WHAT IS AN ASSET BASED LOAN?
An asset based loan is a loan that is secured by a physical asset, an example of this would be a mortgage. If a loan is not repaid, the property will be taken by the lender. This allows a person who has wealth tied up in real estate to take a loan against their property and receive cash they need quickly.
• Asset based loans rely on the value of the property as collateral for the loan. This allows people who may not otherwise qualify for funding to use their property value as collateral.
• Bridge loans – A bridge loan is a loan on a person’s current property that is used to purchase a replacement property. Bridge loans are short-term loans and generally only 6 months-1 year. A bridge loan allows someone with little cash to use the equity in their property to receive cash quickly.
ASSET-BASED HARD MONEY LENDING MAKES SENSE WHEN:
• Your current loan is coming due and you are unable to refinance.
• Unable to qualify for a conventional loan.
• Buying out partner/spouse.
• Cash out for property improvements.
• You need money fast for your transaction.