You may have the perfect vision, direction, and drive, but are you seeking a more effective solution to your commercial real estate funding needs? Seeking a trustworthy private money lending company can help increase your next venture’s speed, efficiency, and success.
At Texas Funding, we specialize in hard money loans. This means that we offer loans with quick turnaround times that are based on high equity and minimal qualification requirements. In this blog, we want to demystify private money lending and give you the empowerment to reach your goals.
What is Private Money Lending for Commercial Real Estate?
Private money loans, often called hard money loans, are short-term loans that are commonly used for commercial real estate construction projects or other projects with a clearly defined timeline, budget, and plan. These loans are typically equity-based – this means that by giving the loan company collateral in your real estate, credit scores and income are less important for securing the loan. What makes hard money loans unique is that they place a high value on a project’s property and potential success, rather than on the borrowers’ pasts or personal income.
The most traditional way to finance a commercial project is through a bank. However, this route can lead to various obstacles, delays, and budget constraints. These loans can not only be hard to maintain due to rigid loan terms and decreased flexibility, but they can also be incredibly difficult to be approved for. Traditional bank loans often have a lengthy and complex underwriting process, which means you could wait weeks or even months for your project’s loan.
The Difference Between Traditional Financing and Hard Money Loans
In contrast, private money lending can be an agile and accessible alternative for your commercial real estate venture. At Texas Funding, we prioritize our borrowers’ experience and want to make sure we can offer the most suitable loan for you and your project. Some of the most impactful benefits of hard money lending with Texas funding include:
- Speed and Efficiency – Our process is ultra-streamlined with a tight turnaround for loan approvals and funding. We understand that the commercial real estate market is dynamic and never stops moving, so opting for hard money loans through Texas Funding is crucial for getting your project underway as quickly as possible. This can help you capitalize on time-sensitive opportunities.
- Flexible Terms – Private money loans are typically more customizable than traditional bank loans. Factors like property type and the loan’s duration can allow for interest rate or installment negotiations, offering you a solution that fits your project like a glove.
- Industry Expertise – Our team at Texas Funding has over 35 years of experience in the real estate industry. Because of our expertise, we can precisely estimate your project’s potential success and offer invaluable, strategic advice for your financing options. We’re here to guide you every step of the way.
At Texas Funding, we understand what you need to achieve a fast, efficient, and seamless commercial real estate project. Our team will guide you through the hard money lending process, instilling confidence in you every step of the way.
Choosing the Right Type of Private Money Loan for Your Commercial Project
There are several types of private money loans that we might offer for a variety of different types of commercial real estate funding services. Aside from a typical hard money loan, which stands out for its short-term, asset-based process, there are several other types to be aware of:
- Bridge loans are also short-term loans. However, what makes them different is that we offer them in situations where projects need a quick way to “bridge” the gap between the purchase of a property and the selling of another one. These can help in situations where projects become delayed or have setbacks that need financial supplementation. These loans are ideal for fast-turnaround situations where efficient timing is a priority.
- Gap financing is a private money loan for a specific missing aspect of a project’s funding. Whether it be a previous budgeting miscalculation or perhaps an unexpected obstacle you encountered, this option is helpful for emergency scenarios when a project is already underway.
- Stated income loans mean we accept borrowers with non-traditional income. The flexibility in income verification allows for self-employed borrowers to seek alternative lending services for their ventures, making financing more accessible for all types of borrowers.
Since 1982, our team has been able to learn the ins and outs of the hard money lending industry, and we are confident that we can find the perfect solution for you and your next project. Let us help you solve your unique financing puzzle.
Your Pathway to Private Commercial Project Funding
Our job at Texas Funding is to empower our borrowers with the financial support they need for a triumphant project. We have tailored the process for getting a commercial private money loan over the years to make acquiring a loan as straightforward and streamlined as possible. Here are the steps we encourage to get the most out of your private money lending experience:
Failing to Plan means Planning to Fail
The first, and arguably most important step in securing a loan is defining your specific needs in a compelling, clearly organized outline. Within this outline, be sure to include your project’s complete funding requirements, acquisition costs, holding costs, or any other expenses you believe could arise.
Within this document, our team wants to see a preview of your overall project expectation and the strategy you plan on using to make it happen. This portion needs to feature projected timelines and expected returns. This portion of the process acts as the foundation for your private money lending experiences.
Creating Your Custom Finance Solution
The team at Texas Funding strives to provide our clients with straightforward, honest communication from start to finish of the borrowing experience. The next step in our funding process is our team presenting to you our private money loan proposal for your project. This will include our interest rate offer, fees, loan terms, and payment schedules.
From here, we welcome collaborative, open communication to discuss any concerns or specific needs you may want to negotiate into our agreement. This step in the process is crucial, as it ensures that the decided-upon loan is mutually beneficial and a positive experience for both parties.
The Last Lap: Finalizing Your Commercial Private Loan Agreement
Before you sign the dotted line, our team will be sure you understand all aspects of the document and feel truly confident in your decision to borrow a private money loan from Texas Funding. We also always recommend that you let your own project’s legal team examine the document for any oversight before the loan is finalized.
Make Your Vision a Reality with Texas Funding
Commercial real estate is a constantly evolving, fast-paced industry, so finding flexible, innovative funding options for your projects is vital. Private money lending can offer flexible terms, quick turnarounds, and a partnership mentality that gives you complete confidence in your financial position. We are fully committed to helping you unlock your project’s full potential. Let us help you strategize today.
Contact us today and get your commercial real estate funding fast!