Savvy California entrepreneurs understand that business strategies need continuously evolve, sometimes changing very rapidly. Certain circumstances dictate the need for quick cash to swiftly execute a business plan or seize growth opportunities. Whether it’s simply consolidating debt to improve cash flow or to pursue a strategic investment, having a way to generate cash quickly is commercially advantageous.
When most business owners need quick cash, they usually seek funding using commercial real estate loans. But obtaining capital via commercial loans in California through traditional lenders, or even the Small Business Administration (SBA), has become a slow and restrictive process.
Alternatively, borrowers have pivoted to utilizing California commercial hard money loans. Hard money commercial loans in California can be used in a variety of situations, offering greater speed and flexibility than traditional commercial loan programs.
Despite their advantages, hard money commercial loans in California are a bit unique compared to traditional counterparts, so it’s important to fully understand how hard money California commercial loans work before you incorporate them into your business strategy.
This guide will help define what hard money commercial loans in California are, as well as outline how to best use hard money commercial real estate loans in California as a financial resource, empowering your business and supporting your financial success.
What is a Hard Money California Commercial Loan?
Hard money commercial loans in California are a unique type of real estate loan that investors and business owners can leverage to better achieve their business objectives. Hard money commercial loans in California are usually short-term loans that offer quick cash in as little as a few weeks, with very limited financial scrutiny.
However, not all lenders offer hard money commercial loans in California. Traditional lenders, such as banks and credit unions, don’t offer hard money commercial loans in California. California commercial hard money loans are only offered by California commercial hard money lenders, who are typically private investors, businesses, or other private entities.
How Do California Commercial Hard Money Loans Work?
California hard money commercial real estate loans work a bit differently than traditional commercial loans. California hard money lenders utilize an asset-based approach to lending which allows for fewer program restrictions and less scrutiny.
When approving commercial real estate loans in California, hard money commercial loan lenders will underwrite your application in-house and base their approval decision primary on the fair market value of the underlying real estate being used to secure the loan request.
Since hard money commercial loans in California emphasize the value, type, and condition of the real estate as collateral, most hard money commercial loans in California do not require borrowers to show proof of income or retain a minimum credit score making the process much more palatable.
Similarly, with fewer borrowing requirements hard money commercial loans in California can be approved in as little as a few minutes, with funding issued in weeks, not months. This allows you to get your money faster, causing less disruption to your business strategy.
Property Types for Commercial Real Estate Loans in California
One of the advantages to hard money commercial real estate loans is that they work with a variety of commercial property types. Many traditional lenders will shy away from certain types of commercial real estate because they find they carry excessive risk.
However, California hard money commercial lenders accept most types of commercial real estate as collateral, making their California commercial hard money loans extremely versatile. Acceptable property types include:
- Retail – places for selling goods and services; restaurants, salons, malls, shopping centers, etc.
- Industrial – properties used for manufacturing and distribution; warehouses, storage, fabrication, assembly workshops, etc.
- Office – places used for office space; traditional offices, communal/flex workstations, executive suites, training facilities, etc.
- Hospitality – properties that provide accommodations, meals, and services for travelers; hotels, motels, bunkhouses, inns, bed and breakfasts, micro, boutique, etc.
- Mixed-Use – buildings that combine different property types; one’s that have commercial retailers and residential apartments
- Healthcare – places designed for healthcare operations; surgical centers, dialysis clinics, urgent care, hospice, long-term care, medical office spaces, dental practices, chiropractors, retirement communities, nursing homes, etc.
- Multifamily – properties intended for residential use by multiple families; duplexes, triplexes, fourplexes, apartment buildings – mid- and high-rises, condominium communities, student housing, age-restricted housing, etc.
Best Ways to Use Hard Money Commercial Loans in California
Hard money commercial real estate loans in California are extremely versatile. When incorporated into your business’s financial strategy and used tactfully, commercial real estate loans in California can offer a ton of benefits.
One of the best ways to leverage hard money commercial loans in California is when you need quick funding for an acquisition. The expediency of approval allows you to commit to lucrative investment opportunities immediately, rather than waiting months for traditional financing, potentially risking the deal falling through.
Another way to leverage hard money commercial real estate loans is when you cannot qualify for traditional mortgage programs.
Traditional lenders, such as banks and credit unions, have hefty income and credit requirements, which can be problematic for borrowers with blemishes to their credit or whose business revenue frequently fluctuates.
Hard money commercial lenders in California don’t weigh these factors in their approval decision, making it easier to get the funding you need quickly.
Lastly, California hard money commercial loans are ideal when you need cash to cover expenses over a short period of time.
Sometimes unexpected expenses occur that can be disruptive to business operations. A machine might break down or you may need to cover a large administrative cost. Whatever the reason, hard money commercial loans in California can help soften the financial burden until budgets can be restructured or alternative financing can be obtained.
- Some additional strategies in which hard money commercial loans in California are useful include:
- Fill a financial gap while searching for a long-term financing solution
- Using the cash to pay off unresolved tax liens or judgements
- Converting equity into cash to improve business liquidity
- Finance short-term fix-and-flip projects on a short term basis
- Expand existing commercial to increase capacity
- Renovate existing business spaces to strengthen efficiency
- Acquire new investment properties at deeper discounts
- Preventing construction delays or help cover cost overruns
California Commercial Loans, Independent Lending
Hard money commercial loans in California are a great source of financing for any business in need of quick cash or experiencing a tricky financial situation. They offer quick funding and less scrutiny compared to traditional commercial loans.
Nevertheless, its important to fully understand how hard money commercial real estate loans in California work before you make a financing decision. Most importantly, you want to find a California hard money commercial loan lender you can trust to navigate you through the nuances of approval process.
Hard money commercial loans in California are in high demand, but thankfully Independent Lending is here to help. Independent Lending is California’s preferred hard money commercial loan lender. Our concierge approach to lending that focuses on developing trust and supporting your business strategy will exceed your expectations.
Having facilitated over $500 million in mortgage funding over the last decade, our clients trust our proven track record of providing ultra-fast approval decisions and sophisticated solutions that will help them to achieve their overarching financial objectives. Contact us today to discover how a hard money commercial loan from Independent Lending can help your support your business objectives.
