If you haven’t used hard money financing before, it’s natural to have some questions. Many companies are turning to this flexible, fast and simple loan option. At HML Solutions, we’ve helped countless businesses in Florida, from construction businesses to real estate developers. How can you use a hard money loan to benefit your business?
Real Estate Purchases
In Florida’s high-speed housing market, you need capital if you want to snag the best deals on real estate. Hard money loans are fast, often providing financing in as little as a week. That way, you can close on hot properties before other buyers get a chance to start a bidding war.
Whether you have your eyes on a bank foreclosure property or a house with a heart of gold that needs a lot of work, hard money financing can help. You can use this type of loan to purchase property, cover the cost of renovations, hire contractors and buy materials.
Sometimes, it can take a while to sell a property you’ve inherited. The same thing goes when businesses want to sell heavy machinery or another type of equipment. If your company needs funds in the interim, hard money loans can cover your operations until the asset sells.
Business Acquisitions and Buyouts
Acquiring a business or buying out a business partner generally requires obtaining a large amount of capital in a short period. You don’t have months to wait for a long-term loan, and you can’t count on revenue until you complete the negotiations. That’s where short-term financing is a huge help.
Investment Property Improvements and Repairs
Property managers typically have a hard getting approved for traditional financing for property improvements. Lenders don’t see the value. Hard money loans are much more flexible. With high-value improvements, you can increase your profits every month from your commercial and residential rental properties.
Cash Flow Stabilization
Any business that has cash flow issues can benefit from hard money lending. Cash flow problems aren’t the same thing as low sales volume. A company can sell more than enough every month but still run out of funds if customers take forever to pay. With a hard money loan, you can cover financial needs while waiting for client invoices to come due.
Can you honestly use a short-term loan to help cover payments on a long-term loan? Yes, if it’s a hard money loan. This type of financing is based on business assets, so it doesn’t hurt your credit to apply at the same time. You can cover the urgent loan payments until your revenue picks up enough to take care of the rest.
Credit Score Problems
Traditional loans — even SBA loans — are tricky to qualify for if you have past credit issues. Most banks won’t even seriously consider your application. With a hard money loan, it’s different. What matters is the value of your asset, not your credit rating.
These are just some of the benefits you can get thanks to hard money financing. To get started, contact us today for more information.