What if you are unable to obtain conventional financing?
Alternative financing is typically needed when a particular situation does not allow for conventional financing. In most instances either the borrower does not personally qualify due to credit issues or some other personal reason or the property itself does not qualify typically because of a high vacancy rate or the property has deferred maintenance issues. Or, maybe a fast closing is required to make a deal happen. Alternative financing is made for just these types of situations. Complete commercial finance offers you two types of alternative financing:
The first type is commonly known as “soft” hard money. This type of financing is usually used when a certain situation just “falls out” or is almost good enough for conventional financing but not quite good enough. Then you may be in need of “soft”, alternative financing where the rates and terms are not as good as a conventional loan would be, but also not as “hard” as a real hard money loan would be. Typically these rates are in the 6.5 – 7.5% range. If no income verification or no tax returns are being used then the rates would be more like 8 – 9% with both loans typically having a 30 year amortization. These loans are not used when time is of the essence.
The second type of alternative financing is what is known as private or “hard” money. This type of financing is typically used when time is of the essence because they usually close in 2 weeks or less. Bad credit is another, very popular reason why people will need to use “hard” money. Hard money loans are also used when buying a rehab property to either sell or rent out with plans to refinance it later after the project is completed. Hard money loans are short term for the most part, usually 12 – 24 months. They will have higher interest rates and fees than other loan types however the payments made are interest only payments. In most cases the fees can be rolled into the loan amount also in most cases so can the monthly payments, this is called an interest reserve.
No matter which type of alternative financing you are in need of, whether it is private/”hard” money or “soft” hard money, you can count on Complete Commercial Finance to get the job done.