Finding a company willing to offer you a hard money loan is not always easy. Trust us, we know! That’s why we started this website in the first place. We spent days searching for a reputable hard money lender in California, only to discover that many have strict restrictions, while others fail to deliver. We’re here to save you some time so you can better prepare yourself for finding a lender. As always, you want to narrow 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 must also fit the bill regarding finance charges and lending terms. Let’s get into what you must do to increase your odds of getting a private loan.
Know what you bring to the table in terms of a good hard money lending applicant.
Most people don’t appreciate that they are good candidates for most companies that provide hard money loans on our list. Start with the mindset that whichever company you apply to will want your business. Detail your project’s benefits 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 offer 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 ever taken out a private money loan? If so, explain that the loan was paid back in full and touch on the benefits of the first transaction. 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 listed in our directory will review your loan application. Oddly, they will find what you’re hiding if you’re not truthful. Some things may seem like a big deal, but they won’t matter.
Take your credit score, for example. Bad credit can be a significant issue when applying for a traditional home mortgage loan. With this financing, your creditworthiness is essential. A hard money loan, however, doesn’t necessarily consider your credit score. 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 critical and overlooked tip we can give you. Most people will search online and fire off applications with the first few lenders. While the application process may seem simple, many companies can’t fund your loan within one business day.
Here are a few essential questions to ask yourself before applying with a lender. Is this company even licensed in the state of California? It’s easy to look up this information and you can move on quickly once you find out they have an active license. Please do this before anything else as it can save you the time and hassle of working with a company not licensed in California. Can this company provide the loan terms that I’m looking for? A question like this seems simple, but a lot more 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 dig to verify what they promise. Most private money lenders will have a terms page that details exactly what they can offer regarding expected rates for a hard money loan, payment options, and loan amounts.
Another resource is sites that rate financial companies and take comments and feedback from previous clients. Consider what previous clients have said about any company you consider working with. While this site features a list of private money lenders, we don’t rate or provide detailed feedback on any specific companies. You are best served to do some research on your own. Begin by reviewing individual comments and feedback for various 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.