The effects of the COVID-19 pandemic on the national as well as the global economy are still unfolding. However, it’s becoming more evident than ever that businesses need to show agility to survive the short-term shocks in this market, the pandemic fueled economic recession, and sped-up structural changes that have been a long time coming.
The enforced lockdowns to contain the virus spread have disrupted the business activity of commercial real estate businesses. This includes delays in construction starts and completions as well. However, after the challenging second quarter of 2020, the investment activity in commercial real estate started showing signs of recovery in the third quarter.
If you haven’t considered it already, hard money loans are a great alternative solution for commercial real estate businesses during tough times. Here are three ways hard money loans from private money lenders can help your CRE business.
1. They’re Ideal for Beginners
If you’re just starting, it’s very much likely that you don’t have an extensive portfolio of assets that will let you qualify for a traditional bank loan. Furthermore, if you have just dipped your toes in the waters of commercial real estate and you need a loan to acquire a property, hard money loans are a great way to seize investment opportunities.
Sometimes, investment opportunities in the world of real estate come and go very quickly, which is why you simply don’t have the time to wait for a lengthy application process. Hard money loans can be a great way to start your career in commercial real estate.
2. You Can Use Them as Bridge Loans
Hard money loans don’t necessarily need to be used for investment purposes, but they can also serve as bridge loans. For example, you can use the hard money loan for business development to be able to eventually qualify for a bank loan.
Once you get the bank loan, you can repay the hard money loan. In other words, it can serve as a bridge loan to help you chart the best course for your commercial real estate business.
3. Use Your Collateral Instead of Credit History
Office vacancy rates were at 16.4% in the US during the first quarter of 2021. Similarly, retail vacancy rates in the US were at 20% last year. During such tough times, it’s highly plausible that commercial real estate businesses may need loans to get by.
However, businesses that don’t have much credit history can suffer applying for traditional loans. Instead, a hard money loan will serve you better as you can use your income-creating collateral.
Get Hard Money Loans in California, Texas, and Nevada With GCP Fund
Global Capital Partners Fund offers bridge and hard money loans all over the US. They offer commercial real estate financing in various locations in the US. So, if you’re looking for a hard money lender in Colorado or commercial lenders in Utah, give GCP Fund a call.