Hard Money Seconds for Business Purpose

By
Mortgage and Lending with All California Lending BRE# 01458390

I specialize in private money loans.  One niche that many people are not aware of is hard money seconds.  In this blog post I want to discuss hard money seconds for business purpose loans.

Many businesses are struggling right now.  While there is help available, it is not always going to be enough to keep a business afloat or to allow a business to take advantage of opportunity in this quickly changing environment.  Business owners who have seen their income reduced can have a difficult time obtaining funding through the banks.

While many business owners may own their own homes and have equity available, they may be unable to tap that equity due to their lack of document-able income over the past year.  Hard money seconds for business purposes, however, can help overcome that hurdle.

Business purpose hard money seconds are mainly concerned with the equity in a property.  For business owners looking to tap that equity for business purposes, these loans can allow short term access to funds while keeping existing loans that may be at great terms in place.  For business owners who have had income issues due to Covid, these hard money options can allow for an injection of capital that banks are not willing or able to provide.

Not only can these types of loans go in second position, but they can also go in third position.  They are a flexible tool that can be used to access capital now when it is needed.  Use the capital to pivot your existing business and take advantage of opportunities available, or use it to maintain your current business to get through the current market conditions.

These subordinate loans can be secured by most property throughout the state of California - with the exception of land.  Commercial property, residential property, industrial property - even owner occupied property.  They are a unique product, but not a long term option.  Rather they are typically structured as a 1-3 year term with interest only payments.  

Utilizing these types of loans properly can help improve cash flow and business operations now, with the long term strategy being to take out the short term loan with a bank loan at better terms once income levels have returned to normal.  With rates expected to continue to stay low, these types of loans may make sense to many business owners.

While the rates are not bank rates, they are typically better than credit card rates.  Being loan to value driven also means that the equity in a property will determine the amount of cash that can be generated utilizing one of these types of loans.  With property values generally increasing, it is not out of the question to be able to tap substantial loan amounts for business purposes.

For more information, please contact me today.  I'm happy to discuss the options that a private hard money second position loan can bring to your business.  You can also visit our website for more information about California hard money seconds.

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