A hard money loan (also referred to as a private money loan, bridge loan, asset loan, and tough money loan) is an alternative to traditional bank lending. It is usually backed by real estate at an LTV (loan-to-value) of 65 percent and lower, however some hard money loans are backed by collateral other than real estate.
Generally speaking a license is not not required to broker hard money deals, however the laws are different from state to state. For example some states require a license to broker residential loans, but not commercial. It is crucial for the broker to be familiar with the laws governing lending in the state of residence.
1. Borrower Application Submission
Borrowers may contact Hard Strategy Lending or use the hard money loan submission form on this site to submit an application with the details of the particular funding needs.
2. Letter of Intent signed
Hard Strategy Lending will use the information provided by the borrower to make a prompt decision on whether or not the particular lending opportunity is worth pursuing. If the primary conclusion is positive, Hard Strategy Lending will deliver a Letter of Intent to be signed and returned by the borrower.
3. Preliminary Evaluation
After receiving the signed Letter of Intent from the borrower, Hard Strategy Lending will begin collecting data to evaluate all aspects of the loan. Hard Strategy Lending will gather information pertaining to three main areas: Collateral, Borrower Info and Exit Strategies. The most time and energy is spent scrutinizing the borrower's collateral. Our research will typically utilize appraisals, title reports, pro forma financials, environmental reports, and expert opinions.
4. Site Visit
Part of the loan and due diligence process will require a site visit by Hard Strategy Lending. This will help us validate the information received throughout the loan application.
5. Loan Package Created
After completing the due diligence process, Hard Strategy Lending will compose a loan packet that is distributed to our group of private investors. These investors will review the packet and decide if the loan terms meet their personal requirements for risk, duration and rate of return.
6. Lender Commitment
Investors who are interested in funding the loan will either commit to the terms negotiated by Hard Strategy Lending or may request new terms and submit them to be reviewed and agreed by the borrower.
7. Funding
When all parties have reached a formal commitment, Hard Strategy Lending will work with a title company and in-house attorneys to organize the underwriting and closing terms of the loan. Depending on the complexity of the loan, this process can take anywhere from a few hours to a few weeks. Hard Strategy Lending will assist the investors in working directly with the title company. Funds will be wired directly by each investor into an escrow account to fund a loan. Each investor's name will appear as the secured party on all loan documents.
