Speed is a hallmark of hard money lending. It is certainly something that Actium Lending is known for. But why is speed such a big deal? Why do our clients prefer approval and funding in a matter of days rather than weeks or months?

Let us start with the understanding that most of our clients are real estate investors. They are looking for commercial real estate that will enhance their portfolios. As borrowers, they are often under the gun to get financing arranged as quickly as possible.

If you are actively involved in real estate investing, you already know why fast funding matters. Otherwise, here are five legitimate reasons you might someday need fast funding for real estate:

1. Due Diligence Deadlines

Real estate investors are expected to do their due diligence before closing on a deal. That being said, most contracts strictly define the due diligence phase and its duration. It might be 30 days. But in some cases, the duration could be even shorter.

Investors need to be able to complete each step in the due diligence process as quickly as possible. This includes potentially lining up financing. Not completing things in a timely manner could mean waiving certain rights or even losing earnest money.

2. Competition Is Fierce

Competition in real estate investing is fierce. Deals often boil down to who can get to closing the fastest. Therefore, investors can rarely afford to wait on traditional lenders to do their thing. They need the fast funding hard money provides in order to close.

Hand-in-hand with competition is constantly changing market conditions. Everything from supply and demand to interest rates and broad economic indicators can affect a transaction’s value. Funding quickly and getting to closing eliminates the risk of changing conditions scuttling a deal.

3. Contractual Milestones

Some sales contracts include critical dates for certain milestones, like submitting earnest money. The milestone dates are often non-negotiable. Miss a deadline and you blow the deal. No real estate investor wants to lose out on a lucrative property after missing financing deadlines. So the sooner financing can be arranged, the better.

4. Sellers Can Be Impatient

In light of the previous three points, it is important to note that sellers can be impatient. They want to get properties sold so they can move on. It’s not unusual for a commercial seller to be unwilling to wait for more than 30 days. They expect to sign a contract and button things up quickly. If they need to wait too long, they may choose to back out.

5. Negotiation Dynamics Matter

Both seller and buyer want to maximize the deal to its fullest potential. Both are looking out for their best interests. Therefore, negotiation dynamics matter. Investors need every advantage so that they can go into negotiations with confidence and strength. Quick financing contributes to that.

An investor confident he can make it to closing in a matter of days has bargaining power. They might be able to command a lower price or ask for certain concessions. The faster they can close, the more leverage they have.

Speed is built into our DNA. It is one of the things that makes Actium Lending an industry leading hard money lender in Utah, Colorado, and Idaho.

If you are a real estate investor, you know how time sensitive deals can be. You also know that you don’t have time to wait on a traditional lender in order to get to closing. We can get you to closing faster with timely approvals and fast funding. Why not put us to the test?