Determining that you need a loan is merely “step number one.” But as a business owner, you’ll need to be prepared to take many more steps towards selecting the type of loan you need and then going through the loan approval process. With all commercial hard money loans, there are advantages and disadvantages, and certain loans may suit your company’s needs more than others so it’s important to take some time to research the various types of loans or speak with a professional lender who can help advise you on what type of loans would be best for you and your business needs.
Two very common loans are secured and unsecured. They are the same in many ways; however, they also have some important differences. A secure loan, for example, is typically associated with a larger loan sum than an unsecured loan, and this is based on the amount of collateral that a business has to put up to back the loan. In the case of a secure loan, you can use collateral, or your company’s assets to obtain or “secure” your ability to repay the loan. If you are unable to pay the loan back, you could lose your collateral to the lender. Assets can be business equipment, a vehicle or even your home. Secure loans are often more flexible due to this reason. Because there is less risk involved with this type of loan, interest rates are typically lower than with an unsecured loan, and include options such as fixed or variable.
If you do not have any collateral to put up, you may need to seek unsecured commercial hard money loans. Without having collateral to back the loan, the lender assumes a higher risk. Because of this, unsecured loans typically are associated with higher interest rates and have a fixed (and sometimes rigid) repayment schedule. There is usually a timeframe for when the loan must be paid back within. However, one upside is that these loans are typically approved much more quickly than secured loans.
Sometimes it’s just a matter of speaking with an expert on a topic to help you determine which loan is best suited for your business. There are also a few questions you can ask yourself to help you determine your needs – do you need a large sum of money? Are you in need of cash fast? Do you have something of value to put on the line as collateral? These are all things to consider and in these answers, you are likely to see which loan is best for you.
Research professional lenders that are experienced in the type of loan you desire, and also the type of business you are building or expanding. Having someone to help guide you through the loan process can make the entire process much more smooth and much less stressful.
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.