Commercial lenders offer a variety of mortgage-backed loans for commercial real-estate property.
2004-08-02
How Commercial Lenders Differ from Banks
Banks have stricter lending criteria than most commercial lenders and are more focused on serving the private residential market. Commercial lenders, specifically hard money commercial lenders require far less in the way of financial qualifications from the borrower and base their lending criteria on the value of the property being mortgaged.
Hard money commercial lenders specialize in bridge loans for commercial property. Commercial lenders close loans quickly – sometimes in as little as two weeks and are often used to avoid foreclosures or other problems, or take advantage of a time-sensitive opportunity. It is important to note here that many hard money commercial brokers pose as commercial lenders, which can lead to longer close times. Once you submit your loan package to a broker, rather than a direct lender, you may find that your ‘loan package’ or ‘loan request’ is not being reviewed by the company you submitted it to. Rather, the broker is now sending it to direct lenders in hopes of finding a direct commercial lender who is interested in funding your loan.
Cost of Commercial Lenders
Banks generally charge the lowest mortgage rates for commercial loans. However, if a commercial property requires an infusion of cash for growth, development, to avoid disaster, buy out a partner or any number of other reasons, and the loan parameters do not fit the bank requirements or ‘sweet spot’, a non-conforming commercial loan is in order. Commercial lenders have far broader leeway about the type of commercial loans they will entertain and they charge appropriately higher interest rates and points to account for the higher risk. As mentioned above, hard money commercial lenders weight the equity and value of the property very heavily, providing borrowers with the most flexibility and the highest rates. Since many hard money commercial loans are used as bridge loans, the higher rates may be a small trade off for the ability to avoid disaster or take advantage an extraordinary, but time sensitive opportunity.
Working directly with Commercial Lenders
The two strongest advantages for working directly with a hard money commercial lender is lower costs and, in some cases, faster closing times. Brokers are able to provide you with assistance in completing the loan application, organizing your loan request well, and will have access to one or more direct lenders. If your broker has access to more than one lender, s/he may be able to select the best lender for your request. Brokers charge a fee for their services in the form of points, generally ranging from 1-3 points. You can save this money by working directly with a commercial lender.
Advantages of Hard Money Loans from Avatar Financial Group
Hard money loans cost less at Avatar
Avatar Financial Group is an institutionally funded REIT (real estate investment trust). We are not brokers. Since you will not have to pay additional points to brokers and sub-brokers, your hard money loan will cost less.
Hard money loans fund faster at Avatar Financial Group
Avatar Financial Group has the money to fund projects – we do not have to ask investors; we do not need to call around to funding institutions. Brokering a loan takes time. You can avoid that wasted time by going direct to the funding source.
Hard money loans are less complicated with Avatar Financial Group
With Avatar, you know where you stand. We make the funding decision ourselves. If we express interest, you have the decision of the funding institution. We have nothing to gain by ‘stringing you along’ in hopes of finding a funding solution elsewhere. If your loan request fits our company. If we need more information or explanations, we will communicate directly with you. Direct communication is better communication and results in faster, more efficient funding.
Hard money does not mean harsh manners
One of the most common complaints from borrowers of hard money concerns the service they receive from their brokers/lenders. In an industry rife with poor manners and poor service, Avatar Financial Group enjoys a reputation for expertise coupled with civility, professionalism, and personal care. You’ll find working with Avatar Financial Group a refreshing change from ‘business as usual.’
If you or your firm is interested in obtaining a quote for a hard money loan, please contact Avatar Financial Group toll free at 888.896.0078 or submit your loan online and get a response within 24 hours. We will review your request immediately and make a determination about funding your project and the costs involved without delay. There is no obligation; we are not brokers. If we move forward, Avatar Financial Group will be the funding source for your project.
Banks have stricter lending criteria than most commercial lenders and are more focused on serving the private residential market. Commercial lenders, specifically hard money commercial lenders require far less in the way of financial qualifications from the borrower and base their lending criteria on the value of the property being mortgaged.
Hard money commercial lenders specialize in bridge loans for commercial property. Commercial lenders close loans quickly – sometimes in as little as two weeks and are often used to avoid foreclosures or other problems, or take advantage of a time-sensitive opportunity. It is important to note here that many hard money commercial brokers pose as commercial lenders, which can lead to longer close times. Once you submit your loan package to a broker, rather than a direct lender, you may find that your ‘loan package’ or ‘loan request’ is not being reviewed by the company you submitted it to. Rather, the broker is now sending it to direct lenders in hopes of finding a direct commercial lender who is interested in funding your loan.
Cost of Commercial Lenders
Banks generally charge the lowest mortgage rates for commercial loans. However, if a commercial property requires an infusion of cash for growth, development, to avoid disaster, buy out a partner or any number of other reasons, and the loan parameters do not fit the bank requirements or ‘sweet spot’, a non-conforming commercial loan is in order. Commercial lenders have far broader leeway about the type of commercial loans they will entertain and they charge appropriately higher interest rates and points to account for the higher risk. As mentioned above, hard money commercial lenders weight the equity and value of the property very heavily, providing borrowers with the most flexibility and the highest rates. Since many hard money commercial loans are used as bridge loans, the higher rates may be a small trade off for the ability to avoid disaster or take advantage an extraordinary, but time sensitive opportunity.
Working directly with Commercial Lenders
The two strongest advantages for working directly with a hard money commercial lender is lower costs and, in some cases, faster closing times. Brokers are able to provide you with assistance in completing the loan application, organizing your loan request well, and will have access to one or more direct lenders. If your broker has access to more than one lender, s/he may be able to select the best lender for your request. Brokers charge a fee for their services in the form of points, generally ranging from 1-3 points. You can save this money by working directly with a commercial lender.
Advantages of Hard Money Loans from Avatar Financial Group
Hard money loans cost less at Avatar
Avatar Financial Group is an institutionally funded REIT (real estate investment trust). We are not brokers. Since you will not have to pay additional points to brokers and sub-brokers, your hard money loan will cost less.
Hard money loans fund faster at Avatar Financial Group
Avatar Financial Group has the money to fund projects – we do not have to ask investors; we do not need to call around to funding institutions. Brokering a loan takes time. You can avoid that wasted time by going direct to the funding source.
Hard money loans are less complicated with Avatar Financial Group
With Avatar, you know where you stand. We make the funding decision ourselves. If we express interest, you have the decision of the funding institution. We have nothing to gain by ‘stringing you along’ in hopes of finding a funding solution elsewhere. If your loan request fits our company. If we need more information or explanations, we will communicate directly with you. Direct communication is better communication and results in faster, more efficient funding.
Hard money does not mean harsh manners
One of the most common complaints from borrowers of hard money concerns the service they receive from their brokers/lenders. In an industry rife with poor manners and poor service, Avatar Financial Group enjoys a reputation for expertise coupled with civility, professionalism, and personal care. You’ll find working with Avatar Financial Group a refreshing change from ‘business as usual.’
If you or your firm is interested in obtaining a quote for a hard money loan, please contact Avatar Financial Group toll free at 888.896.0078 or submit your loan online and get a response within 24 hours. We will review your request immediately and make a determination about funding your project and the costs involved without delay. There is no obligation; we are not brokers. If we move forward, Avatar Financial Group will be the funding source for your project.
