How to Compare Hard Money Loan Lenders

Using a hard money loan can be a great way to fund a variety of projects for your business. Hard money loans are a topic that many business owners know little about, so comparing lenders can be difficult. Before you get involved with a hard money lender, you should know something about how they do business.

During the application process, ask them to provide you with some references of people that they have worked with. Some hard money lenders are better than others when it comes to working with people. Therefore, you want to find a lender that emphasizes customer service and is willing to help you if you have a problem. Make sure and check with some other businesses or people that have used them and see what their experiences were. Here are a few ways that you can compare potential hard money lenders.

Interest Rates

A great way to compare hard money lenders is by the interest rates that they offer. There is no market rate for hard money loans. They can charge whatever they want for interest. Since they are individual investors, they decide how much they want to charge based on their personal investment goals. This means that you could get a wide variety of interest rates quoted to you when you start shopping around. For this reason, it is important that you do not simply go with the first hard money lender that you come across. Make sure that you are getting the best rate available to you before you sign the papers.

Convenience

When shopping around for hard money lenders, you will also quickly see that some are more convenient than others to work with. Many of them make it very easy for you to do business with them, while others can be difficult. For example, many hard money lenders now have websites and online application forms. This can streamline the process and make it much simpler for you as a potential borrower. Others only want you to apply in person and come to wherever they are located. When working with a hard money lender, it is nice to be able to find someone that is willing to accommodate your lifestyle.

Requirements

All lenders have their own approval criteria. Some might want you to have a valuable piece of collateral to use for the loan. For example, many like to have a high-value piece of real estate involved in the deal so that they know they can get their money back, in the case of default. They will also typically have a low loan-to-value ratio. Therefore, you may have to secure part of the money for your needs from another source. If you can find a lender that loans more than the others, this may be to your advantage. Ultimately, you may have to work with whichever lender is willing to work with you. However, if you have options, choose the one that has the best features to work with.