You’ve heard the term “hard money lender,” but what does it mean? A hard money lender is someone who will lend you cash money fast so you can purchase an asset, but not like a bank. Also called an “asset-based lender” who “factors” loaning you money against the receivables in your business, the hard money lender cares more about the asset you’re buying than they do about you. Hey, it’s just business!
A traditional hard money lender in real estate is definitely more concerned in the house or building and the condition of that property. They want you to pay them back fast and with pretty high interest, but they can really help in a pinch. You can find them advertising everywhere online. However, you DON’T need them!
You can learn to raise private capital – as much as you’ll ever need for your deals – on your own and without turning to a hard money lender who charges really high interest.
Hi, Jay Massey here, with the Cash Flow Diary, and in this, I'm going to explain what is a hard money lender in two minutes or less.
So what is a hard money lender?
You probably heard the term a hard money lender in like…
What do they do and why does It matter? And all those types of things.
Well there are situations where their time she you just need cash you need it quick and you don't have the necessary qualifications to go to traditional lending sources like a bank.
For example if you happen to want to purchase a house in a very short period of time often speed of execution is key. And the primary thing that the lender, because the lender wants some sort of security most bank they want to take you know their personal guarantee, they check credit your history in the payments, and all those other things most hard money lenders or what they are also called asset based lenders.
Meaning, they care more about the actual property or item that you're using as an asset than they do you. so there are many different forms up hard money lenders sometimes they're called factors.
What did that mean?
Well simply someone who is giving you loaning you money against the receivables of your business.
This is one former being able to have an asset-based lender give you the cash you need for operational expenses etc.
Another form is the traditional hard money lender as it relates to real estate. This person is more concerned about the house or the building or whatever it is that you're planning on improving in some way shape or form, so that you can go out there execute your vision for that piece of real estate.
At the end of the day, again they care more about the asset than they do you. The quality of the asset is what they're looking at. Most of them can easily be found cuz they typically advertise in your local newspapers or simple Google search for asset-based or hard money lender will do.
Thanks for watching.
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