Hard Money Private Lenders for Start Up Business Financing or Business Debt Financing

Hard money lenders have traditionally handled mortgage loans usually offered by private lenders instead of banks or financial institutions. Recently, hard-money loans are high-risk investments made by private investors in a business that wouldn't otherwise qualify for financing elsewhere. These are usually businesses that require start up business financing or business debt financing. There is a broad variety institutions that will lend hard money, ranging from individuals to banks and mortgage companies, but they are all private loans backed by real-estate. All hard-money loans are offered privately, however, and they almost always have high interest rates. For a small business without a strong credit rating, hard money loans can be the solution to cash flow or debt issues.

Private equity firms are investors that, for lack of a better explanation, buy "private stock" in a business. That is to say that it is money made by selling equity in your company, but it is not listed or quoted publicly on the stock market. The money can be used for virtually anything a business needs, inclusing business debt finanacing, but it requires a very large investment and many small businesses won't have an opportunity to access it.

Angel investors are private investors who take on high risk investments, and in return, expect high yields. They typically come in to play when a business needs more money than friends and family can provide, yet doesn't need enough for venture capital. They typically lend amounts over $200,000 and often work in networks to help the right investors find the right businesses. Again, they tend to expect much more money than they put in, given the risk, and this is one of the biggest disadvantages of angel investors. They may ask for as much as ten times as much money as they invested, and typically won't even invest without a rock-solid business plan.

What Angel Investors, Private Equity firms and Hard-Money Lenders all share in common is the fact that they are private lenders, take on high-risk investments, and generally work with large amounts of money that a traditional loan wouldn't cover, or for which a small business wouldn't qualify. Not only do they put a lot of money into a business, but they typically expect to make a lot of money out of the business in timel. For more information about using hard money private investors for start up  business financing or business debt finanacing, please contact us.