Why do borrowers use hard money?
In order to take advantage of ongoing projects and opportunities, investors often require more operating capital than conventional banks are prepared to provide on short notice. When conventional financing takes too long or is not available due to circumstances such as low credit scores, hard money can be an alternate means to acquire necessary funds. If an investor invests in a lot of property, his/her credit score can plummet simply due to the number of loans they carry. Therefore, the properties that could be obtained for an advantageous price may not meet conventional banking criteria. Whatever the case, hard money lenders are not restricted in the same way that conventional banks are and borrowers can collateralize assets to get funding immediately. Hard money lenders can lend money fast. Typically, financing for real estate can take anywhere from two to six months to be completed by conventional banks and lenders. Hard money lenders can generally fund in two weeks or less from th
