Applying for a loan through a private investor instead of a bank can be a simple and fast process when you know how to pick the right private money loan program. That does take some experience, though, because hard money loans are structured in a wide variety of ways for a multitude of purposes. Each lender provides them with an ideal business in mind, so don’t be afraid to look for the right loans or to apply for different loans for each unique financing need that pops up as you navigate the growth of your company.

Fix and Flip Loans

One of the most common types of hard money loans is called a fix and flip loan or sometimes a real estate bridge loan. They’re designed to do just what the name says, to provide you with financing that lets you close on the purchase of a property, improve it, and get it back on the market. To do that, they typically charge interest-only payments, allowing you to use the bulk of your capital on improvements and marketing. Most of these loans are for six to twelve months, although some run to three years, and at least one lender offers five-year hard money loans.

These loans also allow investors to rehabilitate long-term investments to close and then flip the debt into a long-term product through a refinancing deal. This is an ideal situation for investors who are buying properties that don’t qualify for long-term financing at closing because they need improvements.

Additional Hard Money Loan Types

There are also hard money loans available to businesses in need of working capital. They also tend to be short-term loans, but instead of being secured by a new purchase, they use the collateral you already own. For smaller loan amounts, vehicles and equipment can even qualify as collateral. This gives you the opportunity to use a hard money loan in more ways and across more industries than just real estate investment. If you’re looking for hard money lenders who can finance those working capital injections regularly, you will be pleased to learn that many private money lenders develop diverse programs to cater to a range of business needs. Check out the rest of the offerings when you’re browsing hard money real estate loans to learn more about the range of opportunities they can open for you. You’ll be amazed at just how many uses there are for alternative financing.