What is the definition of a hard money or equity loan?

‘Hard money’, also referred to as equity loans, or private money loans, are asset based loans that are privately funded by individuals seeking security and substantial return on real estate loans. Traditional lending institutions, such as banks and credit unions, lend ‘soft money’, as opposed to the ‘hard money’ lending alternative SC Financial provides its clients who may have special equity loan requirements or previous credit problems, eliminating the option of conventional financing.

When is a Hard Money Loan an appropriate option?

Although poor credit history may be a common reason for a borrower to consider a hard money loan, there can be many reasons why this lending option makes sense. SC Financial clients have obtained fast funding for time sensitive loans due to liens, bankruptcies or foreclosures, as well for probate estates, divorces or medical emergencies. Hard money borrowers who are seeking to avoid the delays and complications associated with institutional lending sources as well as short term borrowers and real estate investors who use other property holdings as collateral.

When is hard money lending not a potential solution?

While hard money loans eliminate many of the obstacles and red tape from the lending process, it is not recommended in some circumstances. Typically not feasible for long term loans or tight loan to value lending, SC Financial has many options we can provide to borrowers that are seeking alternative financing.

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