Chicago Hard Money Lenders

A hard money loan is a type of financing in which the collateral is a property owned by the borrower. Chicago hard money lenders base their approval not on the borrower’s credit history and finances, as is the case with regular banks, but on the value of the property and whether or not it can pay them back if the borrower defaults. Risk level and creditworthiness seldom influence Chicago hard money lenders in their decisions.

Of course, given their risky nature, hard money loans are much costlier than conventional loans. Chicago hard money lenders can charge anywhere from 12% to 18% in interest and impose stiff fines for missing dues, and usually don’t have a generous grace period for late payments. Borrowers may also get less consumer protection than they would with regular banks, since Chicago hard money lenders privately fund their loans.

The benefit of hard money loans is that they can get approved much faster than regular loans. Chicago hard money lenders don’t have to check the borrower’s credit and assess his risk level, so they can take as little as three days to approve a loan. Many businesses turn to Chicago hard money lenders for quick financing while waiting for long-term loans with commercial lenders to get approved.

Find Hard Money Lenders in Chicago

Because mainstream financing institutions do not normally offer hard money loans, it can be hard to find hard money lenders in Chicago without proper connections. Hard money lenders are typically small private companies. One of the best ways to find hard money lenders in Chicago is by checking out local investment groups in the real estate market. Lenders often attend their meetings to network and get business leads.

Another good place to find hard money lenders in Chicago is with business bankers who deal in small business funding. These bankers tend to have extensive connections with hard money lenders, as they often need to help small business owners who cannot get loans from regular banks. Many of them get incentives for referrals, so one can easily find hard money lenders in Chicago with considerable experience.

Research and comparison are vital to finding Chicago hard money lenders. Each lender has his own standards, so it’s not uncommon for rates to vary greatly from lender to lender. One can also find hard money lenders in Chicago who specialize in similar businesses—it’s a good way to get friendlier rates and more support, rather than just straightforward financing.