Time, as the saying goes, is money. To commercial real estate investors, every day where a project sits idle can mean thousands of dollars down the drain. It’s times like these when the real value of a direct lender can be seen clearly.
Many simply can’t wait for the long approval process called for by traditional lenders. “When you’re pressed for time and need to get a project completed, for many there’s simply no alternative method to get access to $1-50 million dollars,” says Kennedy Funding Financial CEO and President Kevin Wolfer.
And waiting for funding means projects years in the making–deals involving office space, condos, land or retail projects–can potentially go up in smoke. That’s where a direct lender can make the difference. Loan commitments can come through in as little as two days and five days for a closing.
Wolfer notes that there are up-front costs and higher rates for short term hard money loans. But when you factor in the costs of brokering the deal to other investors or losing potential upside to a partner, investors can see the value in seeing their visions through. When it comes to beating the clock, Wolfer’s firm urges potential borrowers to consider all their options. “It’s not for every deal, but there’s a good business case for tapping direct lending in certain circumstances. It can literally put time back on your side.”