Why Are Hard Money Loans Gaining Popularity?

Why Are Hard Money Loans Gaining Popularity?

Hard money loans, also known as private loans, are very popular amongst small business owners, entrepreneurs, and investors.

People with poor credit records can also easily avail hard money loans with ease. These loans do not come with the strict conditions that are imposed by banks on conventional loans and they can conveniently be secured by pledging real estate property as collateral.

The popularity of hard money loans is rapidly increasing these days and they are being availed by borrowers for all kinds of purposes. Some of the major factors behind the rising popularity of hard money loans are listed below.

Factors contributing to the popularity of hard money loans

·         They benefit both the parties involved

Hard money loans are borrowed on a short to medium term basis and yield attractive financial benefits for both lenders and borrowers. Hard money lenders earn profits by providing private loans for short durations without taking any real risk. The collateral pledged by the borrower covers the entire loan amount and can be sold off by the lender if the borrower is unable to repay his/her debt.

On the other hand, borrowers can quickly access funds to make timely investments in viable business opportunities to gain substantial profits. In this way, both the lender and borrower walk away with positive gains and it results in a win-win situation for everyone.

·         A reliable funding option

Banks hesitate to lend to borrowers who have defaulted on their loans in the past or have poor credit scores. For such business people, hard money loans are the only option.

Hard moneylenders do not consider the financial track record of the borrowers and lend to almost anyone who can provide a valuable asset as collateral. This enables all kinds of investors and entrepreneurs to secure much needed funds to invest in lucrative projects.

·         Quick access to funds

Borrowers don’t have to wait too long to secure hard money loans. Private capital lenders provide hard money loans at very short notice and, in some cases, the loans are transferred directly to the accounts of the borrowers on the same day they submit their loan applications.

·         Lower LTV ratio

The Loan-To-Value (LTV) ratio presents the fraction of the loan amount offered by the moneylenders to the value of the property that is being bought and kept as collateral.

Hard money lenders provide loans with a significantly lesser LTV ratio than conventional loans. This minimizes the risks factor involved in lending money and encourages private business people to grant loans without having to fear about potential losses.

This is the reason why more and more wealthy investors and business people are willing to provide hard money loans on very short notice. The low LTV ration eliminates the need of conducting background checks to validate the financial health of the borrowers.

GCP Fund Ltd. is a well-known provider of hard money loans to individuals and companies seeking to invest in New York and Midwestern states, like Kansas and Missouri.

Our company also offers commercial financing for acquisition, land development loans, and interim construction loans at competitive interest rates.

To learn more about our services, call 1-800-514-7350, or send us an email at contact@gcpfund.com.

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