What is Commercial Hard Money 

Commercial hard money is a term describing a commercial loan that is generally non bankable. The company usually does not meet the standard banking criteria, but has commercial real estate and or assets that are sufficient to collateralize the loan to the investors/lenders. 

Commercial hard money rates Commercial hard money rates are generally higher than other rates. The industry standard range is between 1% and 18%. Typically borrowers pay between 3 and 6 points (percent of the loan amount borrowed). 

Commercial hard money collateral is generally commercial real estate. It can be more than one property and it can also include other assets. When there is not sufficient equity in the property to meet the lenders LTV (Loan to Value) criteria, the borrower may pledge other real estate and "cross collateralize" the loan. Most commercial hard money lenders will not lend beyond 65% of the property value. Cross collateral loans allow loans to be made at higher amounts when the owner has more than one property to be pledged. Property value will usually be determined by the lender, who may use a conservative approach to valuation of the property. For instance they may determine the value based on the ability to sell it in thirty days or less.

Commercial hard money lenders, there are various commercial lenders that are willing to make loans against real estate collateral regardless of the credit history of the borrower. They are asset based loans and depend primarily on commercial real estate value. Only a very few banks will make a commercial hard money loan. Mostly private investment groups and finance companies are making commercial hard money loans.

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