Commercial Hard Money Loans - Three Business Scenarios

The primary rationale for a business considering a commercial hard money
loan is that traditional commercial financing options are not viable. There
are three financing options for most commercial real estate scenarios:
traditional banks, intermediate lenders and hard money lenders. In those
situations where traditional banks and intermediate lenders both say "NO",
it then makes good business sense to explore under what terms a hard money
commercial loan might be available.

Many viable business projects can be funded ONLY via a hard money lender.
Before accepting "NO" from the traditional banks and intermediate lenders as
the "FINAL ANSWER", a prudent small business borrower should determine if a
hard money lender will say "YES".

Compared to traditional bank business loans, commercial hard money loans
will generally involve a higher interest rate (prevailing range of prime
rate plus 4-8% for typical scenarios), higher fees and shorter-term
financing (one to three years). However, because many hard money loans offer
interest only terms, the payments can be lower than a fully-amortized loan
with a lower interest rate. Commercial hard money loans are typically
completed more quickly than a traditional commercial loan.

Several common commercial financing scenarios using hard money loans are
described below.

COMMERCIAL HARD MONEY LOAN SCENARIO # 1:
Need to Obtain Commercial Financing Quickly

Traditional commercial loans will normally require several months to
complete. Hard money loans can be obtained within a few days in some
situations. This difference will be critical if commercial financing is
required within a short time frame.

COMMERCIAL HARD MONEY LOAN SCENARIO # 2:
Special Small Business Situations Not Easily Understood by Traditional Banks

. Foreclosure
. Bankruptcy
. Special Purpose Properties
. Tax Liens
. Losses
. Negative Net Worth
. Less than one year in business
. Environmental Requirements

COMMERCIAL HARD MONEY LOAN SCENARIO # 3:
Low Credit Scores

Most traditional commercial loans have very strict standards for acceptable
credit scores by the guarantors for a commercial real estate loan. Hard
money loans are much more flexible and low credit scores are acceptable.

As noted above, there are several common business situations in which a
commercial hard money loan should be considered as a viable commercial
financing option. The Commercial Mortgage Loans Guide ( http://aexcfgllc.com
) and The Credit Card Receivables Guide ( http://aexcfg.com ) will provide
additional insights into viable commercial financing strategies for
difficult commercial loan scenarios.

Copyright 2005-2006 AEX Commercial Financing Group, LLC. All Rights
Reserved.

About The Author: Stephen Bush provides commercial financing assistance
throughout the United States and focuses on more difficult commercial loans.
Steve is the Chief Executive Officer of AEX Commercial Financing Group, LLC
( http://aexcommercialfinancing.com ) in Ohio. His toll-free number is (888)
593-3951.