There are a number of reasons why investors might consider taking out a hard money loan instead of a conventional mortgage loan. Let’s discuss some of those reasons and then look at how hard money loans differ from conventional.
What is Commercial Mezzanine Financing?
There is an order or hierarchy to this type of financing. If you picture a pyramid or triangle, the bottom section represents the senior debt which provides the majority of the financing, the middle section is the mezzanine financing which is the financing that fills the gap between senior debt and equity, and the top of the pyramid is equity financing (the sponsor’s contribution).
