2016-12-21 00:00:00 Borrowing and Loans English Find out whether a hard money loan would work for you. Business owners with credit challenges may take out hard money loans to cover... https://d1bkf7psx818ah.cloudfront.net/wp-content/uploads/2017/03/08214544/lender-discusses-hard-money-loan-with-business-owner.jpg Small Business Terms: Hard Money Loans

Small Business Terms: Hard Money Loans

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Hard money loans are high-interest, low loan-to-value loans sometimes used by business owners as a short-term financing option. Typically, business owners who take out hard money loans have credit challenges and don’t qualify for financing through traditional lenders that offer more favourable small business lending terms. Private individuals sometimes offer hard money loans to business owners who have a lot of equity. For example, a small business owner who owns a commercial building outright would qualify for a hard money loan. The lender might end up owning a valuable piece of real estate if the business owner defaults on the loan. Business owners who take out hard money loans aim to pay them off or refinance to lower-interest loans quickly, as the high interest rate can take a big bite out of their income.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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