If you’re a broker whose borrower has been turned down by banks and non-conforming private lenders for a small commercial mortgage, it’s time to start looking at hard money loan options. Traditional hard money lenders aren’t concerned with a borrower’s credit score and their loans don’t include prepayment penalties. However, certain aspects of these loans can be problematic for borrowers. This year, APEX Mortgage Corp. launched a new program – a softer approach to hard money. Read on to learn about the differences between an APEX hard money loan and a traditional hard money loan, and to see if our hard money program is right for your borrower.
- Rates and terms: Traditional hard money loans can have rates as low as 10 percent and as high as 30 percent, whereas APEX’s softer hard money rates will be 12-15 percent. Hard money terms generally range from 6-24 months. APEX’s terms will be between 1-5 years, which will give many of your borrowers some extra time to pay off the loan.
- Loan size: Many hard money lenders won’t lend under $500,000, making it difficult for business owners who need smaller loans to find financing. To help those small business owners, APEX’s softer hard money program will provide borrowers with loans ranging from $50,000-$350,000.
- Closing costs: Hard money lenders will generally charge at least 5 percent in closings costs when financing a commercial property, and may charge more. APEX will look at each loan on a case by case basis, and our closing costs will start at 2 percent.
- Ability to pay: Traditional hard money lenders are not concerned with a borrower’s capacity to repay a loan and generally have no problem foreclosing on the property. APEX is still concerned with a borrower’s ability to repay the loan. APEX will foreclose on a property if necessary, but what we really want is to be able to help a borrower solve a temporary problem.
- Exit strategy: When working with a traditional hard money lender, it’s crucial for your borrower to have an exit strategy in order to repay the loan in the limited time they are given. With an APEX hard money loan, our core program can be your borrower’s exit strategy.
When your borrower needs a hard money loan, it’s important to explore the options available. A traditional hard money loan can be a great option for your borrower’s financing needs, but it can be an expensive and stressful process. For borrowers looking for a softer approach to hard money, APEX Mortgage Corp. is an excellent solution.
For more information about the program, call 800-262-APEX. You can also read our blog “A Softer Approach to Commercial Hard Money Loans.”