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Written By Charlotte Miller

The real estate market has great investment opportunities, but finances are one of the major challenges investors face. Many investors turn to private lenders to finance their commercial real estate investment, especially when looking for creative real estate financing options. Private real estate investment lenders offer commercial hard money loans as a capital source to investors who need fast financing.

Traditional financing for purchasing commercial real estate requires a lot of paperwork and underwriting, and it can take 2-3months to fund. The best thing about commercial hard money loans is that the criteria for qualifying are more flexible than traditional financing options.

If you want to invest in property and want finances that focus on the asset, commercial hard money loans Pennsylvania may be an ideal option. 


How do you qualify?

The process of getting a commercial hard money loan is pretty straightforward. To make it happen:

  • Find a private real estate lender who can assess your deal.
  • Provide the necessary details via an application.
  • Provide the relevant paperwork to establish the value and income of the commercial property.
  • Agree to the terms of the commercial loan and cater for third-party costs.

What are the standard terms of commercial hard money loans?

The terms of commercial hard money loans are different from one lender to another, and they also vary depending on the property and borrower. For instance, a commercial loan that fits an office building in the middle of a city will differ from financing options for a single-tenant restaurant off a busy highway. 

The private lenders have experienced real estate professionals who examine every property. But typically, you can expect loans as fast as 7days, interest-only, with an interest rate starting at 8%.

Can you qualify with bad credit?

The good thing is that you can qualify for a commercial hard money loan even with bad credit. It helps applicants rejected by traditional lenders due to bad credit to purchase commercial property as long as the deal is solid. Commercial hard money lenders provide a second chance to investors who have fallen to hard times previously and still want to invest without paying thousands to repair their credit scores. However, a private lender will charge higher fees and interest to cater to the increased risk of a lower credit score. 

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Are the rates very high?

The truth is, commercial hard money loan rates are high than traditional bank loans. Why? Because they are riskier, faster, and require less underwriting. On average, they will be 4-5% higher than the average interest rates. Traditional financing options take quite some time to approve loans, and they involve rigid funding criteria locking out many people. Commercial hard money loans come in handy for investors who wish to close a quick deal and cannot wait long for back approval.

How do you increase your chances to qualify?

For starters, have your paperwork ready because the underwriter will want to know more about the property and your experience as a real estate investor. Therefore you should be well prepared in advance. 


Commercial hard money loans are valuable for real estate investors who want a fast and flexible financing option without the rigid funding criteria associated with banks.