Auto Dealership Hard Money Loans are Offered by Auto Dealership Hard Money Lenders
Hard Money Loans for an Auto Dealership
If conventional financing is not available for funding improvements to your auto dealership a hard money loan may be exactly what you need; or suppose
a dealership has come up for sale, or you can get a good deal on inventory. However, your current credit situation, or the location or physical conditions of the property, won’t allow financing through conventional conforming loan channels like banks and mortgage brokers. You may be an excellent candidate for a hard money loan.
Reasons for Applying for Hard Money Auto Dealership Loan
- Credit maxed out
- Property in remote location
- Property not of conventional construction
- Value based on land alone
- Value cannot accurately be determined
- Potential income from property cannot be verified
- Completely accurate estimate of what improvements will cost not feasible
Hard money lenders can be found nation wide: private investors, mortgage companies, or banks that deal in hard money financing to help finance renovations or acquisition of another dealership. If you deal with a hard money loan broker, be prepared to pay “points”: an up front percentage that probably will start somewhere around 3%. The dealership itself will be the collateral that secures the loan, and the lender may ask you to put up other assets to consummate the deal. Hard money lenders will typically finance only a percentage of the purchase price -- usually 65% to 75% (Loan to Value Ratio). Since the dealership will produce income, a loan can be based on the value of the property plus its income producing potential. Interest rates might possibly run anywhere from 8% up; may initially be fixed, but later become variable.
Are you experienced in running an automobile dealership? That is typically considered a plus. Be prepared to give the lender the following, in addition to color photos of the land and any buildings and a map showing location.
- Date of purchase
- Date of closing
- Purchase price and appraisal if available
- Estimate of fair market value
- Reason for applying for hard money loan
- Verifiable gross income or expected income
- Yearly expenses to be incurred on property
Disclaimer: The hard money loan calculators found on this website are offered only to estimate monthly loan payments of hard money Auto Dealership loans. No guarantee is offered or implied as to their accuracy. Hard money Auto Dealership loans are non conforming, they do not conform to the underwriting guidelines of Fannie Mae or Freddie Mac. Each private equity hard money lender has their own fee structures which may include points at closing and early prepayment penalties. Discuss all of the details of your particular hard money Auto Dealership loan including all costs and fees with your selected hard money lender.