Traditional commercial lenders are often constrained by government regulations and concerns regarding the health of their lending portfolio, leaving some developers and entrepreneurs in certain sectors in commercial real estate unable to obtain the capital they need either due to a total rejection or a partial loan that does not cover the required capital. Many in this predicament are turning to alternative lenders. One such lender offers merchant cash advances. These types of loans are usually taken on by businesses to get them through their non-peak season or to allow them to purchase needed equipment or inventory. Unfortunately, these can come at a high price. These types of loans are set up so that the commercial lenders take a percentage of the daily sales until they have recouped the loan amount and interest which can often be as high as 50 percent.
Other alternative commercial lenders include online lenders that use peer-to-peer lending. These types of loans are usually short-term, right around three years, and the interest rates range from approximately 10 to 25 percent. These types of alternative lenders usually provide smaller loan amounts. Larger amounts in the $250,000 range may have shorter terms and higher interest rates that range from 20 to 40 percent.
Crowdfunding for commercial real estate projects is another avenue that developers are looking into. In 2014, over $1 billion was provided to borrowers in commercial real estate. In 2015, that number doubled to $2.1 billion with up to a 100 percent growth rate expected. These platforms allow individual investors to group together in order to invest in projects that they would normally not have enough capital to participate in. This is good for both investors who wish to expand their portfolio and borrowers who find the increasing competition leading to better terms and rates.
Private hard money lenders are individuals or groups that provide commercial loans based predominantly on the hard-asset or collateral. Because they are not subject to traditional credit guidelines, they can fund in record-time and place more emphasis on the asset and less on a borrower’s creditworthiness. Most investors have at least one private hard money lender that they turn to when immediate capital is required.
We are a trusted source of funding that real estate investors turn to for multiple projects. We work with hundreds or private hard money lenders, giving us the advantage when finding capital for a particular project at the best rate and terms. We have a high loan-to-value up to 90 percent, offer interest-only payments, and can offer flexible terms from 3 months to 5 years. Call us for a no-obligation quote.
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.