Banks want businesses to have established credit scores and several years of documented cashflows. These requirements present quite a conundrum for startups.
If you can’t get credit from the bank how are you supposed to build a business credit score? If you opened your doors six months ago, how can you give the bank years of income and expense statements?
Startups can’t meet these requirements from conventional lenders.
So many startups rely on alternative financing, and there’s one type that of financing that stands out when it comes to helping start-ups capture those breakthrough business opportunities.
Its a type of financing known as hard money.
Hard money is a loan secured by a hard asset. What matters to these lenders is the underlying value of your business property. If in the event of default, selling off your store-front will cover the cost of your loan, then you can qualify for hard money.
Here’s just some of the ways hard money can help startups:
• Credit score and cash flow aren’t a concern- When it comes to these lenders, the most important consideration is collateral, not your businesses credit score and you don’t need years of financial documentation to qualify.
• Fast application process- With hard money the application process takes about a week. Usually, all that’s needed is a quick appraisal. So when a breakthrough opportunity presents itself, you won’t miss out, waiting for your loan to get approved.
• No restrictions on the use of funds- When it comes to hard money there’s no fine print concerning how you can spend the proceeds of your loan. You can use hard money financing to buy discounted inventory, create new signage for your store or anything else your heart desires, but don’t get carried away. Hard money is meant to be paid off quickly, so it’s best used for short term opportunities that will generate a significant return in a matter of months.
You should use hard money for things like investing in equipment that will exponentially increase the pace at which you can do business, buying inventory that you know you can sell off quickly or moving to a location where you know there’s far more foot traffic.
You shouldn’t use hard money to finance your ten-year marketing plan or any other long-term investment. But, hard money offers startups the ability to take advantage of these and other opportunity, which is something regular banks can’t offer.
Hard money helps startups capture fast-moving, short term opportunities, which means it could be precisely the type financing your startup needs to capture that big break and really take your business to the next level.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.