Entrepreneurs in all industries rely on loans to develop new products and grow their businesses. Without loans, companies could only advance by reinvesting their profits. A new company, however, doesn’t have the profit to invest in itself. Even established businesses may prefer using loans instead of dipping into their earnings.
Before accepting real estate or business loans, companies need to explore and compare their options. Interest rates can vary significantly from one lender to another. Different types of loan products also offer pros and cons that should affect whether businesses choose them.
LenderMatrix makes it easy for entrepreneurs to find loans for a wide range of business ventures. The real estate and loan lender directory at LenderMatrix.com should be the first place that people look before borrowing money.
Types of Real Estate and Business Loans
Lenders listed in the LenderMatrix directory offer a variety of real estate and business loans. Knowing the different types of loans will help entrepreneurs find the products that suit their needs best.
Hard Money Loans
Hard money loans often appeal to people who invest in real estate. With hard money loans, investors don’t need to provide information about their credit histories and incomes. Instead, the lenders accept collateral to lower the risk of lending money.
Investors can use the properties that they plan to buy as collateral for their hard money loans. Since lenders will rarely match a property’s full value, investors may need to use vehicles and other properties to get the amount of money they need to rehab and flip homes.
Commercial mortgages are similar to the mortgages that most people use to buy homes. With a commercial mortgage, though, the money goes toward buying commercial buildings like restaurants, retail stores, and manufacturing facilities.
Entrepreneurs that want to purchase existing buildings can use commercial mortgages. Those that want to construct new buildings, however, should focus on construction loans. Unlike most loans that give borrowers lump sums of money, construction loans provide money on a schedule. When construction reaches the next milestone, the borrower gains access to more cash.
Doling out money on a schedule helps protect lenders’ investments. Since interest only applies to the amount that has been borrowed, a schedule can also help lower a borrower’s interest payments.
Merchant Cash Advances
Merchant cash advances work differently from typical loans. Instead of paying a set interest rate, borrowers promise to give lenders a portion of their future sales.
When accepting merchant cash advances, businesses receive lump sums of money that they can use to buy the merchandise they need to keep their shelves stocked.
Historically, lenders have only given merchant cash advances to businesses that rely heavily on credit card payments. The lender could use the credit card statements to determine how much money the borrower owed.
Today, sophisticated banking technology makes it possible for lenders to offer merchant cash advances to a wider range of businesses that don’t take many credit card payments.
Business Lines of Credit
A business line of credit works similarly to credit cards. When a business takes a line of credit from a lender, it has a limited amount of money that it can use. The business, however, does not receive the amount of money in a lump sum. Instead, it uses the business line of credit when it needs help making ends meet, buying inventory, or paying employees. The business only pays interest on the money that it actually uses rather than the maximum amount that it can access.
Comparing Real Estate and Business Loans
LenderMatrix’s directory makes it easy for people to compare real estate and business loan offers from hundreds of lenders.
Borrowers can start by searching for loan offers that match certain parameters. For example, a person who wants to find business lenders willing to lend up to $500,000 can focus on proposals that meet those needs.
Borrowers can also organize their search results by:
- Required FICO score
- Prepayment penalties
- Property types
- Loan purposes
Once potential borrowers find offers that meet their needs, they can compare details to make sure they choose the best loan. Most borrowers focus on details like:
- Interest rates
- Origination fees
- Repayment schedules
- Lender reputations
Since LenderMatrix attracts such a large number of lenders, borrowers have plenty of options to consider. This creates a competitive marketplace where lenders need to keep their interest rates and fees as low as possible. Instead of borrowers begging for money, lenders compete with each other to get more business.
Find a Real Estate or Business Loan With LenderMatrix
Every company needs to borrow money at some point. Traditional lenders, however, don’t always have the products that businesses need to thrive.
Instead of accepting sub-par loans from traditional lenders, companies can turn to LenderMatrix to find real estate and business loans that meet their needs.
Get the funding that companies need by visiting LenderMatrix and searching for lenders that want to work with your business. You don’t even have to open an account until you decide that you want to communicate with a lender in the directory.