Emergency Funding 101: What is Hard Money and Why Do I Need It?

Emergency Funding 101: What is Hard Money and Why Do I Need It?

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Hard-Money-Emergency Funding

The Coronavirus/COVID-19 is decimating business and personal finances. An unbelievable 90% of businesses have lost revenue due to the outbreak. 57% of businesses expect to lose 75% of their revenue or more. 

It’s not just affecting the United States, either, but businesses all over the world. 60% of small- to medium-sized businesses cited cash flow problems as the main reason for going out of business before Coronavirus. It remains to be seen how widespread the devastation will be as the lockdown continues.  

Hard money loans are going to save a lot of businesses and individuals in financial straits in the months and years to come. But what is a hard money loan?

What is a Hard Money Loan?

The premise behind a hard money loan is actually pretty simple. It’s a short-term loan that is underwritten by real estate. Hard money loans are offered by private investors rather than lending institutions. They are usually for 12 months but can last for as long as 2 – 5 years. 

Hard money loans are contingent on the value of the property serving as collateral. This is another benefit of hard money loans, as they have less to do with a borrower’s credit score than more traditional loans. 

What Type of Properties Qualify for Hard Money Loans?

Almost any type of property qualifies to serve as collateral for a hard money loan. Single-family, multi-family, commercial, industrial, and undeveloped land can also be used to help secure a hard money loan. 

Certain hard money lenders may specialize in one type of property or another, however. Some may prefer commercial properties. Others may specialize in single-family residential homes. 

If you’re trying to secure a loan through a hard money lender, you may want to check with the loan provider to see if they have a preference. 

One thing to keep in mind is that certain hard money lenders won’t lend against properties that are occupied. This is due to extra complications and legalities due to the Dodd-Frank Act. 

Best Types of Deals for Hard Money Loans

Hard money loans don’t make sense for every kind of transaction. It might not be the best format for buying a primary residence, for instance. 

Hard money loans are best suited for faster transactions. Fixer-uppers and flipping houses are one example of an ideal hard money loan situation. Land loans are another situation where shorter loan terms make sense. 

Hard money loans are ideal for situations where you stand to turn a profit in a short amount of time. You can simply take the balance, pay off your debt, and pocket the profit. They’re also ideal for borrowers who are looking to build some capital or improve their credit scores. 

Are You Looking For A Hard Money Loan?

Are you in the market for a hard money loan? Just need some fast cash to help survive this epidemic? Or perhaps you’ve got a business opportunity you’d like to take advantage of?

At PB Financial Group Corp, we have been providing quick funding since 2006 and have funded over 2000 hard money/private money loans helping our clients with valuable property acquisitions, development, bankruptcy discharges, probate resolutions, and so forth. For further information or to schedule a consultation, please contact PB Financialat 877.700.3707 orvisit www.CalHardMoney.com to learn more.

PB Financial NMLS #357614/DRE #01522495

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Pouyan Broukhim

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