higher levels of competition. Businesses may require financing, but they may not be in a position to wait for lengthy processes. Using hard money loans, these businesses can lease or buy the equipment they need to set themselves apart from the rest.
A traditional lender may decide to turn down your application because they deem the investment as too risky. You may also be required to show that your debt-to-income ratio is not below the required 43%. Not all the debt-to-income ratio that is beyond the required 43% indicates the business is not in good shape. In fact, a high debt-to-income ratio could be a sign that the business is expanding. With hard money financing, borrowers can get a loan fast and renegotiate their payment schedule.
Contractors and investors can take advantage of hard money lenders in Atlanta to ensure that they complete their new projects on time and on-budget. There are times when investors have to move quickly to avoid missing an opportunity. Quick approvals can ensure that contractors finish their projects in time to take advantage of the investment prospect.
Asset-based credit does not require collateral and it typically has a short approval period. With private lenders providing traditional loans, construction companies could lose out on a good project. Hard money lenders have processes whose approval period can vary depending on their policies. The contractor can proceed with the project without any delays.
Traditional lenders, therefore, add unnecessary obstacles for borrowers who need flexibility, speed, and convenience to take advantage of good investments. Property prospectors and contractors looking for construction loans can benefit from hard money loans in Georgia. Businesses and investors with this information can conveniently start the process online. From your home or office, you also get timely updates on your hard money loan’s progress as you focus on your investment. Rely on Hard Money Georgia today to get your big idea off the ground.