Hard money loans – also referred to as bridge loans, private capital, or quick funding loans – offer several smart benefits compared to traditional loans from banks or financial institutions.
Here are some key advantages to choosing a hard money loan over a traditional bank loan to support your business or commercial real estate needs.
1. Flexible Terms
Hard money loans often provide more flexibility in terms of loan amount, repayment schedules, and interest rates. Borrowers can negotiate terms directly with hard money lenders, allowing for customized loan agreements tailored to their specific needs.
2. Quick Approval and Funding
Hard money loans typically have a streamlined approval process compared to traditional loans, which can involve lengthy paperwork and extensive documentation.
Private lenders can make quick decisions, enabling borrowers to access funds faster, sometimes within days or weeks. At Innovative Capital, we can fund in as little as seven days as a trusted direct lender.
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3. Less Stringent Credit Requirements
Hard money lenders may be more willing to work with borrowers who have less-than-perfect credit histories.
They consider factors beyond credit scores, such as the borrower’s income, assets, and the value of the collateral. This makes private capital loans more accessible for individuals or businesses with lower credit scores or who may have been turned down by the bank for other reasons.
4. Collateral Flexibility
Hard money loans often allow a wider range of collateral options. They may accept assets that traditional lenders typically do not, such as inventory, equipment, or intellectual property. This provides borrowers with more options to secure the loan.
5. Entrepreneurial and Non-traditional Ventures
Hard money lenders are often more open to funding unconventional projects, startups, or ventures that traditional banks may consider too risky.
They can evaluate the business potential and assess the borrower’s expertise beyond traditional financial metrics.
6. Personalized Relationships
Hard money lenders/private capital lenders tend to offer a more personalized and hands-on approach. Borrowers have direct access to the decision-makers and can establish a relationship with the lender.
This can lead to better communication, flexibility during repayment, and potential future collaborations.
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7. Investment Opportunities
Hard money loans can present investment opportunities. This can attract private investors seeking diversification or higher yields. For example, we source some of the hard money loans for our clients through our ICIF, the Innovative Capital Income Fund, to quickly match qualified borrowers with private capital through our trusted network.
Learn more about the ICIF here
Inquire about investing in the ICIF here
It’s important to note that while hard money loans offer advantages, they often come with higher interest rates or additional fees compared to traditional loans.
Working with our team allows the borrower to have access to both hard money and traditional financing through our bank network. We are an A+ Rated Business with the Better Business Bureau and make sure our clients know their financing options before making the right decision.
How to Get a Hard Money Loan in San Diego, Orange County, Scottsdale, Washington, and more
This is where our team at Innovative Capital comes in. We are a trusted direct lender in San Diego that can fund in as little as 7 days, working with clients and referral partners in San Diego and nationwide. We have funded over $500M for our clients since our inception in 2007 with no plans of stopping any time soon.
With our vast connections and keen eye for detail, our team will hunt for the best hard money option to suit your specific needs so you can get the cash you need, quickly. We do the heavy lifting for you so you can focus on other aspects of your business and come back to us for a list of options with the best terms and rates.
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