Hard Money Loans Grow in Popularity due to Continued Credit Crunch

September 18, 2011

As evidenced by the continued credit crunch in the U.S., the first and second articles referenced below clearly illustrate the difficulties that small businesses are experiencing in obtaining conventional bank loans. As a result of this phenomenon, the third article referenced below is a bi-product of the overall credit crunch in which individuals are both lending and borrowing “hard money”. The individuals that are making their own cash available to non-conventional borrowers are seeking to achieve higher returns on their money as opposed to investing their money conventionally in both bank accounts and managed money through the direction of an investment advisor or financial consultant. These individuals are achieving enhanced returns on their available capital through the use of short term bridge loans secured by first mortgages on both commercial and residential real estate. On the flip side, numerous small businesses and individuals are the recipients of these hard money loans. These non-conventional loans have enabled numerous small businesses and individuals to access capital that was previously unavailable to them. In essence, these loans have allowed the borrowers to grow their businesses and solidify their cash flow needs in a very difficult and distressed economy.

In short, hard money loans are allowing many small businesses and entrepreneurs to operate effectively and productively in this depressed economy that continues to linger.

Smaller Businesses Seeking Loans Still Come Up Empty

Study: Connecticut Credit Conditions Worsen

A Few Mortgages Done on the Side

Those small businesses and individuals who are unable to obtain conventional bank loans should thoroughly explore the “hard money” lending market. Worth Avenue Capital specializes in sourcing all types of commercial hard money loans.