It’s not always simple to find a company that’s willing to provide you funds for a hard money loan. Trust us, we know! That’s why we started this website in the first place. We spent days looking for a decent hard money lender in California only to find out that many have tough restrictions, while others don’t deliver. We’re here to save you some time so you can better prepare yourself for the process of finding a lender. As always, you want to narrow down your search to 2 or 3 companies that fit your needs. These companies need to be licensed in your state. Most hard money lenders in our directory have a lending license in California. They will also need to fit the bill in terms of finance charges and lending terms. Let’s get into what you need to do to better increase your odds of getting a private money loan.
Know what you bring to the table in terms of a good hard money lending applicant
Most people don’t appreciate the fact that they are good candidates for most companies that provide hard money loans on our list. Start with the mindset that whichever company you’re applying with will want your business. Detail all the benefits of your project and personal financial situation on your loan application. Be sure to explain the future revenues of your project or non-owner-occupied dwelling. Just because a site says you can only borrow up to 50% of equity doesn’t mean the terms are set in stone. Explain to the company what you can bring to the table in terms of your business or project.
If you have cash reserves or other successful projects in the past you will want to bring up those examples. Have you taken out a private money loan in the past? If so, be sure to explain that the loan was paid back in full and touch on the benefits of the first transaction. Definitely sell yourself and your company to the prospective hard money lender, but don’t be shy. There are many local hard money loan companies and they’re all competing for your business!
Know what your downfalls are as an applicant
This is the opposite of the tip above. Much the same as knowing what qualifications you have, it’s important to know what the limits are. Don’t hide or refuse to disclose issues that may lead to your lending application being declined. Most private money lenders shown in our list will do research into your loan application. Odds are, they will find what you’re hiding if you’re not being truthful. Some things may seem like a big deal but it turns out they won’t matter.
Take your credit score for example. Having bad credit will be a big problem when it comes to applying for a traditional home mortgage loan. With this type of financing your creditworthiness is important. A hard money loan, however, doesn’t necessarily take your credit score into consideration. Instead, you’re putting up your future project revenue as collateral. This is more important to most lenders as it ensures they have a source of revenue if you can no longer make timely payments.
Do research on the best hard money companies
This is the most important and most overlooked tip that we can give you. Most people will do a google search and fire off applications with the first few lenders they come across. While the application process seems simple and straightforward, there are many companies that simply can’t deliver when it comes time to fund.
Here are a few important questions you want to ask yourself before you apply with a lender. Is this company even licensed in California? It’s easy to look up this information and you can move on quickly once you find out they have an active license. Do this before anything else as it can save you the time and hassle of working with a company that’s not licensed in California. Can this company provide the loan terms that I’m looking for? A question like this seems simple, but there’s a lot more that goes into the loan they provide for you. Most hard money lenders will promise the world when it comes to what they say on their homepage. It’s up to you to do some digging to verify what they promise. Most private money lenders will have a terms page that details exactly what they can offer in terms of expected rates for a hard money loan, payment options, and loan amounts.
Another resource available to you is sites that rate financial companies and take comments and feedback from previous clients. Spend some time looking into what previous clients have said about any company you consider working with. While this site has a private money lender list, we don’t really rate or give detailed feedback on any specific companies. You are best served to do some research on your own. Start by looking at individual reviews and comments for different services. Taking out this type of high interest financing is a serious commitment. You want to do everything possible to put yourself in the best financial position.