How To Use Hard Money Loans for Fast Business Acquisitions

In the world of business acquisition, speed and certainty often matter more than cheap capital. Whether you're buying out a distressed seller, acquiring a competitor, or executing a time-sensitive MBO, traditional bank loans usually take too long. Hard money loans offer a faster, asset-secured funding route tailored for entrepreneurs and sponsors who need to close quickly. Financely arranges private credit-backed hard money solutions for acquisition transactions between $2M and $50M.

1. What Are Hard Money Loans for Business Acquisition?

A hard money loan is an asset-backed lending facility secured primarily against real estate, machinery, inventory, or other tangible assets of the target business. Unlike traditional credit facilities that rely heavily on income statements, hard money lenders focus on asset coverage, liquidation value, and downside protection.

• Speed: Deal evaluations in 5–10 days. Closings in 2–4 weeks.
• Asset-based underwriting: No need for perfect credit or audited financials.
• Bridge or permanent capital: Use short-term for closing, then refinance with SBA, PE, or bank debt later.

2. Ideal Use Cases

Hard money financing is not for every deal. But it shines in the following business acquisition situations:

• Distressed or time-sensitive acquisitions where traditional lenders won’t move fast enough.
• Asset-heavy companies such as logistics, manufacturing, or construction firms with real estate or equipment value.
• Partner buyouts or management buy-ins where an urgent equity stake needs to be funded.
• Turnaround deals where the business has solid assets but poor financials.
• Bridge-to-bank transactions where an acquisition needs to be closed ahead of long-term refinancing.

3. What We Arrange at Financely

We’re not brokers passing the file around. Financely acts as a direct advisory partner, structuring hard money loans tailored to each acquisition. Our lenders are experienced private credit funds and asset-based specialists—not payday lenders.

• Loan sizes:$2M to $50M per transaction
• Advance rates: Up to 70% of eligible asset value
• Collateral: Real estate, inventory, equipment, A/R, or hard IP
• Term: 6 to 24 months, with flexible repayment schedules
• Interest rates: 10%–18% annualized (depending on risk)
• Closing timeline: 2 to 4 weeks on average
• Lender types: U.S. and EU private lenders, family offices, and special situations credit funds

4. Required Documentation

To move fast, you need to show lenders the basics up front. We help clean and present your deal professionally, but expect to share:

• LOI or SPA signed with seller
• Asset list with recent valuations or appraisals
• Basic financials (even if unaudited)
• Business overview and acquisition rationale
• Use of funds breakdown and exit/refinance plan

5. What Lenders Will Want To Know

• What are the hard assets being acquired? Land, plant, inventory, accounts receivable?
• Is the business profitable or at least breakeven?
• Who is the buyer? Sponsors with operational or turnaround expertise are preferred.
• Is there an exit strategy? Refinance, sale, or income-based servicing?
• Is there skin in the game? Even 10–20% equity from the buyer signals commitment.

6. Hard Money vs SBA vs Bank Loans

Criteria	Hard Money	SBA/Bank Loan
Approval Time	5–10 Days	30–90 Days
Collateral Required	Yes (strict)	Yes (flexible)
Credit Score Requirement	Low to Medium	High
Interest Rate	10%–18%	6%–9%
Use Case Flexibility	High	Low to Medium

7. Common Questions

Can I use a hard money loan for an asset-light business?

Unlikely. These loans rely on hard collateral. If your deal is IP-driven or intangible-heavy, private equity or seller financing may be a better fit.

Will I lose the business if I default?

Yes. Hard money lenders can seize the collateral if obligations aren't met. That's the risk. But it's also what allows these lenders to move quickly.

Can I combine hard money with mezzanine debt or equity?

Yes. Many buyers layer a hard money facility with either equity capital or secondary unsecured debt to complete the funding stack.

Do you help with the acquisition due diligence too?

Yes. Financely offers full transaction support—financial modeling, data room review, and capital structuring advisory are available.

Financely arranges private credit solutions and hard money facilities from licensed lenders. We are not a lender or broker-dealer. All transactions are subject to underwriting, KYC/AML checks, collateral valuation, and signed engagement. Success fees apply on funded transactions. No guaranteed offers are made or implied.