Hard money commercial loans are a popular product these days. The banks are still stringent with regards to the requirements needed to obtain a commercial loan, and often times our clients need money more quickly than a bank can act.

One of the advantages of hard money commercial loans is that the debt coverage ratio, or DCR, does not have to meet the institutional standards of many banks. It is not uncommon for the banks to require a 1.25 DCR. The problem is that many times clients call where rents have fallen, or they need to make improvements in order to increase their revenue.

This is where a hard money loan can come in handy, even for borrowers who may not have needed to use hard money in the past. With a hard money loan in a situation like this, we can help finance the project based on the value of the collateral. With cash out being used to improve the finances of the property, an exit strategy of obtaining bank financing is realistic in many cases.

Here is one example of a client we were able to help in a situation like this. This transaction was a hard money commercial loan to help the owner of this restaurant finance the cost of expansion of the restaurant and obtain a liquor license. The borrower owned this property for many years, and there was enough equity that we were able to meet his needs without a commercial appraisal being done.

The time and requirements that institutional lenders required did not work with this borrowers needs. He needed to expand and start the process of obtaining his liquor license immediately. We were able to step in and help him obtain the funds he needed in a timely manner. Our investor visited the property and the loan was funded very quickly.

This is just one example of a funding where we were able to help a commercial property owner obtain the financing they needed to expand their business using hard money.  If your commercial property has equity in it and you need alternative financing, hard money may be the option for you.  We can help with your hard money needs throughout the state of California.  Give us a call today to discuss your scenario, typically we can give you a good idea of what we can do with about a five minute conversation.  For more information on the programs we offer, visit our California Hard Money Loans page.