If we had a dime every time that we heard hard money borrowers are desperate people who are in financial trouble and have no way out, we would be a lot wealthier than we are. This is one of the most pervasive myths about our industry. But it is simply not true. We lend to people with financial needs that do not fit neatly in a box.

That box is the system, and all its parameters, established by traditional lenders. We have nothing against traditional lenders and what they do. But their system is very rigid. Their obvious lack of flexibility just doesn’t work for certain types of borrowers facing unusual circumstances. Hard money loans are different. It is flexible enough to meet needs outside the traditional lending box.

Financially Successful Individuals

Far from being desperate and in financial straits, the vast majority of our borrowers are financially successful individuals with strong track records. They know their businesses inside and out. They know how to make money, how to fund the deals they are working on, and how to make good borrowing decisions. They trust us and we trust them.

Looking at it from another perspective, it would be bad business on our part to loan to desperate people who may not have the financial means to repay. So no, hard money lenders are not throwing money around. We don’t lend to just anyone who wants to apply.

Some Borrowers Struggle With Traditional Loans

The fact of the matter is that some borrowers struggle with traditional loans even though they have solid financial records. Traditional lenders rely on a whole host of criteria to make approval decisions. They look at everything from personal finances to debt-to-income ratios and a borrower’s good faith and credit.

Looking into every detail of a borrower’s life can make it difficult for that person to conform to the box-like structure. It is not that they don’t have the means to repay. It’s that they don’t have the means to satisfy the lender’s criteria. It is a significant difference.

Collateral Allows for Flexibility

Hard money lenders like Actium Partners are more flexible. We can work with circumstances considered outside of the box for one simple reason: we make approval decisions based primarily on collateral. The strength of the borrower’s collateral matters more than anything else.

You might be looking to buy a piece of commercial property for investment purposes. A traditional lender is asking for documentation you cannot provide. Your company also doesn’t have a long track record a lender can look at to prove creditworthiness. Yet the property you are hoping to acquire has tremendous value.

You are probably going to struggle to fit inside a traditional lender’s box. But if the target property is worth enough, getting a hard money loan is likely going to be a lot easier. There is no box to conform to. There isn’t a long list of criteria you need to meet to get approved.

Let’s See What We Can Do

We are betting that you have read this far because you’ve already had experience with traditional lenders lacking the flexibility to help you. We get it. Traditional lenders do what they do for very good reasons. We are okay with that. But we do what we do for different reasons.

If you’ve considered a hard money loan as an alternative to traditional funding, reach out to Actium Partners today. Let us get together and see what we can do to meet your immediate financing needs. We offer hard money and bridge loans to borrowers whose needs don’t fit inside the box.