Here at Actium Partners, we specialize in hard money and bridge loans for real estate. Our clients are located throughout Utah, Colorado, and Idaho. What we do for clients is pretty straightforward. However, if you are new to real estate investing, you might not be familiar with how hard money works. Allow us to explain.

Bridge loans are a type of hard money, so assume what you read here applies to them as well. Do not be afraid to contact us if you have any questions about how hard money might be able to help you achieve your financial goals. We are always looking for valuable projects we can get involved in.

Hard Money Lending Is Private Lending

The first thing to understand is that hard money lending is private lending. Hard money lenders are neither banks nor credit unions. We are privately owned companies seeking to lend to borrowers who either have no interest in dealing with traditional lenders or are working on projects that their normal lenders will not touch.

As private lenders, we are not subject to the same rules and regulations that apply to our traditional counterparts. Our industry is regulated differently. That means we can operate our businesses in ways that first-time borrowers often find refreshing. For example, we can work much more quickly than a traditional lender. We can approve and fund in days rather than months.

Approval Decisions Are Based on Assets

The next thing you need to know is that hard money lending decisions are based almost entirely on assets. Hard money lenders require borrowers to put up some sort of collateral along with their own down payments. Given that most of our loans go toward real estate transactions, the properties being obtained end up being the assets used as collateral.

Lenders are looking for assets with a high enough value to cover the amount being borrowed. Asset value, combined with down payment amount, protects both borrower and lender to ensure a profitable transaction.

A Simple and Straightforward Process

As for how one would go about getting a hard money or bridge loan, it’s simple and straightforward. The borrower contacts a lender to begin the application process. Applications and a limited amount of supporting documentation are completed and submitted.

Once received, the lender makes arrangements to have the borrower’s asset appraised. Some hard money lenders have appraisers on staff while others contract with local appraisal companies. Regardless, a strong appraisal showing enough value to satisfy the lender will usually mean approval. 

From there, it is a matter of drawing up the loan documents and getting them signed. Documentation and funding can be forwarded to a third-party, usually a title company, to complete the transaction and close the deal. There isn’t much to it. And because documentation requirements are so minimal, loans can be processed very quickly.

Rates and Terms Vary

One last thing to be aware of is that the rates and terms on hard money loans vary. Expect short terms ranging from 6 to 24 months. Some lenders will go a little bit longer if circumstances warrant, but rarely do hard money loans exceed the 24-month term. As for interest rates, expect them to be higher than what you would be offered by a traditional lender.

Clients who return to Actium Partners time and again do so because we work quickly and efficiently. We have money ready to be lent to borrowers working on valuable projects requiring fast access to sizable amounts of cash. Reach out to us with your proposal and let’s talk about it.