Hard money or commercial loan?
Borrowers rarely ask for the right product by name, and they should not have to. Here is the single distinction that sorts almost every deal, and the two expensive mistakes people make in each direction.
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Insights
How this business actually works
Plain explanations of how business purpose deals get sized, priced and closed: written by the people who underwrite them, for investors, builders and business owners who would rather know than guess.
Published
Latest from the desk
ARV and the 75% rule
Two identical deals, two different loan amounts. The reason is that a rehab loan is sized by three separate tests and the lowest one wins, and it is almost always the one borrowers forget.
ReadDSCR loans, explained
Your accountant did a good job, and now your tax returns say you cannot afford a rental that cash-flows fine. DSCR loans exist because that outcome is absurd.
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In the queue
What we are writing next
If one of these would be useful sooner, say so and it moves up. If the question you have is not on the list, ask it, the answer usually becomes the next piece.
- SBA 504 vs 7(a): which one for the building your business occupies
- How construction draws actually work, and how to schedule them
- Business purpose vs consumer loans: the line, and why it matters
- What lenders look for in a rehab budget
- Multifamily loan sizing: LTV, DSCR and debt yield, in that order
- The Houston investor's guide to hard money
- Financing a deal outside Texas: brokered bridge, and how it differs
Straight to the desk
Or just ask
Most of what is written here started as a question somebody asked on the phone. For an answer about your specific deal, send it.
Reference
The programs themselves
- Hard money credit box: leverage, terms and costs, published
- Commercial programs, nine executions compared
- FAQ, eighteen questions we get every week
Send it over
Every deal gets a real answer
Tell us the property, the plan and the number you need. A credit officer reads it and tells you what it will support.
- Texas hard money. A term sheet from the people who fund the loan.
- Commercial, all 50 states. Quotes from the desks that cover your asset.
- Outside the box? A straight reason, and usually a name that does fund it.