By definition, a Hard Money Loan (also known as a High Yield Loan) is a form of asset based borrowing that deals not only with real estate financing, but also includes lending for other types of projects or instances. The common thread is that there are assets that can be used as collateral, and there exists a need for capital when the normal financing sources are not available or have been exhausted, or when time is of the essence and conventional financing channels will not work.

Examples of Hard Money Loan needs are:

• The purchase of commercial real estate at a bargain price is possible, but the window of opportunity is extremely short, and financing is needed immediately
• To finance business acquisitions, turnarounds, or mergers
• To save commercial real estate from foreclosure
• To finance commercial real estate until the property can reach economic stabilization so that permanent financing can be obtained
• For debt restructuring for a debtor in possession, and to fend off creditors in bankruptcy
• Capital is needed to satisfy governmental issues such as environmental agency mandates, tax delinquencies, governmental fines and levies
• The borrower has bad credit, and normal financing channels will not provide the funds needed

Due to risk or the quick need for cash, the Hard Money Loan has terms and conditions that the borrower may not be accustomed to, and that most probably will be a requirement of the loan:

• A short term from one to three years
• Higher interest rates than found in permanent financing
• Higher points which are required to be paid up front to the lenders
• The possibility of participation in the success of the situation in the form of "back end fees" at the time of the loan payoff

If you find your firm in the need of a Hard Money Loan, call Sovereign Mortgage & Funding Group. We can provide the solution to your capital concerns handled in shortest period of time and to relieve those fiscal pressures so that you can back to doing those things that are more essential-like running your business.

Feel free to contact us anytime for a free no-risk consultation toll-free at (877) 836-4661 or email us if you have any questions.