Myth vs. Fact: Are All Hard Money Lenders Loan Sharks?

Myth vs. Fact: Are All Hard Money Lenders Loan Sharks?
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Even though hard money lenders have been around for a while, some people still don’t know much about them. There’s a myth that all hard money lenders are loan sharks who charge unreasonably high rates and are only focused on their own profits at the expense of the borrower. In reality, modern commercial real estate lenders follow established principles of responsible lending, just like traditional banks.

Why Hard Money Loans are Beneficial to Borrowers

In many ways, applying for a hard money loan is similar to the process of applying for a  loan with a traditional lender. The difference is that hard money lenders look at more than the borrower’s creditworthiness; they primarily look at the loan’s underlying collateral and its future potential value. Because of this, hard money lenders can process loan applications faster than traditional lenders, thereby approving a loan quickly. This helps a borrower get to the next step in his or her plan faster and in turn, increases overall ROI.

Hard money lenders typically take on an added risk that a traditional lender won’t touch. Because of this, a hard money loan may require a higher interest rate than a traditional loan. These specialty loans may be a reasonable option in circumstances such as a fix and flip project or a bridge loan necessary to facilitate the gap between closing and placing traditional financing on a property. This gives you the financial resources you need to move quickly to achieve your goals with your project.


Why Investors Should Consider Working With Hard Money Lenders

Good investors know that moving too slowly in real estate can be detrimental. As the saying in real estate goes, time kills all deals. Traditional lenders have a risk formula they use to underwrite a loan using a borrower’s existing assets, loans, and obligations. Hard money real estate lenders have a formula as well, but their risk ratio allows them to consider loans for situations that fall outside of the traditional lender’s model.  With this flexibility, a hard money lender can ensure rapid loan approvals best optimized for investors and their projects.

Bay Mountain Capital has many years of proven and extensive experience collaborating with skilled investors who are ready to move on the projects they bring to the table.

The Numbers Behind Bay Mountain Capital Success

Since its founding in 2008, Bay Mountain Capital has built a business and a reputation on more than a century’s worth of experience in real estate. To date, we have loaned more than $320 million through more than 3,000 loans.

A Transparent Process Built on Experience

As a lender, Bay Mountain Capital commits to the success of every partner we work with; when they win, we win. We develop financing solutions that help them achieve their goals using our hands-on real estate and lending industry knowledge. Guided by our core values, we uphold integrity, respect, improvement, and excellence when working with borrowers, and investors.

  • Integrity: We only offer loans for borrowers when we believe the project can be successful. We are proud to help borrowers resolve unique situations with strategic solutions grounded in principles of responsible lending.
  • Respect: All of our hard money loan applicants receive full and serious consideration on the merits of their assets and their application.
  • Improvement: We believe in the promise of betterment and making that a reality for borrowers. Bay Mountain Capital supports small businesses and the ripple effect that comes from funding projects with a broader benefit. Our hard money loans to small business projects improve the lives of their employees and the communities where they live, work, and play.
  • Excellence: Our high standards are reflected in our attentive service and crafting tailored solutions to meet the borrower’s needs.

As a responsible hard money lender, Bay Mountain Capital takes its role in helping borrowers and investors seriously. We work with our clients every step of the way to ensure that our funding solutions meet their needs, from thorough application reviews based on lending industry standards to fast decisions that allow borrowers and investors to move quickly on their projects.

About Bay Mountain Capital:

Bay Mountain Capital has been in business for more than a decade, closing approximately 3,000 loans. We specialize in financing all types of residential and commercial property investments throughout Texas and Georgia. Using common sense and a value-added approach, we strive to incorporate these principles into our underwriting and closing processes.

As a direct lender, Bay Mountain Capital can close a loan within one day after receiving a complete file and clear title. The process generally takes two weeks for a residential loan but can be accelerated where circumstances require it. We are primarily an asset-based lender, which means qualification requirements are limited. Our rates and fees are among the lowest in the industry.

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