A hard money loan is a form of financing that requires pledging collateral in order to receive the funding. In many cases, this type of loan is offered by a group of private investors rather than a traditional banking institution. There are times when seeking out a person or group in specific hard money lender service areas makes a lot of sense. Here are a few examples of when you would want to seek this type of financial arrangement.
You Need Money to Pay Off Back Taxes
The tax authorities have made it known that you owe a significant amount of back taxes. The problem is that you don’t have the cash to pay off the debt. While you could work with the authorities to come up with a payment plan, the penalties and interest will inflate the debt considerably.
Opting for a hard money loan using an acceptable asset as security is a better way to deal with the debt. The interest rate will be more competitive and you don’t have to worry about additional fees and penalties being assessed every month. Best of all, there is no chance of your wages being garnished and your employer finding out that you owe those back taxes.
You’re Flipping a Property
You’ve found a distressed property in a desirable location. With some updates and repairs, it should generate quite a profit. The only problem is that you don’t have money for the purchase or the repairs.
Since the property happens to reside in one of the local hard money lender service areas, approach a lender and outline your plan. Assuming the lender sees the potential to flip the property as a good risk, you could have the money in hand in a matter of days.
You’re Facing Foreclosure
You’ve had some financial difficulties over the last couple of years and still have one more to face. With the mortgage company about to foreclose on the home, seeking a hard money loan makes sense. While traditional bankers are unlikely to help, the right hard money lender will look past the immediate state of your credit and focus more on what you’ve been doing to get back on an even financial keel. If the lender believes you are heading in the right direction, the money to avoid foreclosure will be yours.
You Need Investment Capital to Get In On a Great Deal
There’s an opportunity to get in on a great investment, but you don’t have the cash to participate. The proceeds from a hard money loan could be the answer. Depending on the lender’s perception of the deal, you could have the money in no time. Make sure you can repay the debt even if the investment turns out to not do as well as you hoped.
There are more reasons to seek financing in hard money lender service areas. If you think this type of financing would be best, talk with lender today. You could have the cash needed a lot sooner than you expected.