Hard money loans offer a range of benefits for businesses and investors, including fewer limitations, better negotiation power, flexibility, faster approval time and more. However, not all hard money lenders in California are the same, and some will offer you a greater advantage than others. For this reason, it is important to compare your options carefully before selecting any lender. Below is some information to help you understand what makes a good hard money lender, as well as how to choose the right lender for your specific needs.
Characteristics of a Good Hard Money Lender
Some California hard money lenders are not as reputable as others. In fact, some hard money lenders may even be operating scams designed to maximize their profits with little to no concern for their customers. For this reason, it is important to be very careful when selecting a lender. In fact, choosing the wrong hard money lender may even cause your investment or business project to fail, leading to substantial financial loss.
The best hard money lenders are those who have a reputation for providing good customer service, as well as significant experience working in the industry. In addition, the best hard money lenders will be able to offer quick approval and funding, and they will be responsive to their customers’ needs throughout the application and approval process. Likewise, hard money lenders that are knowledgeable and well respected tend to be a better choice than those that are not.
Factors to Consider when Choosing a Lender
Several different factors will make a difference when it comes to choosing the right hard money lender. In order to choose the best lender for your business and investment needs, consider all of the factors below.
1. The lender’s focus.
Perhaps one of the most important factors to consider when comparing different lenders is whether the lender’s focus matches your own. Many hard money lenders in California focus their efforts on providing loans for specific types of clients or niches. If possible, choose a hard money lender who focuses their efforts on working with clients in situations similar to yours. If you aren’t sure about the hard money lender’s typical client, simply ask the lender whether they prefer a specific type of borrower. If the lender does not mention your niche specifically, be sure to ask the lender what experience they have working with clients like you.
2. The lender’s responsiveness.
The best hard money lenders provide superior customer service and responsiveness, answering your questions and addressing your concerns as soon as they are presented. High levels of responsiveness provide you with a distinct advantage, as you will be able to secure the funding you need more quickly. Working with a responsive lender is also less confusing and frustrating. As you compare different hard money lenders in California, pay close attention to the amount of time it takes to hear back from each lender after submitting an inquiry. If you have trouble getting into contact with any given lender, think twice before moving any further.
3. The lender’s requirements for borrowers.
In general, hard money lenders have fewer requirements for their loans than most other types of lenders. Nonetheless, that does not mean that you won’t have to meet any requirements in order to obtain a loan. Before choosing any hard money lender, it is in your best interest to make sure that you will be able to meet the lender’s requirements easily. Ask each perspective lender about their qualification requirements and choose a lender you can work with easily. If you are not sure whether you meet the requirements, a more in-depth conversation with the lender may be necessary before you can move forward.
4. Reviews from past customers.
Another important factor to consider before you choose a hard money lender is the lender’s reputation among past customers. You can learn about the lender’s reputation by reading reviews and testimonials. However, keep in mind that reviews left on third-party websites tend to be less biased than testimonials available directly from the lender. Look for a lender who has a reputation for being fair, responsive and reliable.
5. The affordability of the lender’s services.
Every lender sets their own loan fees. Depending on your business and/or investment goals, these fees could have a significant impact on your bottom line. For this reason, it’s always a good idea to ask about fees and compare them before you select a lender. Be sure to ask each lender to disclose all of the fees associated with your hard money loan upfront so there won’t be any surprises later in the process.
6. The types of loans available.
Some lenders may have an excellent reputation and affordable fees, but they don’t offer the type of loan you need. Before you begin the application process, make sure the lender you are choosing offers the loan products you need. You can learn about available loan products by researching options on the lender’s website or asking the lender directly.
How to Make the Right Decision
Comparing different lenders can be a daunting task. However, it is well worth your time in order to ensure that you are getting the greatest benefit for your money. To make the best decision for your business needs and goals, consider all of the factors above carefully and compare them to your priorities.
At Barrett Financial Group, we understand how important your hard money loans are for the future of your business and your investments. We are proud to provide customized hard money loan options to clients throughout an expansive service area in California. We offer a variety of loan products to choose from, including building loans, fix and flip loans, bridge loans, refinances and much more. Our loans are funded quickly, and we impose very few requirements on our clients. To learn more about applying for a hard money loan from Barrett Financial Group, please contact us today.