These type loans are individual, custom-made, off the beaten track, but they aren’t entirely without restriction. Collateral is required. In this respect, Arizona hard money loans allow the use of your assets—namely the property value of commercial real estate–in order to back the loan. This protects the lender in the event that borrower defaults on repaying the money for whatever reason, up to and including death.
There are numerous alternatives to funding your business as you will discover when you start the search. Traditional mortgage companies and banks are the first place most business owners go to only to discover they don’t fit the tightly structured qualifying package that these lenders have to work with. Not to mention the load of documentation that has to be produced, the time it takes to get an application processed and the fact that you don’t really talk to the actual lender to explain your situation. Instead a committee or board that you never see decides if you get your money or not. And a considerable amount of the time, the answer is No, even for a series of small mistakes.
So if you fund your Arizona business loan through a Arizona hard money lending company, what are the advantages to this method?
Timing: if your business is in financial trouble, you don’t need to be told that the decision will be made in around six months. The Arizona hard money people reach their decisions much more quickly and you will know where you are sometimes as fast as two weeks.
Documentation: it takes hours and hours to fill out all the forms that comprise a conventional lenders‘s application. But in the event of non-traditional funding, when only your collateral is being given a close look, this is not case.
Credit scores/history: banks are set up to depend heavily on these items—most of them want a FICO score of above 700. If you don’t have that, it can slow things down considerably—other holes in your past credit history, for example, a foreclosure, can stop the process altogether. The lenders who work in Arizona hard money don’t view your credit score as nearly important as your ability to show collateral/pay the loan back.
To be certain, all these reasons make applying for this type funding fall into a positive light. But there are other factors in taking on a Arizona hard money business loan that are worth considering. Let’s look at them.
These loans are expensive—fees and interest rates are higher than conventional loans are. This, again, protects the lender, in case of loss.
Funding of this type is risk-filled since there is always the chance that something will go wrong and you will end up losing your collateral. A worse-case scenario is that if your collateral is now deemed as not being worth the value of the loan, more must be provided and that may fall into providing personal items of value.
These loans are a positive value to many business people and there are numerous stories of good results from taking one on, but before you do, research the situation with great care, talk to an attorney, an accountant, people who have been in real-estate for a sizeable number of years. Then determine if a Arizona hard money business loan is the right funding for your business.
Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: 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.
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