Applying for Hard Mone Commercial Loans Online

Many hard money commercial loan lenders have chosen to take their business online, offering streamlined application processes, easy document collection, and efficient underwriting. Before you decide to apply for a hard money commercial loan online you should collect all the relevant documents and do your research on each particular lender.

Hard money lenders differ from traditional lenders in that their loans are purely asset based loans.  This means they are lending you money based solely on the value of the asset which you are pledging as collateral.  They rarely look at credit reports and are less worried about your previous payment histories.  The amounts they lend are a low percentage of the asset value, and in the event of default they are usually able to quickly sell the reclaimed property and recoup their investment. 

As such, hard money lenders typically require less information than traditional lenders. In many situations the only information you'll be required to provide in an online application will be:

  • Name and address of the applicant
  • Address of the property or business on which you are requesting a loan
  • Amount of money requested
  • Salary or Income Information
  • A list of current and outstanding expenses and debt

Some hard money lenders also request social security and date of birth information with which to run credit.  Typically, hard money lenders use the credit report not to determine credit score or FICO, but to determine if there are any outstanding judgments or legal actions against you that might take priority over their new loan and place cloud on title of the property.  An example of this might be an IRS tax lien.

Other hard money lenders will ask to see a profit and loss statement and balance sheet which detail the health of your business and its likelihood to survive in cash poor periods or recessions.  

All this information allows the hard money lender to develop a profile of the potential borrower and to determine the risks in lending to such a person. The online application usually takes between 10 and 30 minutes depending on the level of detail requested. The initial underwriting period however can take as few as 24 hours or as long as 90 days.

Usually, the basic information listed in an online application is enough for a hard money lender to determine whether they should make a loan or not, and will prompt a call to you to discuss the loan further.

Before any loan will be approved though, the lender will require title work, and in some cases an appraisal. These documents take both time and money to complete, and should not be ordered until the lender has issued some type of commitment or pre-approval signifying they have interest in, and the ability to make, the loan you have requested.

After you have discussed the online request with the lender and they have determined that your loan is possible, they will order an appraisal and open title. The appraisal will be ordered by the lender and title will be opened with a local escrow or title company. Today's technology allows both these important third party reports to be transmitted and tracked online.

Always be careful before submitting sensitive information online. Take care in researching every potential lender before you make any online applications. The better business bureau and other online reporting agencies keep information and complaints against lending institutions and other companies. State law also requires certain licensing be obtained for lenders of any type. This information can be researched through state licensing departments, the FDIC website, and other online channels. Do not make an online application to a lender that is not licensed to lend in their state of business.