You need to know who to go to find money for your business. You believe in your business but now you need to find an interested money lender who believes in it too. You know a bridge-loan or a hard money lender is the perfect solution for the influx of capital you need.
This article will provide you with information on the hard money lender criteria and process. If you want to know how lending and investors work, the below article will let you know. When you have questions about being an entrepreneur in this competitive business world, or just need a bridge loan for your business needs connect with us anytime.
Differences Between Private Lenders and Hard Money Lenders
Private money lenders are private investors. They can be difficult to find as most of them don’t advertise. Most of the time you find private money lenders through a professional network or peer. Private money lenders offer you more power to negotiate your loan terms for the deal. But attorneys are often involved unless you know your way around term sheets and contract obligations.
A hard money lender is defined as a short-term bridge loan funder. A good deal of hard money lending is used in real estate transactions, you may just not realize it. In hard money or bridge-loans there is higher risk for lenders so sometimes the loans have higher interest rates or payoffs. But these lenders also provide you with faster access to the capital you need. What’s more, they have a less stringent application process with flexible repayment schedules.
Right now is a great time to go after business funding. The economy continues to be healthy so there are more funding vehicles being created daily. We are going to go over some secrets to finding interested funders who want to learn more about your business or funding needs.
The world used to be divided into private funders, hard money lenders, bank loan lenders, and loan sharks. All these groups had funding, and all were usually interested in speaking to you. Each group had its own reasons for wanting to lend you money. They also had their own respective criteria on what risks they would take.
There is no steadfast investment formula followed anymore by those who have money to fund projects, businesses, and dreams. If you are bold enough to have the vision with a concrete plan behind it, you may find a funder willing to listen.
Secrets to Finding Interested Money
There are bridge loan and hard money lenders interested in speaking to you today. The truth is that bridge loan notes are used all the time by businesses. Many times, businesses today use hard money loans as their first infusion of dollars raised. Funders are doing it that way because it’s easier to negotiate the terms of a bridge loan than determine the value of a startup.
For a business or entity to run out of cash and need an influx of capital is not uncommon. “Founders have too much confidence in their business model, too little ability to forecast their burn rate, and too little willingness to give up equity.” Deepak Malhotra, Harvard Business Review. The businesses end result maybe it fails altogether.
Hard money lenders trust the relationship and put a premium on trust. If you want to find a funder interested in you and your product or service than a hard money lender is the place to go. But just like angel investments or bank loans there is a process and once you’ve settled on the terms of the loan, it’s important to sometimes remember you are creating a long-term partnership. Honor the loan and the lender, and the lender will respect you back.
You never burn any financial bridge when you are in business for yourself. You never know when you may need funding or an influx of capital again. In the end, it doesn’t matter where you are getting your funding from, if the terms of the loan work for you. It is never too late to own your dream and find the interested money funder you need to make your dream a reality. Reach out to us today, and we will help you find what road leads you to your future. https://hbr.org/2013/05/how-to-negotiate-with-vcs