Are there any lenders for hard money business loans? Is this a thing?

Hard money loans for property investments are common

The term "hard money" is common in the world of real estate investing. A hard money lender offers to finance a property based on the economic value of that property instead of the personal financial profile of the real estate investor. This means that the amount of the hard money loan is supported by the value of the property, and the economic productivity of the property (the rent) pays for the loan payments. In both cases, there is plenty of cushion for the hard money lender - the loan amount will be less than the property value (i.e. a conservative loan-to-value ratio) and the rent will be more than the amount of the loan payments.


Hard money lenders generally offer two types of hard money loans secured by the "hard" collateral of the real estate itself:

  • 1. short-term loan - the property needs an improvement in value and condition in order to get a normal of amount of rental income. The hard money loan will be used to acquire the property (at a depressed price) as well as to provide sufficient funds to renovate the property to a better condition and thus higher value. Hard money lenders may charge a high interest rate for this riskier type of loan, as it depends on the rehab project being successfully completed on-time and within a budget. The before and after value of the property as well as the rehab cost are the key factors in the loan. The income, employment, tax returns, and other financial aspects of the business owner (real estate investor owning a company doing real estate investment) are not normally a factor. Only slightly relevant in this case is the personal credit score of the investor, in fact bad credit may even be permitted by some lenders.


  • long-term loan - the property is in "rent-ready" condition to be offered to the market for rent. The hard money loan will be used to acquire the property on a longer repayment period (25-30 years). The primary factors are the current property value and the current rental income potential of the property. The income, employment, tax returns, and other financial aspects of the business owner (real estate investor owning a company doing real estate investment) are not normally a factor. The personal credit of the borrower is quite important as this longer term loan requires assurances that the borrower is apt to repay the loan on a faithful basis.

Can you get a hard money business loan for a small business that is not involved in real estate?

Hard money loans have proven to be extremely popular in the world of real estate investment and have allowed thousands of people to become successful real estate investors with this different kind of financing that had not historically been offered by traditional lenders like banks.


The question naturally becomes, can this same kind of alternative "asset-based" financing apply to small business loan not affiliated with real estate investing or property ownership? The answer is NO - because several kinds of "asset-based" financing for businesses have always been offered.

A hard money loan is secured by property and not a business

The business itself is not the right kind of collateral for a hard money loan like a piece of real estate. Whereas such a building is fixed in the same place and can be seized by a creditor in a long-established process (foreclosure in the case of non repayment of a loan using it as collateral) a business is not nearly as stable and definite. It exists in many locations, has many different input factors that are needed to make it work, and can generally disappear quickly if customers no longer buy from it. It can't readily be seized in the case of a loan repayment failure. Therefore, a hard money loan to buy a business is not something that makes much sense.

Find the right business loan in our marketplace of business-oriented lenders

As a hard money loan is not appropriate for a business operation (apart from real estate holdings), the simple answer is to pursue the many different types of financing that are made available to a business as alternatives to hard money lending for a business (that doesn't really exist):

  • Need a piece of equipment or a vehicle for your business? Pursue equipment financing secured by the collateral itself.
  • Need cash for different purposes such as buying inventory, starting a marketing campaign, or paying bills during a low season? Pursue a business term loan or business line of credit using your time in business and historical monthly business revenue to support the financing.
  • Need to exchange your unpaid invoices and slow paying accounts receivables for money now? Pursue factoring / accounts receivable financing to get the cash much faster than waiting for normal repayment cycles to finish.
  • Need financing to acquire an exiting business that interests you? Pursue a SBA business acquisition loan supported by the historic economic performance of the business.
  • Own a business but want to buy the commercial real estate that your business now leases? Pursue a SBA commercial property loan to acquire the real estate for your business

As indicated, any kind of business loan is generally available from a wide variety of lenders. It's not necessary to search for a "hard money business loan" that does not really exist.


Try our business lending marketplace here at Kirksley Commercial Finance, where you find hundreds of online lenders who are interested in funding the type of loan that is right for your business right now. You will find an easy application with no cost to apply and no impact to credit score. Approval decisions and funding delivery are super-fast and convenient for your financing needs as a busy business owner.