Even within the Texas Commercial Loans category of hard money, there are a variety of forms that loans can take. Knowing which is best for you and for which loans you are eligible will help you to maximize your hard money.

By now you likely know that it is difficult to get a hard money loan without some sort of security that is put forth by the borrower at the time of lending. While this can take many forms, the most highly accepted form of security is real estate. Lenders know that such an asset is not only not likely be quickly sold off, but it is also not likely to depreciate much over the course of the loan. This provides a great deal of stability.

With real estate as your basis for negotiation, there are a number of ways in which you can structure your Texas Commercial Loans. The first, and most likely for small business owners is the standard hard money loan. Essentially this a loan that is given to a business entity rather than a private individual. Although it might seem counter-intuitive, business entities are considered a higher risk borrower than private borrowers, as the business world is much more chaotic than many individual financial realities. These Texas Commercial Loans will often have a very short term (compared to traditional loans), which will most likely be a year at the most. This is acceptable to most businesses as they often use the loan to infuse the company with capital with the goal of ramping up profits, enabling them to quickly pay the loan back.

Another type of hard money loan is one in which the borrower does not deal directly with a lender. In cases like these, a broker will handle the loan. This might seem like an unnecessary cog in the wheel, but it can actually be very helpful. Usually, a broker will “shop around” so that you, as the borrower, do not have to. The drawback of this type of method is that the broker will charge a fee, in addition to the regular interest that you would be paying on the loan. The convenience, however, might be worth it to you.

If you are seeking out a Texas Commercial Loans to make property improvements, you are most likely looking for a fix and flip loan. This can be used for any type of property improvement, whether it be to an office building or a multi-family housing unit. Many borrowers use these types of Texas Commercial Loans to make drastic improvements on properties in preparation for an immediate sell. These borrowers will then use the profits from the property sale to repay the loan. This is, obviously, a great investment, if you are positive that the property will sell very quickly. If you are attempting to do a project of this nature with a hard money loan, ensure that there is no penalty for early repayment, as you will want to pay the loan back in full as soon as the sale is final to avoid interest charges.

How do I know which type of hard money Texas Commercial Loans is best for me?

It entirely depends on what you intend to do with it. If you are looking to infuse your business with capital to take ramp up sales, then a traditional loan is probably what you will need. However, if it is for the purposes of improvements to real estate to then sell, a fix and flip loan will work out wonderfully.