LLC or Individual for Hard Money

[Scott MacDonald]

Hi All,

I am in the process of starting my first direct mail campaign and I am trying to secure funding partners should I get some responses. The initial hard money lenders I have spoken to seem to only want to lend to a company and not an individual, is this normal? It seems like a fair bit of work and time to get an LLC up and running before I have tested if my strategy will work.

Thanks

Scott

[Kerry Boyle]

Closing in the name of an LLC is a distinction that hard money lenders use to avoid many laws and restrictions that would be imposed if it can be seen as a consumer loan. Hard money is typically a commercial loan on investment properties, and that is the crux of where the advantages are.

It is possible (depending on the state) to still be considered a hard money lender AND close in the name of an individual, but much less likely. Of course, I can't speak for every state or municipality - but to answer your question: Yes, it is normal.