Understanding the Different Types of Hard Money Loan Programs

Why Obtain Unsecured Business Funding?

Getting access to capital in the business sector can be a challenge, particularly if you find yourself without valuable assets to back a loan or line of credit. Fortunately, an unsecured business line of credit is a potential solution for business owners who require financing but do not have that much to offer when it comes to collateral.

An unsecured line of credit offers business owners a path to financing without the need for collateral and enables them to withdraw funds for a predetermined amount of financing. The borrower takes out only what they need at the time and pays interest on that amount. As soon as the repayment is made, the entire line of credit is once again made available.

Maintaining an open line of credit allows businesses on-hand cash with the added benefit that they do not have to pay interest on money they do not need immediately—as the interest is only applicable to the amount borrowed. Unsecured business lines of credit are ideal to cover unanticipated expenses to include equipment repairs and other necessary operational costs.

To qualify for an unsecured business line of credit, you will have to meet certain thresholds such as a minimum number of years running your business and a specific amount of annual sales. This type of financing is considered non-traditional in that it involves far less paperwork as a secured line of credit. Additionally, you have the option to repay the loan on your terms—you can repay the full amount each month, the minimum monthly payment or an amount over the minimum payment to get ahead. You can also use unsecured business lines of credit to bolster your business credit profile. The line of credit is issued to the corporation instead of a specific individual, so adhering to sound financial practices such as submitting on-time, consistent payments will boost your business’ credit score and assist you in obtaining further financing down the road.

Why Obtain a Fix and Flip Construction Loan?

Fix and flip construction loans are a form of real estate investment strategy where an individual buys properties and rehabs them with the end-goal of either selling or holding onto them as rental properties from which to garner passive income from as the value consistently appreciates. Fix and flip funding are short-term bridge loans that are specifically designed for the funding of real estate investment projects. Unlike conventional home mortgages that are issued by banks, fix and flip loans are financed by private, direct lenders such as Express Capital Financing.

The whole point of buying a fix and flip property is to quickly improve the home and sell it for income, so time is typically of the highest importance. Luckily, fix and flip loans are faster and more customizable when compared to traditional loan options. They can be approved and the funds distributed in as little as a week, whereas a conventional mortgage usually takes around two months or more to close. Another key difference between fix and flip loans and conventional funding is that banks typically have strict requirements pertaining to the condition of the subject property, and the loan total you will be able to qualify for will be capped to some extent by your credit score and the current valuation of the property. For fix and flip loans, the emphasis from the lender’s perspective is the After-Repair-Value (ARV), since the property is being purchased with the goal of rehabbing it.

Why Obtain a Large Scale Commercial Bridge Loan?

The main selling point when it comes to commercial bridge loans is expediency. Assume that a borrower has applied for a conventional commercial bank loan, however, the tight turn around for an upcoming transaction is looming on the not-too-distant horizon and the bank is dragging their feet completing their due diligence protocol. The borrower stands to lose a lot, as they must close on time in order to note forfeit a substantial contract deposit. That’s where a bridge loan comes in. This enables the borrower to work with a hard money lender to set up a short-term loan to carry them over until more permanent conventional lending is locked in. Express Capital Financing can tailor dynamic solutions for many new development funding situations where an acquisition loan must close prior to building plans being finalized and signed off on. We can even close on a commercial bridge loan with pre-agreed terms and documentation already hammered out for the bridge to be automatically modified to a mezzanine loan, which will subsequently subordinate to a future first mortgage construction loan package.

Why Obtain a Multi-Family/Mixed Use Bridge Loan?

In the commercial real estate sector, mixed-use refers to properties that are utilized for two or more uses. A common scenario is an office building that has a retail store on the ground level and a commercial bakery (i.e. industrial/production) on the upper level. Mixed-use property loans are attainable from Express Capital Financing for individuals, corporations, partnerships and LLCs and can be used to purchase and rehab multi-family or mixed-use structures before either reselling them or opening up operations that generate a dependable revenue stream. Unlike a traditional loan from a bank, our lending perspective is focused on the appraised value of the property and the amount of any encumbrances against it—as well as the overall viability of your long-term plans. We offer affordable rates and can tailor your loan package to accommodate your specific needs.

Why Obtain a Blanket Portfolio Loan?

A blanket mortgage, or a blanket loan, is used to purchase several pieces of real estate assets in a single transaction. Builders and developers who typically utilize this financing method can subsequently divvy up their property into parcels to be sold individually for a profit. As is the case with a traditional mortgage, a blanket loan is usually secured by the properties being acquired or refinanced, which function as collateral. However, there is a unique release stipulation when it comes to blanket loans that enables borrowers to sell a property and then be released from liability for that part of the mortgage while the rest of the loan remains in place. This allows borrowers the flexibility to sell the property without having to first repay the full outstanding balance or refinance the entire loan every time an individual property is sold. Blanket loans are ideal for real estate investors with a large portfolio of investment properties, builders and developers who routinely acquire large plots of divisible property and commercial development entities who use blanket loans to open multiple locations at once.