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Facts to Know About Commercial Hard Money Loans

Commercial property owners may be familiar with hard money financing if they have been in business for a while, but new commercial owners or those looking at their first properties may not be familiar or comfortable with the idea of hard money loans. Let’s take a look at some facts about commercial hard money:

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What is a commercial hard money loan?

Hard money, also known as private money, connects a private investor with a borrower using a non-conventional lending process. Hard money investors typically offer loans as a percentage of the property value, known as loan-to-value or LTV. They also will ignore financial issues such as lower credit ratings, foreclosures, or previous bankruptcies which will prevent conventional lenders from issuing loans. Commercial hard money is normally offered in loans of 10 years or less, with monthly interest payments and a balloon payment at the end.

Are loan terms different from conventional loans?

They can be. Failure to pay the balloon payment can result in late fees equal to several points. Commercial hard money loans may not allow pre-payment without a penalty. In addition, interest rates will be higher because the investor is taking a higher risk by only using the property equity as collateral. It is important for borrowers to read all the terms and conditions of commercial hard money if they are not familiar with them.

How do I arrange for commercial hard money financing?

Contact Shop Commercial Mortgage. Our qualification process is streamlined and can result in your loan approval in days versus weeks or months with conventional lenders. Also, our paperwork requirements are much less onerous than commercial banks. You should look at commercial hard money financing for property flips, securing money for improvements, building your credit rating after previous financial issues, or buying a new commercial property before the opportunity is gone. Call us or fill out our contact request form located at

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"I just closed a commercial loan in St. Petersburg. A 16 unit apartment complex for $100,000 at 11.5% interest. It was a free and clear equity driven low documentation refi with no appraisal so it closed fast!"

Mikle / Broker


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