Hard Money Vs Private Money – What Type of a Loan Works Best For You?
photo credit: Jonas Lamis
When trying to raise the initial funding for your investment, there are several things to consider. For example, would it be in your best interest to enlist the assistance of a hard money lender or would it be better to use the resources of a private money lender. There are pros and cons to both methods of financing, and after you have weighed both, selecting what works best for you should be much easier.
Hard money lenders include small companies and individual investors, and are a good source of quick cash. Although the money is readily available and easily accessible, you might find that it also comes with a pretty high interest rate. For this reason, it is a wise idea to consider a hard money option if you are planning to finance on a short term basis as it is an excellent short term financing tool. Read more
Originally posted 2009-08-02 16:21:24. Republished by Blog Post Promoter
Hard Money Business Loans Are Ideal For Those Who Need To Move Quickly
When most of us refer to hard money business loans, we are talking about loans made by private lenders, rather than commercial banks. It may be referred to as “unconventional”, but in some cases it is the best choice. There are many reasons why you might choose to go this route as it offers many advantages for the borrower.
You will not find a listing for hard money real estate loans in the yellow pages. On the other hand, you will see thousands of websites on the internet offering them. You should be very careful. There are companies that ask for up-front payment of fees associated with securing your loan, without any sort of guarantee concerning how long it will take or even if the loan can be made. Lots of people have been ripped off. So, be suspicious and check the company. You want to borrow money, not lose it to a scammer.
The same warnings are applicable for those of you that are looking for any kind of hard money business loans. People who are looking for this kind of financing are often desperate. Con-artists rely on desperation to cause people to “act quickly”, when it is usually best to take at least a little time to make sure that you are getting the help that you need. Because of the scams and the rip-offs, there are some financial experts that question the legitimacy of any kind of unconventional financing. They sometimes even deny that there is a need it.
The truth is that there are private lenders that offer legitimate hard money real estate loans and other services. These lenders fill in the gaps left by conventional banking requirements and red tape. They are typically short-term loans, but can be offered for an extended period of time. There should be no penalty for early repayment. And, the funds are usually available right away, as opposed to the months of waiting that are associated with conventional lending.
Hard money real estate loans work well for the investor that has found a great deal. The seller wants to close quickly. The property needs some work. The difference between the private lender and the commercial banker can make a big difference in the amount of profit the investor walks away with.
First of all, a number of closing costs accompany conventional real estate loans. The costs associated with private loans are lower. Completing a conventional loan will take at least a month, and oftentimes 2-4 months, especially these days. The seller may not be willing or able to wait that long. Another buyer with readily available funds may be just around the corner.
Banks typically will only lend the amount needed to pay the selling price. Private lenders may be willing to add in the estimated costs of repairing the property to insure a higher resale value.
Hard money business loans offer the owner an option to the high interest rates associated with credit cards or bank lines of credit. There are many cases in which a relatively large amount of money is needed quickly. For example, a piece of equipment needed to fulfill a contract breaks down weeks before the contract is to be filled. Delaying the fulfillment of the contract may mean less profit to the business owner.
Charging the equipment on the company credit card might not be an option for a number of reasons. The business owner knows that the income from the contract will be much more than the cost of the new equipment. A private lender offering hard money business loans may be the right choice. The money is usually available quickly and terms for repayment can be negotiated privately.
There are may be other advantages, unique to your personal situation. The ones mentioned here are just some of the major points to consider. The bottom line is, it is harder now than ever before to secure a loan from a bank…why not look into a hard money real estate loan instead?
Author: James Whitmore
Article Source: EzineArticles.com
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Hard Money Business Loans Are Ideal For Those Who Need To Move Quickly
When most of us refer to hard money business loans, we are talking about loans made by private lenders, rather than commercial banks. It may be referred to as “unconventional”, but in some cases it is the best choice. There are many reasons why you might choose to go this route as it offers many advantages for the borrower.
You will not find a listing for hard money real estate loans in the yellow pages. On the other hand, you will see thousands of websites on the internet offering them. You should be very careful. There are companies that ask for up-front payment of fees associated with securing your loan, without any sort of guarantee concerning how long it will take or even if the loan can be made. Lots of people have been ripped off. So, be suspicious and check the company. You want to borrow money, not lose it to a scammer.
The same warnings are applicable for those of you that are looking for any kind of hard money business loans. People who are looking for this kind of financing are often desperate. Con-artists rely on desperation to cause people to “act quickly”, when it is usually best to take at least a little time to make sure that you are getting the help that you need. Because of the scams and the rip-offs, there are some financial experts that question the legitimacy of any kind of unconventional financing. They sometimes even deny that there is a need it.
The truth is that there are private lenders that offer legitimate hard money real estate loans and other services. These lenders fill in the gaps left by conventional banking requirements and red tape. They are typically short-term loans, but can be offered for an extended period of time. There should be no penalty for early repayment. And, the funds are usually available right away, as opposed to the months of waiting that are associated with conventional lending.
Hard money real estate loans work well for the investor that has found a great deal. The seller wants to close quickly. The property needs some work. The difference between the private lender and the commercial banker can make a big difference in the amount of profit the investor walks away with.
First of all, a number of closing costs accompany conventional real estate loans. The costs associated with private loans are lower. Completing a conventional loan will take at least a month, and oftentimes 2-4 months, especially these days. The seller may not be willing or able to wait that long. Another buyer with readily available funds may be just around the corner.
Banks typically will only lend the amount needed to pay the selling price. Private lenders may be willing to add in the estimated costs of repairing the property to insure a higher resale value.
Hard money business loans offer the owner an option to the high interest rates associated with credit cards or bank lines of credit. There are many cases in which a relatively large amount of money is needed quickly. For example, a piece of equipment needed to fulfill a contract breaks down weeks before the contract is to be filled. Delaying the fulfillment of the contract may mean less profit to the business owner.
Charging the equipment on the company credit card might not be an option for a number of reasons. The business owner knows that the income from the contract will be much more than the cost of the new equipment. A private lender offering hard money business loans may be the right choice. The money is usually available quickly and terms for repayment can be negotiated privately.
There are may be other advantages, unique to your personal situation. The ones mentioned here are just some of the major points to consider. The bottom line is, it is harder now than ever before to secure a loan from a bank…why not look into a hard money real estate loan instead?
Author: James Whitmore
Article Source: EzineArticles.com
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Who Cannot Use the Business Loans Alternative?
Business cash advances are a great alternative to the traditional business loan, but there are some small business owners who cannot take advantage of this method of business financing.
Home-Based Businesses
In order to qualify for an advance, the business loans alternative, a merchant must run his/her business out of a storefront/office. Why? Since merchant loans are unsecured and require no collateral, merchant cash advance providers are taking a big risk when they advance small business owners up to $500,000.
Merchants who operate from an office or store-front will usually have a business lease. A small business owner who is held to a lease is more likely to continue running his/her business until his/her advance is fully repaid.
Non-Merchant Businesses
One of the selling points of the business loans alternative is the flexible method in which it is repaid. Rather than requiring merchants to make monthly, out-of-pocket, fixed payments, providers deduct a small percentage from a business’s daily credit card sales. This procedure takes place for six to eight months, until the advance is repaid.
Non-merchant businesses who do not process credit card sales will not be able to partake in the repayment method that business cash advance providers use. Therefore, they are ineligible for advances.
Merchants with Unresolved Bankruptcies
Small business owners who receive merchant cash advances cannot have unresolved bankruptcies. Merchants who have filed for bankruptcy in the passed, but have resolved the issue may still be eligible for a business cash advance.
If you own a office/storefront business that processes credit card sales and you have no unresolved bankruptcies, the business loans alternative may be right for you. Get a free online quote today!
Author: Gaston Castro
Article Source: EzineArticles.com
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Strategy planning for small and medium size businesses
Small and medium businesses (SMB) often invest in the creation of a business plan or strategy at some point or another. The effort is often justified by :
- The need to have a reference document to submit for financing issues,
- The need to comply with business practices that business managers learned or heard about. After all, all business advisors will say that you must always have a business plan.
Yet, after completing the business plan, the SMB will quickly start ignoring the plan and not monitoring against it. This is usually due to the entrepreneurial nature of the SMB, their fast-pace and also the fact that most business plans are impractical to communicate, maintain or monitor:
- Business plans are usually made of 20-50 pages of text and numbers, all related to each others. Changing part of the plan is not easy and it often forces lots of rework. The plans tend to become obsolete very quickly, defeating their purpose.
- The plan contains confidential information like financials and it is unpractical to distribute it freely to all staff. The plan tends therefore to stay secret, again defeating the purpose.
- The business plans do not allow easy monitoring of the performance. Quickly managers will rely on pure financials assessment of their business, focusing on P&L and balance sheet, forgetting the other important aspects of the business.
A better solution for SMB is to use on-line enterprise performance management (EPM) solutions. Easy to share between managers and staff, yet easy to secure confidential information, the EPM is easy to implement, easy to maintain, straightforward to monitor. Best EPM are based on the balanced scorecard concepts, where the strategy formulation and its monitoring (through KPIs) is built-in a single, easy to understand framework. The strategy stays always fresh, is communicated well and the active monitoring foster better short and long term performance.
To get an idea or try an EPM you can visit our web site at www.managementscorecards.com.
Article Source:http://www.articlesbase.com/strategic-planning-articles/strategy-planning-for-small-and-medium-size-businesses-1508794.html
Hard Money Business Loan – The Facts About a Hard Money Business Loan
The cost of starting up an enterprise is high; most advisers recommend that you have at least $50,000 capital on hand “just in case” when you begin your own venture. This is meant to be for unknown problems and glitches, not the actual equipment and running costs. You really need that buffer to create a comfort zone to allow your venture to operate until it takes off on its own. But cheer up. If starting an enterprise is costly, you can usually get all the advice you will ever need or want for free.
But when this nest egg begins to decrease and your venture just hasn’t taken off, how do you remain current on all of the financial obligations? Do you consider obtaining additional financing or is debt relief counseling a better solution?
First of all, it is time to review what types of loans are being offered and which type you may already have. Every bank, savings and loan and credit union has a somewhat bewildering package of small business loans. Most of the loans offered are straightforward, unsecured loans that are based upon the overall credit picture of all of the partners, the overall plan, and the determination of the lender that you prospectus is sound. This sounds as though you will be facing quite a bit of scrutiny. Is there an alternative if you dont get the money you need in this way? There are always alternatives, but it is important to determine if they are valid for your purpose.
One alternative that may be offered is a hard money business loan. In opposition to an unsecured small business loan, a hard money business loan is secured against collateral that you put up. It is usually in the form of real property, such as an apartment building or office space that you already own. Some people offer their homes as collateral, a very bad idea since it mixes business and personal finances and it opens the door to real problems on all levels if the enterprise does not do well and prosper as planned. In some cases, a hard money business loan will be issued against an expensive vehicle or equipment, but the value of the property put up as collateral will have to be in excess of the value of the small business loan that you are seeking.
A hard money business loan is always a risky venture, and it is nearly always preferable to obtain the debt relief that can be negotiated by a qualified consultant. Seeking a hard money business loan to try to settle existing financial problems just digs a deeper hole for your enterprise. It is better to get the advice of a skilled financial counselor who will advise you regarding the real options available to reorganize your financial obligations.
Another thing to remember if you are tempted to take out a hard money business loan is that this type of business debt will not be eligible for debt consolidation, debt settlement or even Chapter 11 bankruptcy relief. The programs that are offered by debt relief consultants and lawyers can only address unsecured business debt. The only recourse available to an enterprise that is in financial trouble with repayment of a hard money business loan is loss of the collateral to the lender, which may satisfy the debt but does not erase the damage that have already been done to the credit rating.
Author: James A Banks
Article Source: EzineArticles.com
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Hard Money Loans-Easy To Borrow
Hard money loans are the amount being borrowed to solve some urgent financial problems. The term hard signifies its quite Herculean to obtain because these loans are not provided by banks or financial institutions rather they are disbursed by private financial groups or lenders known as hard moneylenders. Hard can also be interpreted in different manner as there is high upfront cost involved and exorbitant interest rates are being charged. These loans also have high origination fees and cost more than an average mortgage (in some cases going as high as twice that of average mortgage).
Hard money loan is generally explored as the last resort. It should be understood like if one is willing to sale his/her business venture or the property and he/she thinks with a little bit of renovation and repairs the money generated can be quite high then hard money loans can be the best suited option for him/her. All he needs to do is to obtain the loan utilize it make some extra money and return it.
The uniqueness of hard money loans lie in their various characteristics like they have private lending sources. They come with short interest term of one to three years they charge upfront fee on closing before three months of the due date that is quite astronomical. There is limited number of debt covenants and they are shorter in duration. Moreover the failure in repayments results in the sale of the assets to nullify the debt.
Hard money comes in forms like hard money business loans or residential hard money loans. The hard money loans are usually secured by real estates of commercial viability. Hard money borrowers get the fund based on the estimated value of the commercial or residential real estate. The lenders are interested in money generating properties such as apartments, shopping malls, office buildings, hotels, hospitals and so on. However potent income generating activities like land acquisitions, bankruptcies are also seen with interest.
People who have been turned down the mortgages by the financial institutions because of various reasons like having a poor credit history, non competence to pay as they lack in desired income etc. also look upon the hard money loans as their saviors. Hard money loans are also sought by persons who are falling behind the repayments of their mortgage or fear the foreclosures.
The investors are lured by the typically high return on their amount which banks fail to provide them. So investing in hard money loans to borrowers having equity of 30-40% in the property seems to be a better proposition to them. These loans are given on the appraised value of the commercial property unlike traditional bank criteria which seek too many documented proofs like credit card scores, tax returns and income statement of the borrowers. Lesser paper work and lesser verifications make the procedure to obtain these loans very brisk.
Author: Steve C Clark
Article Source: EzineArticles.com
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THREE ESSENTIAL TOOLS FOR THE INTERNET MARKETER!
Crucial Tool #1: Your Own Web site
The most important and critical tool in internet Marketing is having your own web site The first step in any booming internet marketing business is building a great, credible and professional looking web site Your web site is the leap off point for all your selling efforts. Thus, you must 1st build a user-friendly web site, which will attract your prospects and encourage them to click-through on the links to the products and services you are marketing – and then help them make a purchase. Consequently, you must first focus your efforts in building a web site that will provide exactly what your prospects think they need.
The most significant thing you should consider is that almost all web users go online to search for information; NOT necessarily to go and purchase something. Above all else, make your web site appear to be overflowing with original, fresh, relevant and valuable content. People will love articles that are appealing and helpful. Bear in mind that, on the internet, content rules supreme! Plus – good quality content will not only build your credibility, but it can also assist you to achieve a higher search engine ranking. By placing relevant and useful articles, you brand yourself as a credible expert in the field, making you a more trustworthy expert of the product or service which you are promoting. Building a good reputation is a wise step in developing a loyal consumer base.
Crucial Tool #2: Incentives
Competition is extremely close in the online world. You must always be one-step in front of your competitors to ensure that you capture a significant share of your target market. Therefore, you must use every possible way to encourage people not only to visit your site, but also to click-though and continue visiting your web site that has the products and services you are marketing. Building an opt-in email list is one of the better ways to gather prospects. Offer a newsletter or an e-zine. Better yet, offer incentives to your prospects to encourage them to subscribe to your newsletters. You can do all sorts of things like: award free software, give access to selective services, give away valuable freebies that will be accommodating to your prospects.
Significant Tool #3: Link Popularity
The significance of driving highly targeted traffic to your web site can’t be stressed enough. The all-important thing you want is “internet traffic” – and it needs to be at the top of your list of the most important things you need to do in the online world. Drawing people to your site should be the first step you should carry out. Do everything to attain a high search engine ranking. Link Popularity is one of the criteria that search engines use to decide search engine rankings. Therefore, to improve your link popularity, you must launch an ambitious reciprocal link campaign.
One of the top ways to do this – at zero cost – is by submitting articles, with your web site’s link to things like e-zines and free article sites. You will not only derive exposure, you will also get the opportunity to advertise for free. Then, all you do is to include a link back to your web site. The more web sites you submit your articles to, the better your link popularity is. Make your articles original, fresh, relevant and useful so that more web sites will pick them up and post them on their sites!
These are just 3 of the numerous tools that an internet marketer can use to maximize earning potential. The possibilities are infinite and they are limited only by your imaginativeness, creativity, resourcefulness and purpose. You can always search other ideas and adapt other tactics & strategies, which you think might help you become a top producing internet marketer.
Thank you, David James
David and Christine James Online Business Owners and Mentors. Article Source:http://www.articlesbase.com/strategic-planning-articles/three-essential-tools-for-the-internet-marketer-1471025.html
Questions may be replied to davidandchristinebttw@gmail.com
Hard Money Land Loans
There are various types of hard money land loans. They are classified based on the purpose of the loan. Some of these are commercial, construction, bridge, land acquisition, development and residential. The term hard money refers to the difficulty in acquiring such a loan.
Land is necessary for any construction or real estate development. Most conventional lenders such as banks, savings and loan association and pension funds are not interested in giving such loans. Developers therefore approach loans specialists who are able to find investors to make these difficult loans.
Hard money land loan lenders are, one such group of specialists who can find money for, short-term land development loans. They usually offer loans for a smaller percentage, of value than conventional lenders. Additionally, their loan terms are usually worse than conventional lenders.
Typically hard money land loan lenders will only loan liquidation values of the land parcel. These lending sources have higher interest rates and shorter loan terms. Most hard money land loan lenders who make raw land loans place them with private money sources. They will make loan decisions based on asset value rather than the borrowers? credentials. This makes these loans easier to get but harder to service.
Since raw land deals are often time sensitive, the hard money land loan lenders, are used to making fast underwriting decisions. They quickly qualify the borrowers and ensure that, they have the capital required and then provide their decisions within one or two business days.
Borrowers approaching hard money land loan lenders are required to follow strict guidelines set by the lenders. Some lenders will not finance a purchase of, foreclosed properties or properties encumbered by liens or judgments. Borrowers typically use brokers, to navigate through the list of restrictions in order to find, the best hard money land loan lender. Hard money land loan lenders are frequently used, when the risk is higher, but there is adequate collateral to cover these higher risks.
Author: Thomas Morva
Article Source: EzineArticles.com
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Secure Your Business Dreams with Secured Business Loans
In the old days a man who saved money was a miser; nowadays he’s a wonder. In todays expensive world, it becomes very difficult to make our ends meet, leave alone saving money.
So, it might be a fact that you have not saved enough money and are planning to start-up a business. So, what to do now? Well! You dont need to despair as there are a wide number of sources available to finance the business. But the best and cheap alternative available in the finance market is the Secured Business Loan.
Money rules the world of business. And, this holds true for any type of business, be it small or large. Your big ideas for your business wont materialize if you dont have the required money to finance your idea. And, not all of us are fortunate enough to have the required funds for starting up a business. Thats when Business Loans come in handy. However, you must be wondering with so many people applying for Business Loans, how many of them get the approval for a Business Loan? Well! Your chances of availing a Business Loan will be high if you can attach a security to Business Loans and go for Secured Business Loans.
Just like any other type of secured loan, Secured Business Loan also demands collateral against the loan taken. In a Secured Business Loan you can offer collateral in the form of commercial properties, machines or equipments.
For approval of a Secured Business Loan, generally lenders ask to produce few of the documents. The prime among them is discussing the character of business, annual sales, length and time of business ownership. In a Secured Business Loan the loan application should be inclusive of a loan request. This will include the type of Secured Business Loan required, the amount and the purpose (how the funds will be used).
Lenders generally prefer lending money to large firms as the large firms have a lot of assets (e.g. land, buildings etc) and can offer the bank a lot more security than small firms. Also large firms stay in business longer than small firms and are therefore of less risk to lenders. Therefore, lenders usually charge a higher interest rate to small firms to compensate the higher risks involved. Yet to remember that that Secured Business Loan in general enables its borrowers to enjoy a lower rate of interest as compared to unsecured ones. In a Secured Business Loan, the borrowers have the freedom to repay either by fixed interest rate or a flexible interest rate loan. As the name suggests, in a fixed interest rate loan the interest rate is fixed in the beginning of the loan term and it remains constant throughout the loan term. In contrast, in a flexible interest rate loan the interest rate fluctuates in accordance with the market rate of interest.
Secured Business Loans are the ideal option for those who are looking for business loans with security. However, before applying for a Secured Business Loan, make sure to check out your repaying capacity.
To Get Related Info Visit http://www.adverse-credit-business-loans.co.uk.
Author: Diya Dhar
Article Source: EzineArticles.com
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