Why It’s Better to Seek Hard Money Locally

Turning to hard money to fund real estate investments or fuel business expansion is an option for those who really have no interest in banks. And with the economy as strong as it is now, there is more money out there to be had. Borrowers can look at hard money lenders from all over the country. They can also focus on lenders in their own local areas.

Utah’s Actium Partners encourages borrowers to seek hard money locally. While there certainly is no shortage of lenders nationwide, hard money lenders in Salt Lake City, for example, offer advantages you can only get locally. In the absence of local hard money, lenders in the same general region or state are the next best option.

1. Local Market Expertise

At the top of the list of advantages local lenders offer is local market expertise. Bear in mind that hard money lending is based on collateral more than anything else. A borrower will offer a piece of real property as collateral on a hard money loan, collateral that can be sold in the event of default.

Local lenders know their own markets better than anyone else. They know how to value property based on current market conditions and future estimates. That local expertise helps them make better decisions when it comes time to lend.

2. Interest in Local Success

Local hard money providers are operated by people who live and work locally as well. They have every incentive to make sure clients succeed inasmuch as the entire community benefits when that success is realized. Simply put, local lenders have skin in the game. They will not do well unless the entire local business environment does well.

There really is no substitute for this kind of interest. Lenders involved in their local communities want to help clients succeed as much as possible. They want to help businesses grow, expand, and provide jobs. They want a stronger local economy for everyone.

3. Local Support and Access

Speed is often a factor in hard money lending. For example, a real estate investor might need fast cash to close a deal before it gets away. If that investor works with a hard money lender clear across the country, access might not be as fast as the investor wants. But when lenders are local, it is another story.

Local lenders can make decisions faster because they can approve applications faster. As for the borrower, he has direct access to the people providing the funds rather than having to go through unknown backers who often remain nameless and faceless.

4. Greater Flexibility

Hard money lenders who work multiple states cannot be as flexible as a result. They are spread so thin that they have to establish rigid parameters with little wiggle room. On the other hand, local lenders can be a lot more flexible. By confining themselves to smaller geographic regions and single states, they are better positioned to develop deals for each unique situation.

This might mean bigger loans that are otherwise not available from non-local lenders. It could mean a different way of appraising collateral based on local market conditions. Whatever the case, local lenders generally have more flexibility because they are dealing in a more defined market.

In most cases, seeking hard money from a local lender is a better option than going outside the local area. Local lenders bring a lot to the table by virtue of the fact that they live and work in the same places they lend. It is hard to beat that kind of support when you are looking for hard money.