The biggest US news this week is the passing of the third stimulus bill, with President Biden signing off on it the package on Thursday, March 11, 2021. You can almost hear the roar of appreciation across the country from people who are in dire need of a financial boost due to the damages to their livelihood caused by Covid-19 over the past year.
However, there are millions of people, many of who are small business owners, who make too much money to qualify for a stimulus check, but they still need a boost to their finances. If you fit into this category, The Rules of Thumb blog from MoneyThumb would like to suggest you check into getting a hard money loan.
Below are the facts about who will qualify for the stimulus payout, which is said to be arriving in bank accounts as early as this weekend:
The full $1,400 goes to single people earning up to $75,000. But it phases out quickly after that and is completely phased out for those earning more than $80,000.
Full payment of $2,800 goes to a married couple filing a joint federal income tax return earning up to $150,000. The phaseout begins after that and ends at $160,000.
If you know you aren't going to qualify for this stimulus and you haven't yet heard of hard money loans, we wrote this post, Understanding Private Lenders and How They Work, explaining in detail what a private lender is and what they can offer. Hard money lenders are one facet of the private lending niche, and they fulfill a legitimate and essential service, providing fast, asset-based loans. These loan providers are distinguishable from traditional banks in that the lenders use their own funds.
Now that you understand what hard money lenders are, your next question may be why you should use one. The short answer is time. In the business world, time is money. From a business perspective, the faster that you can finance and close a deal, the faster you can turn to the next project on your itinerary—the more deals you complete, the healthier your bottom line is when it’s all said and done.
Because hard money lenders do not conduct extensive background checks on applicants, loans can be approved in a matter of days as opposed to weeks. This makes them particularly useful for small business owners. On the opposite end of the spectrum, normal banks can take as long as 30 days to approve your loan.
Whereas traditional financing is premised on the creditworthiness of the borrower, hard money loans are asset-based, meaning the underwriter evaluates the viability of your assets and their inherent worth or potential to produce a reliable revenue stream. This unique form of underwriting gives hard money lenders increased flexibility when it comes to the specific terms and conditions of the loan itself. Even hard money loan payments can be renegotiated in certain situations. The application process for a hard money loan is also much less of a hassle. While these lenders do take your credit score into account, they focus their attention on your assets and ability to repay the loan.
2021 is shaping up to be an active year for hard money lenders and businesses in general. Make sure you take full advantage of the favorable conditions by having the funding you need when you need it in order to accomplish all of the resolutions you made in January! A hard money loan may just be the answer you need.
If you are a hard money lender reading this post and have yet to try out our fantastic product, PDF Insights, now is the time to request a free, live demo. So many lenders use PDF Insights to make quicker and better-informed lending decisions that if you aren't doing so you are missing the boat. This product instantly reconciles bank statements, speeds up your customer onboarding, mitigates credit risk, and standardize your credit approval process.