Investors who have tried getting financing for commercial real estate from a traditional bank will agree that the process can be daunting, lengthy, and can sometimes make you miss out on a deal. But thanks to commercial hard money loans from private lenders, you can get funding faster.

Unlike traditional bank loans based on your creditworthiness, hard money loan lenders evaluate the commercial property’s value when deciding whether or not you qualify for a loan. They focus on the property’s value after the development of the renovation phase for those involved in flipping property.

Here is why many seasoned commercial real estate investors opt for Richmond, VA, commercial hard money loans instead of traditional financing options.

It provides a quick turnaround time.

Banks have rigid funding criteria and follow all sorts of regulations before determining whether or not you qualify for a loan. In most cases, it can take more than a month to secure a commercial mortgage loan, making you miss out on time-sensitive projects.

Thankfully, commercial hard money loans provide funding within weeks or days, depending on the private lender. This quick turnaround time is valuable for closing lucrative commercial real estate deals that cannot afford to deviate from the completion timeline.

It comes with flexible terms and rates.

Unlike traditional banks, it is possible to negotiate loan terms with a commercial hard money lender. Some private lenders can even allow you to adjust your repayment schedules depending on your business plan and requirements. Most importantly, you may be able to reduce origination fees and other costs during the process of underwriting.

A flexible collateral

You can qualify for a commercial hard money loan even with poor credit. In hard money financing, the commercial property itself serves as the collateral for the loan. However, some lenders are more flexible and can allow you to use other assets such as residential property or retirement account as collateral to secure the loan.

Access to professional knowledge

The bank is not interested in knowing the kind of commercial property you want to invest in and whether it is profitable for you or not. However, commercial hard money lenders have real estate experts who take the time to examine the property you wish to invest in and offer valuable advice. Private lenders who lend locally understand the local commercial real estate and can ensure the viability of your investment.

Hope for borrowers with poor credit

Commercial hard money loans provide hope for commercial real estate investors with poor credit or those who fail to secure a loan from the bank. Commercial hard money lenders can offer the much-needed financing to secure a commercial property for investment.

It is a good financing option for a beginner.

When venturing into commercial real estate, it isn’t easy to raise investment capital on your own. Commercial hard money lenders can help you buy property without spending your funds. When you are disciplined in honoring the contract terms, they will be more willing to work with you on future projects.

The bottom line

Hard money loans are ideal for commercial property investors who need quick and flexible loans.