Hard Money Construction Loans: An Alternative Financing Option
What are Hard Money Construction Loans?
As a construction professional, securing financing for a project can be challenging. Traditional lenders may have stringent requirements that disqualify many borrowers. That’s where hard money loans come in. These loans are an alternative financing option that can be used to fund construction projects when traditional lending isn’t an option.
How Do These Loans Work?
A hard money construction loan is a type of loan that is typically used for real estate investments, fix-and-flip projects, and construction projects. Unlike traditional loans, these loans are secured by the property’s value rather than the borrower’s credit history. This makes them an ideal financing option for borrowers who may not meet the requirements for traditional loans.
These type of construction loans typically have higher interest rates than traditional loans. This is because they are considered a higher risk for lenders. However, the approval process is usually faster and more flexible than traditional lending. This makes it an attractive option for construction projects with tight timelines or borrowers who may have been turned down by traditional lenders. One of the main advantages of these types construction loans is that they can be used for a variety of construction projects. This includes residential, commercial, and industrial projects. They can also be used for land purchases and development, making them a flexible financing option for many construction professionals.
The Tier Group Can Help You Secure a Hard Money Construction Loan
At The Tier Group, we work with a network of specialty lenders to help connect construction professionals with the most appropriate financial product for their needs. Our specialists can help you explore different types of construction loan options and determine which is the the right choice for your project.
A Case Study
One of the main success stories at The Tier Group is John, a contractor who was looking to renovate a commercial property. John had been turned down by traditional lenders due to his credit history, but he had a solid plan for the renovation and knew he could complete the project successfully. John reached out to The Tier Group for assistance in finding a lender who could provide him with a hard money construction loan. Our specialists were able to connect him with a lender who saw the potential in his project and was willing to provide the financing he needed. With the help of the HM loan, John was able to complete the renovation on time and on budget, and the property is now fully leased to tenants.
Specialty loans are a valuable financing option for construction professionals who may not meet the requirements for traditional loans. With the help of The Tier Group’s network of specialty lenders, you can explore your options and determine this loan is the right choice for your next project. Contact us today to speak with one of our specialists and take the first step towards securing the financing you need to succeed.