Search results for Application

Thank you for your application. A representative will contact you once your application has been processed.

As a property developer or home builder, you know that time is money. While you can choose from many construction loan lenders, private or hard money lenders offer significant advantages over a traditional mortgage lender. Here are just some of the advantages of hard money loans:

• Loans close much faster than traditional mortgage loans.
• Programs range from home construction loans to condominium and multi-family construction loans.
• Terms are based on your experience and the project’s prospects for success.
• Loans come with interest-only payments and a balloon payment on completion.
• There are no prepayment penalties.

Interested? Read on…or contact us for details or book an appointment to learn more.

When financing construction projects, whether you are building or renovating, it is important to thoroughly understand your construction loan – its features, how you benefit, what’s required to qualify, and the application process. Financing a construction project is different than financing a home purchase with a standard mortgage loan. Your real estate investment in the lot, construction costs, and activities in each construction phase will affect your profit. Therefore,when choosing a lender for your construction loan, you must know your options and what considerations to weigh to help you select the right one.

At Muevo, we’re committed to educating borrowers about the financing alternatives available for their projects and helping them secure the right hard money loan to meet their unique needs. In this blog, we’ll review the ins and outs of construction loans – how they work, why they can be advantageous, what you’ll need to apply and be approved, and why you should consider a private lender like Us as your financing partner. We’ll also share some potential challenges and how to overcome them as well as several tips to ensure you successfully qualify for our construction loan program.

Understanding Construction Loans

Construction loans are used to finance the building of a range of property types. At Muevo, we offer them for the construction of:

• Condominiums
• Single-family residences
• Two-to-four units
• Multi-family homes
• Townhouses
• Other property types (on a case-by-case basis)

There are several distinct advantages of obtaining a construction loan for these particular projects. First, a construction loan provides the necessary funds to cover embedded costs including labor, materials, permits, and other related expenses. Securing such a large amount of capital upfront for a construction project would be challenging without financing.

Second, a construction loan ensures proper cash flow management via the draw process, which we’ll explain in greater detail later in this blog. Third, these loans make it possible to seize construction opportunities in high-demand areas – which yield higher returns once completed. You also stand to benefit from increased property value and rental income (if you are planning to rent once the project is completed). Finally, financing via a construction loan will help you build equity for your next project.

Qualifying for a Construction Loan

Once you’ve determined that a construction loan is the best way to get your project off the ground and ultimately completed, you must prepare to qualify with a lender.

Before all else, become familiar with the credit score and financial requirements necessary to be approved for the construction loan from your lender. And know that both your personal and business financials will be thoroughly reviewed. As such, your lender will require you to provide related documentation and paperwork for verification purposes. They will make an assessment of your financial situation by also weighing income and debt considerations.

Other important financial requirements to be aware of are the required down payment amount and your loan-to-value ratio. These also factor into whether you can qualify.

In addition, you will need to furnish information about your project and those involved in its construction, such as:

• Contractor credentials
• Property information and proof of lot/land ownership (title deeds, zoning info, property surveys, etc.)
• Insurance coverage
• Any legal contracts with the construction team, architect/engineers, or other parties involved

You may also be asked to provide even more documentation as the information a lender needs can vary by project. At Muevo, we use this property data to properly assess its value and ensure compliance with local regulations.

The Construction Loan Process

When applying and obtaining approval for a construction loan, the process is fairly straight forward.

1. Pre-application phase – Borrower investigates requirements, gathers necessary documentation
2. Loan application and approval – Application and documents are submitted, reviewed, and approved
3. Construction contract and plans review – Lender reviews all required property-related information
4. Loan disbursement and draw schedule determination – Funds are distributed in accordance with outlined draw schedule
5. Inspections and project monitoring – Lender conducts necessary inspections and continually monitors the progress of the project
6. Transition to permanent financing – Draw schedule concludes and regular payment schedule commences

Finding a Private Lender for Construction Loans

When it comes to construction loans, there are some district benefits in working with a private lender. Private lenders offer more flexible terms and loan amounts than traditional lenders.

Their loan application and funding process is much quicker too. Private lenders are also well versed in the local real estate markets in which they operate. In addition, once you have established a partnership with a private lender, there is the potential for additional financing opportunities once your project is successfully completed.

However, to select a private lender that is a good fit for your project, you must consider a number of factors:

• Reputation
• Experience
• Loan terms
• References
• Financial stability

Research and compare private lending companies in your area based on these factors to identify where you can most easily navigate the application and approval process. For example, loan terms can vary considerably. At Muevo, our standard new construction loan terms are as follows:

• Max Loan Amount: $10,000,000
• Max LTC/ARV (Loan to Cost / Loan to After Completed Value):
  – Experienced Investors: The Lesser of 82.5% LTC or 70% ARV.
  – Inexperienced Investors: The Lesser of 65% LTC or 55% ARV.
• Rate: Starting at 10.5%
• Term: 12-24 months
• Payments: Monthly Interest Payments with Balloon at Maturity
• Prepayment penalty: None

Managing Construction Loan Funds

One of the most important steps that must be taken to complete a construction project successfully is to create a detailed budget. This is where the draw process comes in. Rather than receiving a lump sum check, construction loans pay out the loan amount over the course of the project. The installments are called draws, as the lender draws funds from the account. A draw request is necessary to ensure disbursement of the funds.

Many lenders do prorated draws, typically 80% financing/20% equity ratios on every draw. Our loans start once the 20% has been completed. Should you have investors, it is important that they understand the draw process and the difference between money spent and job completed.

In the end, the draw process ensures the proper allocation and use of funds and allows for contingency planning in case there are any unexpected costs.

You have questions. We have answers.

Who are the best hard money lenders in Florida?

Are you looking for private or hard money lenders for your construction loans? Do your research! The best private lenders, whether in Florida or anywhere else, have proven track records that are easily accessible on your County Recorder of Deeds website. Don’t just take their word for it. Ask your lender to show recent transactions they have funded and provide a link to the recorded documents. Beware of companies that advertise as lenders but are just brokers, adding additional fees. As a builder or investor, take your time to research potential lenders and ensure they are legitimate before proceeding. Experience counts. Muevo has brokered over 3,000 loans totaling more than $300 million in the last 10 years. Our loan programs have financed thousands of projects with attractive construction loan rates, reasonable closing costs, and, most crucially, flexible loan terms and speed!

Will the bank or private lender let me be my own general contractor?

Yes, many home builders and contractors utilize construction loans to fund their own construction projects. You will be subject to the same requirements as those developing investment properties using a third-party general contractor. Acting as your own general contractor should not affect your hard money loan as long as you have experience and a history of successfully repaying your construction loans.

Tips for a Successful Construction Loan Experience

Inherent to the construction process are several potential challenges that can impact your financing. These include construction delays and cost overruns, changes in market conditions and interest rates, and unexpected construction issues all of which require contingency plans. To that end, there are several things you can do proactively to mitigate these risks.

First and foremost, be sure you are engaging with professionals, such as seasoned architects and experienced contractors. And do all you can to communicate clearly and constantly with your lender and construction team. Closely monitor the progress of your project and resolve any issues that arise as promptly as possible. Finally, stay organized. One of the best ways you can do that is by maintaining accurate, up-to-date documentation throughout the course of your construction project.

Now that you have a good understanding of how construction loans work, how to qualify, how you benefit, how to select a private lender and how to ensure a smooth experience, you can confidently move forward and secure the financing you need for your construction project. Take the next steps in obtaining a new construction loan with RBI! Click here for more information.

The most relevant commercial real estate lending basics offer far more than the chance to develop key professional relationships and avoid tenancy issues that often coincide with residential rental properties; it offers lucrative income potential that can dwarf more traditional forms of real estate investing. However, as any commercial real estate investors will tell you, the trick isn’t always finding a commercial property, but rather acquiring one of those ever-essential commercial real estate loans that let you bring a property into your portfolio.

While many lending principles apply equally to both residential and commercial real estate loans, there are some key distinctions (and tricks-of-the-trade) about the commercial real estate loan process that can save you time and money, if understood before plunging ahead.

COMMERCIAL REAL ESTATE LENDING BASICS

Commercial property loans, not unlike their single-family counterparts, are the foundation of a great real estate investment. The loans are just as important as the assets themselves—if not more so. At the very least, there are many types of commercial real estate loans which award savvy investors with unique advantages for their particular situations. That said, it’s not enough for investors to simply take the first loan that comes across their table; they need to mind due diligence and get to know the ins-and-outs of commercial real estate loans before making any decisions. The more an investor knows about their own CRE loan and how it applies to their situation, the better.

Individuals Vs. Entities

It is commonplace for residential loans to be made to individuals. However, commercial real estate loans are usually made to entities. Otherwise known as business entities, entities can represent a number of business: corporations, developers, limited partnerships, funds or trusts. It is common for entities like these to receive commercial real estate loans. If for nothing else, receiving a commercial real estate loan may even be why the entity was created in the first place.

Unlike a residential loan where money is given to borrowers based on things like their credit score, en entity won’t have a credit rating. Instead, the entity will have the owners guarantee the loan. That way, the owners of the entity will provide the credit history. In the event of a default, the owners will also give the lender an idea of who they need to recover from. 

For more information on not only how to get a commercial real estate loan, but also today’s commercial real estate lending basics, here are some answers to today’s most common questions on the subject.

WHAT IS A COMMERCIAL REAL ESTATE LOAN?

A commercial real estate loan, or “CRE loan” as it sometimes called, is a debt-based agreement set up between a borrower and financial institution in which the borrower uses funds to acquire commercial (non-residential) property.

One common misconception is to assume the terms “commercial loan” and “commercial real estate loan” are interchangeable. This is not the case. Commercial loans refer to the securing of funds that can be used for non-real estate purposes, such as equipment purchases or operating expenses. As an investor, your aim is a commercial real estate loan; it’s important when navigating the loan process to look for lending institutions that specialize in loans of this kind.

Types Of Commercial Real Estate Loans

Not unlike their single-family counterparts, commercial real estate loans can be found with countless terms and underwritings. The sheer volume of available commercial real estate loans is to help buyers acquire deals with favorable terms and rates. There is practically a loan for every situation a commercial real estate investor could think of. Let’s take a look at some of today’s most popular commercial real estate loans:

• SBA 7(a) Loan For Commercial Real Estate: As their names suggest, SBA 7(a) loans are backed by the U.S. Small Business Administration. While there are several types of SBA loans, this particular one is specifically tailored to those who want to purchase or refinance owner-occupied commercial properties up to $5,000,000.
• CDC / SBA 504 Loan For Commercial Real Estate: Also backed by the U.S. Small Business Administration, CDC / SBA 504 loans are best suited for those who need more than the $5,000,000 offered by SBA 7(a) loans.
• Traditional Commercial Mortgage: Traditional commercial mortgages are offered through institutionalized banks and lenders. Traditional loans tend to range from five to 20 years, but are great for those with good credit and in need go longer loans.
• Commercial Bridge Loan: Commercial bridge loans help investors secure immediate financing, giving them a chance to search for a more long-term solution in the interim. Bridge loans help investors bridge the gape between when they need immediate funding and when they can find a more permanent solution.
• Commercial Hard Money Loan: Commercial hard money loans are reserved for those with a need for short-term loans. They tend to come with higher interest rates, but the price comes with a benefit. Since hard money lenders aren’t associated with an institutionalized bank, borrowers can receive the money fast, and without a perfect credit score.

HOW LONG ARE COMMERCIAL REAL ESTATE LOANS?

Commercial real estate loans can be as long as 30 years or as short as a few months. But generally they’ll have a term, on average, of between 5-30 years.

This doesn’t mean, however, that you necessarily will be paying a monthly commercial mortgage for the full term of the loan. Unlike residential loans, which are fully amortized—or have the balance of the loan broken up in regular, monthly payments—commercial real estate loans often have a set monthly payment period (usually the first five to seven years), and then require a large balloon payment at the end.

This can be either a benefit, or catastrophe, for commercial real estate investors. It’s vital you mind your due diligence to ensure the terms of a commercial real estate loan fit in with your overall real estate investing needs.

CRE Loan Repayment Schedule

The repayment schedule of a commercial real estate loan can last anywhere from five years to 20 years. There are, of course, exceptions, but that seems to be the industry standard. It is worth noting, however, that the amortization period is traditionally longer than the loan itself. Not unlike a residential loan, a commercial real estate loan’s rate can change depending on the length and amortization of it. Investors with a good credit standing may have ore negotiating power than those without.

WHAT ARE COMMERCIAL REAL ESTATE LOAN REQUIREMENTS

There are universal criteria that come into play when approaching a lender about a loan, no matter what type. But when applying for a commercial real estate loan, it’s vital you focus on these key CRE loan requirements:

• Credit History: This has less to do with your credit score, which should be at least 680 or higher, and more to do with ensuring your credit history doesn’t contain recent tax liens, foreclosures, and recent bankruptcies. Otherwise you might find the commercial real estate loan process quite difficult.
• A Low Loan-To-Value (LTV) Ratio: LTV ratio calculates the amount of equity, or collateral, a borrower has in a given property by dividing the loan amount by the appraised value (or purchase price) of a property. (Example: If your loan amount is $97,000 and the property is worth $100,00, your LTV is 97%.) Home buyers securing a residential loan can have an LTV as high as 100%, though usually somewhere in the 80-97% range is more common. Investors seeking a commercial real estate loan will most likely have to sit somewhere in the 65-80% range, at a minimum.
• Business Entity: This is a common mistake many first-time commercial real estate investors make when applying for a loan. But having your business entity set up, before filling out that application, can sometimes make a huge difference to lending institutions.
• Organized Paperwork: This is another overlooked area of the loan application process for many first-time commercial investors. But making sure that every document (and packet) you send to a lender is organized, tidy and doesn’t set off “alarm bells” can sometimes make the difference between getting rejected, and that large commercial real estate loan you need to make your investing dreams come true.
• Online Marketplace Loan: Otherwise known as a “soft money” loan, an online marketplace loan will match borrowers with private investors who help finance commercial properties for a return. These loans will come with an interest rate between conventional banks and hard money lenders, which people often call a “soft” loan. These loans are traditionally short for commercial real estate, as they can last from six months to a few years.
• Joint Venture Loan: In the event a single entity isn’t able to secure a loan by itself, it can join forces with another entity. By seeking a joint venture loan, the loan will be given out based on two entities instead of one, effectively making them partners, but also making it easier for entities who would otherwise not qualify.

Do CRE Loans Have Fixed Or Variable Interest Rates?

This depends on the type of commercial real estate loan you secure. (There are numerous kinds of CRE loans, including a traditional commercial mortgage, bridge loan, hard money loan, and joint venture loan, etc.)

As a general rule, a commercial real estate loan will most likely have a variable rate — that large amount of money borrowed comes at a cost — and be considerably higher than residential real estate loans (sometimes as much as two-three percentage points).

CAN YOU GET A COMMERCIAL REAL ESTATE LOAN WITH NO MONEY DOWN?

It is entirely possible to get a commercial real estate loan without putting any money down. However, it is important to note that the less an entity puts down, the harder it will be to qualify. That said, a down payment is not necessary; there are a number fo different financing methods to use instead.

For example, if an entity can’t come up with the money, they can perhaps partner with another entity and form a joint venture. In that case, the other entity could front the money. Another way to get away without putting any of your own money down is to get a bridge loan. Bridge loans can help investors secure short-term funding for a down payment so that they may negotiate a longer-term loan through a more traditional lender. 

HOW LONG WILL IT TAKE TO GET A COMMERCIAL REAL ESTATE LOAN?

As the commercial loan brokerage Whista detailed in a column recently: “Everyone is going to tell you it should take about 30-45 days to get a commercial loan. Not in this lifetime…if your broker or lender is being honest with you, they will tell you to expect about 45-120 days.”

This doesn’t mean there won’t be exceptions; there may very likely be situations in which you’re able to reduce this commercial loan process considerably. But if your investing strategy depends on a quick timeline, go in knowing you may need to be flexible until you hear back from a lending institution.

HOW TO CALCULATE COMMERCIAL REAL ESTATE LOANS

No calculation can be made until a number of metrics are already in hand. That said, to calculate a commercial real estate loan, an entity will need to obtain the possible loan amount, interest rate, amortization term, and any balloon payments if applicable. With all of the numbers in hand, simply visit an online mortgage calculator and fill in the blank fields. 

HOW TO CALCULATE LOAN-TO-VALUE RATIO

As the name suggests, a loan-to-value ratio gives entities a way to measure the value of a loan against the value of a property. In order to calculate the loan-to-value ratio, or simply LTV, divide the amount of the loan by the property’s appraised value or its purchase price, whichever is lower. 

SUMMARY

Learning today’s commercial real estate lending basics isn’t as hard as many would assume, but they do require far more diligence, preparation, patience, and paperwork then a residential mortgage loan; that’s because of the large amount of funds being requested. It is a good to remember that commercial real estate financing is more complicated and logistically challenging; they have to be due to the increased risk. There are many moving parts—both legal and financial. However, if you’re able to stay persistent and focused through the process, you might find a life-changing transaction just around the corner.

---

Key Takeaways

• Understanding how to finance commercial real estate is one of the first steps for investors looking to break out of the residential industry.
• With a firm grasp on the commercial real estate financing basics, investors should have a slid commercial foundation to build off of.
• Commercial real estate loans are a bit more complex than residential loans, but they are necessary for larger projects further down investors’ careers.

Amid declining property values in a tight lending environment, all-cash buyers will benefit from bargain pricing, CBRE predicts in its latest outlook.

CBRE expects an economic slowdown in the U.S. next year that will impact commercial real estate with bank lending remaining tight throughout 2024, investment volume decreasing 5 percent, cap rates expanding and property values declining.

But the U.S. may be able to avoid a recession and interest rates should be reduced later in the year as activity picks up in the second half of 2024, according to the firm’s 2024 U.S. real estate outlook.

Property types with relatively strong fundamentals, including demand, vacancy and rent growth, like industrial, retail, multifamily and data centers will be most favored by investors in 2024, according to CBRE.

Richard Barkham, CBRE global chief economist & global head of research, said in prepared remarks there is still some more pain ahead for the commercial real estate industry in 2024, including overall investment volumes remaining down for the year. But he expects an upturn by the second half and overall leasing activity to pick up as well. He notes stabilization and the early stages of recovery are also not far off.

North America dry powder by strategy. Chart courtesy of CBRE

With inflation easing, the Federal Reserve is expected to begin reducing short-term interest rates in 2024, possibly to around 4.25 percent by the end of the year and to 3.5 percent in 2025.

There should be buying opportunities in the first half of 2024, especially for all-cash buyers like sovereign wealth funds, pension funds and endowments. CBRE expects the lowest pricing for assets will occur in the first two quarters.

The report notes increasing cap rates, which have risen by about 150 basis points between early 2022 and late 2023 depending on the market and asset type, imply a 20 percent decline in values for most property types. For office, the increase was higher, rising by at least 200 basis points.

“We think cap rates will expand by another 25 to 50 basis points in 2024, with a corresponding 5 percent to 15 percent decrease in values,” the report states.

CBRE expects real estate values for most property types will likely not stabilize before mid-2024.

Historical & forecast cap rates. Chart courtesy of CBRE

Office vacancies to peak

The outlook expects another tough year ahead for the office market with office vacancy peaking at nearly 20 percent in 2024, up from 18.4 in the third quarter of 2023 and 12.1 percent at the end of 2019.

CBRE notes a slowing economy in the first part of 2024 and increasing acceptance of hybrid working arrangements will continue to limit office demand next year. The 2023 U.S. Office Occupier Sentiment Survey found more than half of the respondents planned to further reduce their office space in 2024.

Companies looking to lease less than 20,000 square feet will account for most of the leasing activity, according to CBRE. Leasing activity should rise by 5 percent in 2024, however that is still 20 to 25 percent lower than pre-pandemic levels.

---

READ ALSO: How Incentives Boost Office Conversions

---

Meanwhile, the flight-to-quality trend should continue with occupiers seeking space in newer, prime office properties with the best amenities. But office construction levels will be at their lowest levels since 2024, which could result in a shortage of that sought-after Class A space later in the year. CBRE forecasts that average prime office asking rent will increase by as much as 3 percent.

On the investment side, the higher-for-longer outlook for interest rates will cause some owners of Class B and C office assets to sell due to further erosion in values. Many of those older buildings that lack modern amenities will continue to struggle to attract tenants, so a higher percentage of older office assets are likely to be converted to other uses. While office conversions can be challenging, the report notes the federal government is providing grants, low-interest loans and tax incentives and local governments are also offering incentives.

Not all office markets are suffering, and the outlook shines a light on several active cities in the U.S. In Nashville, Tenn., where absorption and rents are up, demand for new office space is expected to remain strong. Miami is seeing one of the highest rent increases in the country and the vacancy rate is dropping as new-to-the market tenants are keeping the market healthy. Las Vegas has seen an uptick in leasing activity and strong preleasing at speculative projects, putting the market in a strong position heading into 2024.

Industrial sector slowdown

The industrial sector should see net absorption similar to 2023 levels and rent growth moderating to 8 percent. Construction deliveries are tapering off and expected to continue to slow down due to economic uncertainty, tight lending conditions and oversupply in some markets.

---

READ ALSO: Property Management Success: How AI Boosts Industrial

---

Vacancy is expected to hit 5 percent by mid-2024, up from 4.2 percent in the third quarter of 2023 but decrease later in the year due to the decline in new construction. Looking ahead, CBRE is forecasting a 7.5 percent increase in U.S. industrial production over the next five years as more occupiers improve their supply chains by adding more import locations and onshoring or nearshoring of manufacturing operations. Markets to watch include Austin and San Antonio in Texas; Nashville; Salt Lake City and Central Florida.

Retail’s declining availability

The retail sector is also facing a lack of new construction. That will contribute to retail availability rates dropping by 20 basis points next year to 4.6 percent. Asking rent growth is expected to drop below 2 percent for most of 2024 but go above 2 percent by the fourth quarter.

---

READ ALSO: Mixed Shopping Cart for Retail

---

Open-air suburban retail centers will see demand grow faster than other retail formats and neighborhood, community and strip centers will have stable occupancy throughout the year. Look for traditional mall-based retailers to seek other new formats outside the malls for expansion. Texas markets are expected to see more luxury brands. Other markets to watch include Orlando, Fla.; Charlotte, N.C.; Denver; San Francisco and Orange County, Calif.

AI to fuel increased data center demand

The data center market is seeing growth, often driven by advances in cloud-based solutions, artificial intelligence and other new applications and technologies. CBRE notes demand will continue to be higher than supply and construction in major markets will exceed 3,000 MW in 2024, up from the company’s 2023 estimate of 2.500 MW. Markets to watch include Austin; San Antonio and Omaha, Neb.

https://www.commercialsearch.com/news/what-to-expect-for-cre-in-2024/

So, you want to find the best rental property deal and invest some hard-earned money.

This is a common query from my readers.

What about the potential to make some serious shekels by becoming the mortgage bank instead of the landlord? Where else besides private mortgages or so-called “hard-money lending” can you find a 10% rate of return in a term of three years?

Hard-money lending is a close cousin to more direct rental investing. It’s worth considering. Why? Certain property owners will pay handsomely because, for one reason or another, they can’t qualify for cheaper institutional financing from commercial banks, Fannie, Freddie and the like.

Typically a hard money loan is arranged and funded for one- to four-unit complexes, small apartment buildings and retail strip malls. An appraisal may be required, and title insurance will always be required to protect all concerned.

“The going market rate is around 10% to 11%,” said Ken Thayer, president of Newport Beach-based Residential First Capital. “Up to 10 people can invest in one fractionalized note. Ten people each put up $100,000 on a $1 million note as an example.”

Thayer, who’s been in the lending business since 1986, said 90% of his deals are for one to four units. Half the deals are seconds with an average loan amount of $300,000 or $600,000 for first mortgages. He typically stays under $3.5 million for any deal.

Private money mortgages, called a deed of trust in California, can be in first, second or third position as a lien against real property.

Thayer’s investment customers pay 1.25% of the balance to service the notes. Servicing fees such as Thayer’s are all over the map. You can find servicers charging less or even a lot less. And, of course, some servicers charge more than 1.25%. For example, if the note to the property owner is 11% and the servicer charges 1%, then the investor would receive a net 10% return excluding ordinary income taxes.

Let’s say five investors are investing $200,000 in a $1 million hard-money loan. If the note rate is 10% and Thayer charges each investor 1.25% to service, each investor would earn 8.75%. Or look at it this way: $200,000 x 8.75% =  $17,500 divided by 12 months $1,458.33 to each investor each month as an interest-only payment.

Even though Thayer services $110 million in hard money loans, he thinks real estate rentals are still a better deal. “I would have made more money sticking it out in real estate,” he told me.

Thayer makes a good point. California homes, even with prices softening, are still riding 25-35% appreciation, which for long-term investors tops most hard-money profits.

My advice: Your best protection against the borrower who is willing to pay you a lot more because he or she can’t get a bank loan is the property’s remaining equity. If there is 50% remaining equity, the investor is relatively safe even if the borrower should default and property values continue to soften. Nobody wants to foreclose, but that offers a measure of protection.

In the current market, I think you’d be better off investing in hard-money loans than an actual rental property for the following reasons:

1) Real estate values are falling. (Nobody wants to catch a falling knife)

2) Carrying costs (mortgage payment of principal, interest, taxes, insurance and any HOA) are currently high.

3) Utility costs are ginormous, cutting into profit

4) California rent forbearances still lurk in these post-COVID days

5) There is talk of national rent “protections”

Back to the money. What about the staying power of these lofty 10% returns on hard-money investing? Can you get an even higher yield if we see more inflation?

Conventional mortgage rates hit an all-time low of 2.65% in January 2021, according to Freddie Mac. Even though rates have much improved over the past few months they are still very high at 6.09% as of Feb. 2.

The prime rate hit a low of 3.25% in March 2020. (December 2008 was the last time the prime rate was this low). On Feb. 1, Wall Street’s prime rate climbed to 7.75%. It hasn’t been that high since September 2007. And it’s all but certain short-term borrowing costs are going to rise more in the near term.

The typical private money loan is two to three years with a balloon payment owed by the property owner at the end, according to attorney Dennis Doss of Doss Law, an expert on private money mortgages.

As Thayer explained, Wall Street money swooped in during the COVID days, bringing cheaper alternatives for borrowers needing hard money, maybe in the 9% range. But that train has left the station. Rates have moved back up.

So, how much more can you get?

“There is no maximum rate (statutory maximum) for brokered-arranged loans,” said Doss. “The rate is market dependent.”

So why not just stick with buying a rental property? Private mortgages require little to no effort on the investor’s part while rental properties require a ton of effort to manage.

How do you know who to invest your money with? Scammers are everywhere.

“For consumers trying to ensure they are working with a good private money broker, we’d suggest they check the broker’s license, talk to references, read online reviews, and get information from Better Business Bureau, chamber of commerce and other community groups,” said Rick Lopes, assistant commissioner with the California Department of Real Estate.

Doss tells investors they should figure out how aggressive the private money broker is when it comes to finding and evaluating properties on which to issue loans. Ask for a copy of the broker’s most recent business activities reports. Check for their borrowers’ delinquency rates, which ideally “should be 5% to 7% or less (60-90 days late or more),” he said.

California law requires a brokerage to review any investor’s suitability to invest in the trust deed based on a questionnaire (California Department of Real Estate form RE870). It looks at the investors’ net worth, income and investment background. The investment does not exceed 10% of the investors’ net worth minus home, furnishings, autos or 10% of their income.

Freddie Mac rate news

The 30-year fixed rate averaged 6.09%, 4 basis points lower than last week. The 15-year fixed rate averaged 5.14%, 3 basis points lower than last week.

The Mortgage Bankers Association reported a 9% mortgage application decrease from last week.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $726,200 loan, last year’s payment was $1,115 less than this week’s payment of $4,396.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 4.875%, a 15-year conventional at 4.5%, a 30-year conventional at 5.25%, a 15-year conventional high balance at 4.99% ($726,201 to $1,089,300), a 30-year high balance conventional at 5.625% and a jumbo 30-year fixed at 6.125%.

Note: The 30-year FHA conforming loan is limited to loans of $644,000 in the Inland Empire and $726,200 in LA and Orange counties.

Eye catcher loan program of the week: A 30-year VA fixed rate at 4.875% with 1 point cost.

The best tenant screening services enable landlords and property managers to run reliable credit history, criminal background checks, employment and income verification, and eviction history at fair rates. These platforms help protect your investments while saving time, money, and energy while looking for the right tenants. Depending on state laws, landlords can charge tenants for the application and background check fees to cover the cost.

We reviewed dozens of platforms to arrive at the top six best tenant screening services based on screening features, pricing, ease of use, customer support, and online reviews:

• Buildium: Best overall for its comprehensive tenant screening services at affordable rates
• Avail: Ideal for independent landlords who need free customizable screening reports and automated reference checks
• RentRedi: Best mobile property management app for tenant screening
• Apartments.com: Best free property management platform with auto-tenant screening feature and shareable tenant screening reports
• TurboTenant: Recommended for independent landlords looking for free tenant screening service and free rental advertising
• LeaseRunner: Great for small landlords who prefer flexible ala carte and individual tenant screening reports

Best Tenant Screening Services At a Glance

Tenant Screening Services	Tenant Screening Price	Free Plan	Mobile App	Customer Support
	$15 per screening for landlordsor$30 per screening for applicants	✕	✓	Phone, live chat, and email
	Visit Buildium
	Pricing varies per state	✓	✕	Phone, live chat, and email
	Visit Avail
	$35 per application	✕	✓	Phone, live chat, and email
	Visit RentRedi
	$29 per application	✕	✓App is best for tenants	Phone and email
	Visit Apartments.com
	$55 per application	✓	✓	Phone, live chat, and email
	Visit TurboTenant
	$60 per complete application	✓	✕	Phone and email
	Visit LeaseRunner

See fullscreen table

Online tenant screening enables you to carefully filter applicants and find the best tenants faster through comprehensive credit history, eviction history, and criminal background reports. Take our quiz below to find the best tenant screening service for your rental business.

Buildium: Best Overall Tenant Screening Service

Overall Score: 5.00 / 5

What We Like

• All-in-one property management solution
• Supports multiple listing platforms
• Tenant screening fees are more affordable than others on this list

• No free plan
• Expensive subscription rates
• Phone support available in more expensive subscriptions
• Website chat support is handled by a chatbot instead of a live person

Why should you choose Buildium?

Buildium is highly recommended for landlords with multiple properties of up to 5,000 units (or more). As a tenant screening service, Buildium helps you get access to comprehensive credit, criminal, and eviction history reports. Its tenant screening services are relatively cheaper than similar providers, especially when shouldered by the landlord.

Visit Buildium 

Buildium is our best overall screening service because of its comprehensive software features, affordable tenant screening reports, and all-in-one property management solution. Powered by TransUnion, a US credit reporting agency, landlords can access full credit, criminal, and eviction data to help them avoid tenant scams. You only need to make a request and set custom requirements, and Buildium will begin tenant credit and background checks for you.

Landlords have two screening options: basic and premium. Unlike basic tenant screening, the premium option allows for customized thresholds on recommendations, requires minimal applicant involvement, and delivers faster results. Both tenant screening plans include rental recommendations from TransUnion, a full credit report, identity verification, eviction history, and background check for renters.

Buildium will automatically send tenants a reminder to complete the rental application at the three-day mark and the seven-day mark after the process begins. If you’re still considering your options, take advantage of Buildium’s 14-day free trial, allowing you to experience the platform before committing to a subscription.

Additional Buildium Features

• Tenant screening criteria: set minimum credit score and other qualifying questions in the application form like pets, move-in dates, and deposits to easily filter qualified from unqualified applicants and stay aligned with landlord-tenant laws
• Property management: includes several property management functions, such as accounting, maintenance, tasks, violations, resident and board member communications, and online portals
• Marketing website: a do-it-yourself, free, fully integrated website for property managers, hosted by Buildium
• eSignatures: manage all leasing processes online and get documents signed digitally
• Performance and business analytics: receive insights into your residents’ activities through the resident center and a detailed analysis of your business performance using key leasing metrics

Buildium Customer Feedback

Customers rated Buildium 4.5 out of 5 because of its robust platform and multiple tools available for property management. They also like the ability to switch between different properties in their portfolio. One client said the property management automation helped them save time and money. Landlords also praised Buildium’s customer support for its professional assistance.

In less positive Buildium reviews, a client found the lease processing procedures in the basic plan complicated. Another client said it was difficult to set up the late fee charge and thought the settings for late fees were too limited. Buildium doesn’t have a free plan, and its plans are more expensive than other software on this list. If you’re managing a few properties and want to try a free property management service, we recommend Avail.

Buildium Pricing

Buildium offers tiered subscription plans that include basic and premium resident screening services. In the basic tenant screening, landlords have the option to cover the cost of screening themselves or pass the cost on to the applicant. With basic tenant screening, landlords pay $15 per screening or $30 if paid by the applicant, whereas the premium screening is $18 per screening.

Aside from paying the tenant screening service fees, Buildium account holders also need to pay a monthly subscription. Check out its plan inclusions below:

• Essential: starts at $50, paid monthly; this includes basic tenant screening, rental accounting, maintenance, tasks violation, ticket support, and online portals.
• Growth: starts at $160, paid monthly; aside from features included in the Essential plan, users also get premium tenant screening, unlimited e-signatures, five free bank accounts, standard reports, performance, business analytics, and live phone support.
• Premium: starts at $460, paid monthly; includes everything in the Growth plan, plus open API, Buildium Rewards, priority support, and a dedicated growth consultant.

Visit Buildium

Avail: Best Free Customizable Tenant Screening Service With Automated Reference Checks

Checks

Overall Score: 4.88 / 5

What We Like

• Option to pass on tenant screening fees to applicants
• Comprehensive and customizable tenant screening reports
• Applicant communication and message center available on the platform
• Free subscription plan

• No mobile app
• Tenant screening fees may vary by location
• Website chat support is handled by a chatbot instead of a live person

Why should you choose Avail?

Avail is best for small and mid-sized landlords looking for a free property management platform with affordable tenant screening services and automated reference checks. While tenant screening reports are not free, landlords can choose to pass on these fees to the applicant.

Visit Avail 

If you’re looking for free property management software with customizable renter reports, we recommend Avail. It provides online tenant screening services, focusing on background and credit checks for landlords—whether you need a TransUnion report, national criminal history, prior eviction data, or a complete tenant background check. Landlords could also customize application settings and screening questions to make sure tenants qualify for all their requirements.

Another unique feature of Avail is its automated reference checks. Once prospects complete the online renter application form, Avail automatically contacts their previous landlords to see whether they paid their rent on time and took care of the rental property. The platform also enables landlords to conduct income verification and documentation to ensure prospects are able to pay the rent on time.

Unlike most service providers on this list, Avail has a free subscription plan where landlords can enjoy comprehensive property management features, such as syndicated listings, online rent collection, and maintenance tracking at no cost to them. It also helps landlords streamline their communication with existing tenants in one software.

Additional Avail Features

Sample Tenant Screening Report (Source: Avail)

• Rental listings: create one rental listing to post across multiple sites, such as Realtor.com and Trulia, with one click
• Digital leases: access lawyer-reviewed, state-specific lease agreement templates, including all the necessary disclosures, attachments, and clauses
• Online rent collection: allow tenants to pay rent online, schedule upcoming payments, issue late fees, track rental income, and get paid faster with Avail’s FastPay
• Maintenance tracking: track repairs with in-app messaging, photos, and automatic maintenance records
• Rent price analysis: complete rental market trends and rent comps so you can set competitive rent prices

Avail Customer Feedback

Avail’s subscribers praise the platform for its ease of use, affordable pricing, and superb customer support, giving it a 4.6 out of 5-star review. One user said that Avail made the background and rental credit check, as well as communicating with applicants, easy. One property manager enjoyed the syndication between all the websites when listing available units, which helped him find tenants faster.

While most reviews are positive, some experienced glitchy features, lags on the screen, and other technical issues. Avail doesn’t currently have an app, which could be inconvenient for landlords who are always on the go. If you’re looking for a property management app with a mobile tenant screening feature, check out RentRedi or Buildium.

Avail Pricing

Avail offers two subscription plans: unlimited free and unlimited plus. Both subscription plans include tenant screening services that you can purchase ala carte or as a bundled package. The price of each screening report varies depending on the state but may start from $30 each or $55 for bundled packages. Landlords can pay the fees themselves or pass them on to the applicant.

To see which Avail subscription plan is perfect for your business, check the table below:

• Unlimited Free: free; includes syndicated listings, credit and criminal screening, state-specific leases, online rent payments, and maintenance tracking
• Unlimited Plus: Starts at $7 per unit monthly; includes everything in the Unlimited Free plan plus next-day rent payments, waived ACH fees, custom applications and leases, clone and reuse custom lease agreement, and create a properties website

Visit Avail

RentRedi: Excellent for Mobile Tenant Screening Process

Overall Score: 4.82 / 5

What We Like

• Auto-tenant screening feature
• More affordable tenant screening service than other platforms
• Multiple renewal subscription options
• Free listings on Realtor.com and Doorsteps

• No free trial and no free subscription plan
• No tiered plans with ala carte features
• No automated reference checks

Why should you choose RentRedi?

RentRedi is perfect for small to mid-sized landlords who are always on the go. With RentRedi’s robust mobile app, you can easily send tenant screening requests and have the applicant approve the request on their phone.

Visit RentRedi 

RentRedi is perfect for landlords who want the convenience of mobile technology when screening applicants. Landlords can send requests, view screening reports, and accept applications directly on the mobile app—no need to log in and out on a web browser. As a tenant screening service, RentRedi provides full credit, criminal, and eviction reports. RentRedi also has an auto-tenant screening feature, which allows landlords to automatically receive a completed tenant screening report once a prospect submits an application.

To run a credit background check for tenants, RentRedi has partnered with TransUnion and uses ResidentScore, which predicts rental eviction risk 15% better than traditional credit scores. It also reviews over 370 million records from state and national databases to make sure you get a thorough criminal report. Additionally, RentRedi checks 27 million eviction records through a large eviction database subject to The Fair Credit Reporting Act (FCRA), which covers all 50 states.

RentRedi has other key features that allow you to automate your rental processes such as online rent collection and accounting, tenant prequalifications and applications, maintenance requests and coordination, listing syndications and advertising, and tenant and team communications. These features help landlords protect their real estate investments, filter the right applicants, and manage existing tenants.

Additional RentRedi Features

• Rent collection: tenants can send money via credit card, ACH, cash, and banking. Landlords receive payments within three to four business days and can export payments to spreadsheets or QuickBooks
• Prequalifications and applications: set prequalification questions to immediately determine whether an applicant qualifies or not before scheduling a tour
• Maintenance requests and coordination: outsource managing maintenance requests and get automatic maintenance status updates sent to the tenant
• Listings and marketing: free Realtor and Doorsteps listing syndications using the RentRedi dashboard; add virtual tour options to property listings and have a free professionally designed marketing page to share on your websites and other marketing sites

RentRedi Customer Feedback

Customers enjoy using RentRedi because of its easy setup and responsive customer support. Landlords found the mobile app very convenient and user-friendly, especially the ability to properly screen applicants, collect rents, notify tenants, and respond to maintenance requests directly on their mobile phones. Because of these reasons, RentRedi received a 4.5 out of 5-star rating.

While most customers found RentRedi helpful and convenient, a few customers said they don’t use some of the features included in their subscriptions. This is not cost-efficient since subscribers pay a flat monthly or annual fee. Some also experienced technical and update issues with the mobile app. If you’re budget conscious and prefer to purchase ala carte features instead, check out LeaseRunner.

RentRedi Pricing

Landlords can enjoy RentRedi’s property management features, including tenant screening, by paying a monthly subscription fee of as low as $9 monthly. Prospective tenants will also have to pay $35 for the rental background check.

• Monthly subscription: Starts at $19.95 per month
• Six-month subscription: Starts at $18 per month
• Annual subscription: Starts at $9 per month

Visit RentRedi

Apartments.com: Recommended for Free Auto-tenant Screening Feature & Shareable Reports

Overall Score: 4.73 / 5

What We Like

• All-in-one property management platform with an auto-tenant screening feature
• Comprehensive tenant screening reports
• Screening reports are shareable up to 10 participating landlords

• No mobile app features available for property managers
• Subscription plans and premium pricing are not disclosed on the website
• No live chat support

Why should you choose Apartments.com?

Apartments.com is ideal for independent landlords looking for free tenant screening services and free rent collection software. Once prospective tenants apply for your rental property, they will be required to pay an application fee, covering their credit, eviction, and criminal reports.

Visit Apartments.com 

If you need fast and easy access to tenant screening reports when an applicant clicks the “Apply” button on your listing, we recommend using Apartments.com. Once a renter applies to your listing, they must pay $29 to run their TransUnion credit, criminal, and eviction reports online. Another unique feature of Apartments.com is that it allows an applicant’s screening report to be shared with other participating rentals on the site. The tenant’s application can be used for up to ten (10) different listings and is valid within 30 days.

While the screening reports are free to the landlord, applicants need to pay for their reports once they apply for your property on Apartments.com. This reduces the financial burden on landlords. However, landlords have the option to pay the application fee if they prefer. The applicant’s data are also securely stored online so landlords can access it wherever they are.

Apartments.com is also an all-in-one suite of property management tools that make the rental process paperless and more convenient for landlords and renters. Aside from screening tenants, Apartments.com allows you to list your property, receive applications, generate a lease, collect payments, manage residents, organize expenses, and track maintenance from anywhere with a reliable internet connection.

Additional Apartments.com Features

• Auto-tenant screening: get detailed renter information, including income-to-rent-ratio, employment status, household info, and rental history, once applicants submit their application through your Apartments.com listing
• Property listings and virtual tours: list your properties on Apartment.com and conduct property tours online and from anywhere
• Online lease agreements: creating state-compliant online lease agreements customized to your locale; both you and the tenants can sign the lease documents with an e-Signature and access documents online
• Resident management: keep and access all of your tenants’ relevant information securely in one centralized location; share documents with tenants online
• Expense tracking: organize, track, and export your rental property expenses from anywhere to make tax preparation easier
• Maintenance requests: receive and manage maintenance requests directly from tenants on your online dashboard

Apartments.com Customer Feedback

Apartments.com received mixed reviews, giving it an average 3.9 out of 5-star review. Loyal customers who have been using Apartments.com for several years love the platform for its rental advertising and online rental collection features. A landlord also appreciated that Apartments.com allows interested tenants and existing renters to communicate with them directly by sending messages and requests on the platform.

Some landlords complained of expensive premium rental advertising. A customer also found the platform’s back-end “cumbersome to make corrections or changes to a listing.” Furthermore, property managers are currently unable to utilize the mobile app, which means they have to log in to their accounts through a web browser to update and maintain listings. If you’re looking for a free tenant screening service with a mobile app, check out RentRedi and TurboTenant.

Apartments.com Pricing

Apartments.com’s tenant screening feature is free for landlords. Applicants, however, have to pay $29 (plus tax) for their application and screening reports. The application is reusable, and screening reports can be shared with up to ten (10) participating Apartments.com landlords for 30 days.

Visit Apartments.com

TurboTenant: Best Free Tenant Screening Services & Free Rental Advertising

Overall Score: 4.10 / 5

What We Like

• Free software version without trial limit
• Comprehensive tenant screening reports
• Past landlord references
• Mobile app

• No phone support available for free subscribers
• Tenant application fee more expensive than other tenant screening services
• Rental accounting feature available as an add-on service to any subscription plan

Why should you choose TurboTenant?

TurboTenant is great for independent landlords who need an easy-to-use and free software platform to manage their rental properties and find good applicants. Its free tenant screening feature provides you with complete credit, criminal, and eviction reports, as well as past landlord references. It also allows you to market your rental vacancies, receive online applications, accept rent payments, track expenses, and even manage maintenance requests for free.

Visit TurboTenant 

For property managers looking for free property management software, TurboTenant gives you a complete snapshot of a prospective tenant’s financial stability and credibility through a quick and easy tenant screening process at no cost to you. In partnership with TransUnion, landlords can run a comprehensive credit report that includes debt payment history, new loans, history of bankruptcies, and even late payments in their rental history.

TurboTenant also helps you gain insights into their previous rentals and landlords, as well as verify their income and employment. The software searches over millions of criminal records across the country, so you know if an applicant might pose any threat to your business and other tenants. Furthermore, landlords will get a detailed report of past evictions of a would-be renter.

Aside from tenant screening, TurboTenant helps landlords stay organized through its other property management features, including rental marketing, lease agreements, document management, rent collection, maintenance requests, and expense tracking. These features are free to use for landlords, with premium upgrades available.

Additional TurboTenant Features

• Rental advertising: advertise properties for free on multiple rental listing websites like Realtor.com, ApartmentList, Rent.com, and Craigslist; create professional listing pages for your properties
• Lease agreements: customize a state-specific online lease agreement crafted by local lawyers and expert landlords
• Rent payments: securely collect rent online, connect your bank account, and set up automatic monthly charges and late fees
• Maintenance requests: manage and keep track of tenant requests online
• Expense tracking: organize and monitor your expenses in a purpose-built software and export them as a CSV file when filing taxes

TurboTenant Customer Feedback

TurboTenant’s customers love the platform because of its free features with upgrade options and responsive support staff. Another customer loved its all-in-one property management solution that enables them to advertise their properties across multiple sites, communicate with potential tenants, pre-screen and screen applicants, and accept applications.

On the other hand, some customers complained of having issues with their accounts, like suddenly blocked or suspended accounts. Others also don’t like the long period of time it takes for their tenants’ rents to be deposited in their bank accounts. TurboTenant’s screening fees can also be more expensive than others on this list. Because of these mixed reviews, TurboTenant received a 3.7 out of 5-star review. For more affordable options, check out Avail, Apartments.com, or LeaseRunner.

TurboTenant Pricing

Using TurboTenant’s tenant screening feature is free for landlords, although tenants have to pay $55, which covers the application fee and tenant screening reports. You can choose to pay the fee yourself if you prefer or if you’ve already collected an application fee from the applicant. TurboTenant also has free and premium subscription plans that give you access to multiple property management features.

• Free Plan: free; includes unlimited properties, rental advertising, lead management, applications and screening, automated reference checks, rent payment, expense tracking, maintenance requests, messaging, document management, chat support, and one connected bank account
• Premium Plan: $4.92 monthly; includes everything in the Free Plan plus expedited rent payouts, connected bank accounts, state-specific lease agreements, lease addendums, e-signatures, and landlords forms pack

Visit TurboTenant

LeaseRunner: Best for Its Ala Carte Tenant Screening Reports

Overall Score: 3.98 / 5

What We Like

• Customizable tenant screening report
• Free online rental application form
• No monthly subscription fees
• Mobile app

• No bundled packages
• No live chat support
• Total cost for complete tenant screening reports is more expensive than other services

Why should you choose LeaseRunner?

LeaseRunner is ideal for landlords managing a few properties and who want to run individual tenant screening reports. For instance, if you only need a credit score report, you don’t have to pay for criminal and eviction history records if you don’t need them. Its ala carte features also enable landlords to automate certain property management processes like rent collection and digital lease with e-signatures.

Visit LeaseRunner 

For independent landlords managing a few rental properties, LeaseRunner is a practical choice because of its flexible pricing and ala carte tenant screening menu. LeaseRunner has no subscription and monthly fees. Instead, you can choose the type of service you want. This allows you to mix and match tenant screening reports based on your preference, local rental market, and ideal renter’s profile, and pay only for what you really need. For example, you can request a criminal background check but not a credit check, or vice versa.

LeaseRunner has an extensive selection of screening services, including tenant criminal background, credit record, financial profile, and eviction history reports. It has advanced applicant record matching and compares over 36 million eviction records, 300 million credit records, 500 million criminal records, as well as credit, court, government, and bank data.

LeaseRunner also has other features that help landlords automate their rental processes. It offers free rental application form templates, paperless state-specific lease agreements with e-signatures, ACH (Automated Clearing House) online rent collection, and rental ad tools. The platform also has 5,400 bank integrations. What’s more, LeaseRunner is fully optimized for mobile use and is compliant with Fair Housing Act making it a convenient and secure property management platform for small landlords.

Additional LeaseRunner Features

Sample Eviction History Report (Source: LeaseRunner)

• Applicant authorization: applicants can authorize the release of their credit, financial, eviction, and criminal records from their email and don’t need to create a LeaseRunner account or go to the website.
• Rental ads: post rental listings to multiple sites like Facebook, Twitter, and Craigslist and generate application buttons and links
• Digital rental application: email the application link to tenants so they can apply online or via smartphone
• Digital lease with e-signature: compile multiple documents and email them for e-signature
• Online rent payment: collect rent and fees by bank debit through the Tenant Payment Center or autopay

LeaseRunner Customer Feedback

Landlords who use LeaseRunner like the platform for its inexpensive and easy-to-use features, giving it a 4.6 out of 5-star review. One customer even commented that it is “the easiest tenant application and screening process for landlords.” Another praised the platform because it made listing, creating, and signing leases easy. A loyal customer of ten (10) years particularly liked that LeaseRunner allows tenants to accomplish an application for free and conduct the background and credit check separately if they decide to move forward.

While customers find the platform useful, one customer commented on LeaseRunner’s “buggy” software. Another landlord complained of receiving incomplete information on an applicant’s credit score and financial profile. Further, LeaseRunner does not offer packages, and the total cost of its complete tenant screening report can be more expensive than other tenant screening services. If you’re an independent landlord with few properties, you can check Avail’s monthly free and affordable subscription plans.

LeaseRunner Pricing

LeaseRunner can provide you with detailed tenant reports at competitive rates. Unlike other tenant screening services on this list, landlords can choose to only pay for individual background reports for $10. However, if you need complete tenant screening information, the costs would amount to $60, which is more expensive than other services. Below are the prices of each type of tenant screening report:

• Credit report: $21
• Criminal report: $16
• Financial profile: $10
• Eviction report: $13

Visit LeaseRunner

How We Evaluated the Top Tenant Screening Services

To determine the best tenant screening services, we evaluated platforms based on features related to comprehensive and reliable background checks and identity verification. The pricing structures were also compared, so property managers and landlords know which service is right for their budget. We also reviewed each platform’s ease of use and available customer support, which are essential to successfully screen tenants in the most efficient way possible.

Based on our evaluation, Buildium is the best tenant background check company that provides comprehensive tenant screening reports at more affordable rates than others. Landlords can easily run a renter’s check, including credit history, criminal background, and eviction report, from anywhere with an internet connection. Buildium also provides an all-in-one property management solution with features like online rental listings and marketing, real estate accounting, rent collection, and maintenance requests.

Below are the criteria we used to determine the top tenant screening companies for landlords and property managers.

• BREAKDOWN

25%

Tenant Screening Features

20%

Pricing

20%

General Features

10%

Ease of Use

10%

Customer Reviews

10%

Expert Score

5%

Help & Support

*Percentages of overall score

Screening tenants for a rental property is a critical process that can significantly impact a property’s success and profitability. By implementing effective screening methods, landlords can attract reliable and responsible tenants who will not only meet their rental obligations but also help property owners maximize the potential of their investment. In this article, we explore seven key steps in screening tenants to ensure landlords make informed decisions to fill their vacancies while adhering to Fair Housing Laws.

Property owners should plan ahead by utilizing a tenant screening checklist to guarantee they’ve covered the necessary steps in the tenant screening process. Download our complimentary checklist and decision flowchart below, which includes rental application items, ways to verify income and employment, and tenant interview questions.

1. Understand & Comply With Fair Housing Laws

It is important to have a comprehensive understanding of Fair Housing Laws before embarking on the apartment screening process. Familiarize yourself with federal, state, and local regulations to ensure compliance and to help you avoid any discriminatory practices. Landlords must treat all applicants fairly and equally, without any bias based on race, color, religion, sex, national origin, familial status, or disability.

To avoid breaking fair housing laws, landlords should follow these general guidelines:

• Treat all applicants equally: Treat every applicant fairly and equally regardless of their background or characteristics. Avoid any form of discrimination or bias during the process of screening tenants.
• Use consistent screening criteria: Develop a clear set of qualifications and requirements based on factors like income, rental history, creditworthiness, and references. Apply these criteria uniformly for all applicants and avoid making exceptions for specific individuals or groups.
• Advertise responsibly: When advertising your rental property, avoid any language, images, or statements that could be interpreted as discriminatory. Focus on describing the property features, amenities, and location rather than using language that targets specific groups of people.
• Ask legal and objective screening questions: During interviews or interactions with applicants, ask only legal and objective screening questions directly related to their qualifications as tenants. Avoid inquiries about protected characteristics, family status, and disabilities.
• Maintain accurate records: Keep detailed records of all interactions, communications, applications, and screening results. Documentation can help demonstrate that your tenant selection process is fair and unbiased.
• Use screening services: Utilize reputable tenant screening services or credit reporting agencies to conduct credit checks and background checks during the verification processes. These services are equipped to handle sensitive information and ensure compliance with fair housing laws.

2. Use a Rental Application to Prescreen Tenants

Utilizing a well-designed rental application is a practical step in the tenant screening process to protect your investment properties. A comprehensive application helps gather essential information like personal details, employment history, income verification, references, and consent for background and credit checks. The application acts as a prescreening tool, allowing you to screen tenants and determine their suitability for your rental property.

A rental application should include several key pieces of information to help landlords assess the fit of potential tenants. Here are some essential details that should be listed on your application:

• Personal and contact information: The application should require the applicant’s full name, current address, phone number, and email address. This information allows landlords to contact applicants and verify their identity.
• Employment history: Requesting details about the applicant’s employment history, including current and previous employers, job titles, and durations of employment, helps assess their stability and income source. This information offers insights into their ability to meet their financial obligations.
• Income verification: A rental application should include a section where applicants can provide proof of income, such as recent pay stubs, employment contracts, or tax documents. Verifying income ensures that tenants have the financial means to pay rent consistently.
• References: Applicants should be asked to provide references from previous landlords or professional contacts who can vouch for their character and reliability. Contacting references offers valuable insights into the applicant’s rental history, payment habits, and general conduct as a tenant.
• Rental history: It is important to gather information about the applicant’s previous rental history, including addresses of previous residences, dates of tenancy, and reasons for moving. This allows landlords to assess their rental track record and helps landlords understand where their tenant has lived and in what types of properties.
• Consent for credit and background checks:Including a section where applicants grant consent for credit and background checks is crucial. This authorization enables landlords to request personal information on the tenant from the right legal entities.
• Additional information: Depending on specific preferences or property requirements, the application may include additional sections, such as questions about pets and vehicle information, or ask any specific questions that might help in determining their eligibility.

3. Run a Credit Report & Background Check

Once you’ve obtained a completed rental application, you can run a credit and background check on the tenant. A credit report serves as a valuable resource for landlords by providing essential information that helps assess the financial responsibility and reliability of prospective tenants. This detailed evaluation allows landlords to gauge an applicant’s ability to meet financial obligations, including paying rent on time.

A background check is a valuable tool that landlords can utilize to gain insights into a prospective tenant’s history. By conducting a background check, landlords can uncover crucial information to help you make informed decisions during the tenant screening process.

Key information that will be found on a prospective tenant’s credit report and background check are:

• Credit score: The credit score provides an overall snapshot of their creditworthiness. A higher score typically indicates a more responsible approach to managing financial obligations. Most landlords like to see a score of 700 or above.
• Payment history: In the applicant’s payment history, landlords can look for patterns of late payments, delinquencies, or accounts in collections. Consistent on-time payments demonstrate a tenant’s financial responsibility.
• Debt-to-income ratio: The debt-to-income ratio indicates their level of financial obligations compared to their income. A lower ratio suggests a better ability to manage additional rental expenses.
• Outstanding debts: Look for any outstanding debts or judgments against the applicant, as these may affect their ability to pay rent consistently.
• Criminal records: Check for any criminal records or convictions. While minor offenses may not be immediate grounds for rejection, serious offenses should be carefully evaluated.

4. Verify Income & Employment

Verifying income and employment helps landlords select tenants with the financial stability to fulfill their rental payments. Landlords should have a general guideline for income requirements needed from tenants. A common guideline often followed by landlords is the “three times the monthly rent” rule.

This means that applicants are typically expected to have a monthly income that is at least three times the amount of the monthly rent. For example, if the monthly rent is $1,500, applicants would generally be expected to have a minimum monthly income of $4,500.

However, you can choose to increase or decrease this multiple. For example, in New York City, tenants are required to make 40 times the rent to qualify for an apartment. So, if you want to rent a $2,000 apartment, you must make $80,000 per year.

Some landlords may have higher or lower income requirements based on their specific circumstances and preferences. Landlords can verify income and employment by contacting employers, requesting pay stubs, and employment contracts, or using professional verification services like RentPrep. Check out our RentPrep review if you’re interested in learning more about this tool.

5. Check Previous Addresses, Landlord & Eviction History

In addition to verifying income, when learning how to screen tenants for rental property, it’s essential for landlords to verify an applicant’s previous addresses and landlord and eviction history. Thoroughly vetting application information increases confidence that the applicant meets your rental qualifications and will be a good tenant.

By asking for references and rental history information on the tenant application, landlords can uncover information about a prospective tenant’s previous addresses, eviction history, and former landlord relationship status. Details you want to discuss with a tenant’s former landlord are payment history, adherence to lease terms, property maintenance, behavior as a tenant, and any issues or disputes during the tenancy.

When contacting a tenant’s former landlord, consider asking the following questions:

• Can you confirm the applicant’s tenancy at your property?
• How long did the applicant reside at your property?
• Did the applicant consistently pay rent on time? Were there any instances of late payments?
• How would you describe the applicant’s communication and cooperation during their tenancy?
• Did the applicant maintain the property in good condition?
• Were there any reported issues or complaints from neighbors or other tenants related to the applicant?
• Did the applicant provide proper notice when planning to move out?
• Were there any lease violations, disputes, or conflicts during their tenancy?
• Would you consider renting to this applicant again in the future?

Landlords can offer tenants an easy way of paying their monthly rent online to guarantee on-time payments with Baselane. Tenants can easily submit rent payments online, eliminating the need for paper checks or in-person transactions. This streamlined approach not only saves time but also ensures timely and consistent rent collection. Additionally, Baselane provides landlords with financial management tools to allow them to track income, expenses, and quickly generate detailed financial reports.

6. Interview Applicants & Ask Screening Questions

Once you’ve reviewed all application information and you’ve determined that you would like to proceed with a prospective tenant, then conducting face-to-face or virtual interviews with applicants may help you finalize your decision.

Landlords should prepare a list of questions when screening potential renters. These questions should be tailored to your specific requirements, covering rental preferences, lifestyle, and ability to meet rental obligations. Observe their communication skills, professionalism, and general demeanor during the interview to gauge compatibility.

Here are some suggestions for what landlords can do during the interview process and sample questions they can ask to assess if the tenant will be a good fit:

Example Questions You Can Ask	Example Questions You CANNOT Ask
Do you have any pets?	Do you have any medical conditions?
Are you willing to comply with the property’s rules and regulations?	What is your sexual orientation?
Can you pay the lease application fee?	Do you have any plans to start a family?
Have you ever broken a rental agreement?	Are you married or single?
Are you able to meet the monthly rent obligations?	Do you have a

7. Accept or Reject the Applicants After Screening

After carefully evaluating each applicant’s qualifications and determining whether they align with your renter criteria, landlords must decide whether to accept or reject their tenant’s application. Landlords should base their decision on a tenant’s creditworthiness, rental history, income stability, and overall compatibility to make an informed decision. Communicate your decision promptly and in compliance with applicable laws and regulations.

To help with the evaluation process, landlords should develop a clear set of screening criteria to objectively evaluate potential tenants. This is especially helpful when you have multiple applications, and you need to pick the applicant best fit for your property. Some screening criteria to help you with accepting the right tenant:

• Sufficient income: The applicant should have income that meets or exceeds the requirement of three times the monthly rent.
• Stable employment: A stable work history shows a continuous duration of time in their current job. This indicates reliability and a higher likelihood of consistent income.
• Verifiable income: Verify the applicant’s income through their current employer documents or tax returns. This helps confirm their financial stability and ability to meet rental obligations.
• Satisfactory credit: Assess the applicant’s credit history to make sure they have a strong credit profile. This indicates responsible financial behavior and increases the likelihood of timely rent payments.
• Clean criminal background: Check for a criminal background free of felonies or misdemeanors to prioritize tenant safety and security.
• Positive rental history: Evaluate the applicant’s previous residence and landlord history for a favorable track record of fulfilling lease obligations and maintaining their past properties.

After you determine whether the prospective tenant meets your criteria, you will be able to either accept or reject their application.

Tools to Assist With Screening Tenants

Landlords can leverage advanced software to screen prospective tenants. These tools offer a variety of features like automated rental applications, online background checks, and credit assessments. By using tools throughout the tenant screening process, landlords can save time, reduce manual paperwork, and make data-driven decisions. This ultimately helps with selecting the most qualified and reliable tenants for your rental properties.

Bottom Line

By taking the time to learn how to screen tenants in your property will reduce the headache of having to evict a bad tenant in the long run. Landlords should implement a thorough tenant screening process to minimize potential tenant scams, secure responsible tenants, and foster a positive landlord-tenant relationship. Leveraging technology and software tools can streamline the screening process and provide valuable insights into prospective tenants.

Several individuals want to get involved in real estate investing but are reluctant to take the leap. These people are ready to leave their nine-to-five job to pursue a life of financial freedom. Still, they are unaware of the sources to finance a real estate business. Many assume if they don’t have capital of their own, it is impossible to get started. However, this rationale is false.

There are a variety of ways to finance a real estate business without using your own money. Not only are there real estate development loans, but there are plenty of private lenders out there willing to take a risk on your business. If you desperately desire to leave your day job so that you can prosper as an entrepreneur, consider property development loans.

What Are Real Estate Development Loans?

Real estate development loans are capital advancements issued to borrowers who need funds to break ground on a project, build, and hold the finished product through the leasing stage. Investors typically rely on real estate development financing to do one of two things: buy raw land to eventually build on or tear down an existing building, only to build a new one.

4 Types Of Real Estate Development Loans

The most popular types of real estate development loans include, but are not limited to:

1. Acquisition Loans
2. Development Loans
3. Acquisition And Development Loans
4. Construction Loans

Acquisition Loans

As their names suggest, acquisition loans are specifically used to finance the purchase of undeveloped land. Acquisition loans will often be used to buy land with no intentions of developing on it. While common, acquisition loans provide little room for action and must typically be accompanied by subsequent loans to develop the land further. Of the real estate development loans made available to investors, this offers the least amount of freedom.

Development Loans

If borrowers want to develop the land they recently acquired, they may need a loan to move forward with any plans. Development loans are traditionally borrowed to do just that. Borrowers will take out development loans to make improvements on the land. Leveling, building roads, and running water lines may all be accomplished by taking out a development loan. On top of that, development loans are necessary to turn raw land into a building site.

Acquisition And Development Loans

Sometimes borrowers want to both acquire raw land and develop it at the same time. Fortunately, there’s a loan for that: acquisition and development loans. As their names suggest, these loans enable borrowers to buy raw land and turn it into a building site. OF the real estate development loans made available, this one is the most versatile.

Construction Loans

Construction loans — not surprisingly — are used to finance the building or renovation of a respective real estate project. According to Links Financial, “it differs from other loans in that the developer receives the money in monthly draws as development progresses rather than in one lump sum at the beginning of the project. Monthly loan payments increase as you draw out more money.”

What Is The Capital Stack?

The capital stack is the various layers of financing used to make up a project. In the real estate industry, it’s common, if not expected, to rely on more than one source of funding when acquiring a deal. Each loan makes up the resulting capital stack, with high priority funding sources on top and more senior debt on the bottom. In financing, the capital stack is made up of senior debt, mezzanine debt, preferred equity, and common equity. 

The bottom of the capital stack, or senior debt, is typically the highest priority but lowest risk debt. These are typically loans that are secured by the property. At the top, is common equity which is considered the lowest priority or highest risk debt. These loans are only repaid when the rest of the capital stack has been repaid. Essentially, this concept is used to prioritize the different financing methods that go into a real estate deal. 

11 Real Estate Funding Sources

There are several sources to finance a real estate business, but the most popular of them all are listed below:

1. Traditional Loans: Traditional loans are those you would receive from a bank or an institutionalized lender. Their interest rates are relatively low in an attempt to remain competitive. However, their lengths are typically long, and their underwriting is extensive. Most traditional loans last anywhere from 15 years to 30 or more and come with an interest rate somewhere in the neighborhood of four percent.
2. Private Lenders: Private lenders can be anyone with access to capital and a willingness to invest it. In other words, private lenders can be anyone from a close friend to someone you met at a networking event. As their names suggest, private lenders are not institutionalized or licensed to lend money but rather do so to make their money back with interest. Private lender terms are typically easier to meet, and the duration in which they are willing to lend will be much shorter, but at the cost of an interest rate around 12 to 15 percent.
3. Venture Capitalists: Venture capitalists are high-net-worth individuals or corporations who tend to invest in startups that have shown potential. Venture capitalists are often willing to lend far more than a traditional small-business loan, but their selective nature can be harder to receive approval.
4. Angel investors: Angel investors are usually well-off individuals who provide funding for new business ventures, typically in exchange for convertible debt or ownership equity. Angel investors have developed a reputation for taking more risk, but it’s important to note the money from an angel investor isn’t technically a loan. The money represents the acquisition of part of the business.
5. Small business administration loans: Small business administration loans are issued by the government in a variety of packages. Small business loans offer many options, but they can be tedious to apply for and are not quick to receive.
6. Real estate crowdfunding: Real estate crowdfunding is a process that involves pooling together funds from multiple sources and people. Crowdsourcing can offer recipients flexible terms and is growing in popularity.
7. Microloans: Microloans offer small business owners to $50,000, though most people tend to take much less than that. Due to their size, small business loans are typically easier to obtain than a traditional loan, but there’s a chance the loan doesn’t cover all of your needs.
8. Hard money lenders: Hard money lenders are not institutionalized, but they may be licensed to lend money. Their loan terms are typically short and leveraged with the asset in question. Hard money loans come with a high interest rate, often around 12 percent, but they can give borrowers access to capital fast.
9. Home equity loans and lines of credit: Home equity loans and lines of credit, or HELOCs as they are known, represent a type of revolving credit—not unlike a credit card. Home equity loans, however, use the equity in your home as collateral.
10. Money partners: Money partners are just that: individuals who you may partner up with because of their access to funding. If you don’t have access to capital, it may be in your best interest to partner with someone who does; they would be known as a money partner.
11. Commercial loans: Commercial loans allow investors to purchase commercial properties. Not unlike traditional loans, commercial loans carry long durations. To minimize the risk of default, commercial loans tend to offer low interest rates. As a result, it may be harder to receive approval for a commercial loan.

Getting started in real estate investing is not as hard as you may think. If you’ve chosen your focus – i.e., single-family homes, apartments, commercial real estate, etc. – and your preferred exit strategy – i.e., flipping, buy and hold, or wholesaling – all that is left is finding the capital to fund your first deal.  The importance of understanding real estate financing should not be overlooked because financing is what can help you turn your strategies into realities. Several lending sources are made available to those who are willing to put in the work, which is why “I don’t know how to finance a real estate business” is no longer an excuse to avoid investing.

Alternatives For Small Business

Small businesses looking for financing methods have more than a few options to choose from. If you own a growing company and need to keep reinvesting returns, check out the following alternatives: 

• Private Placement: A private placement is essentially a real estate syndication, but the business would take the role of project sponsor. In this arrangement, an unregistered securities offering is made directly to investors. The goal is to bring more equity to the current project.
• Build-to-Suit: Build-to-suit is exactly what it sounds like. A commercial project is designed and built for the end user, it is then managed by an investor who manages the financing. In return, the operating business agrees to sign a long-term lease. While the business does not officially own the property in a build-to-suit arrangement, they do get long-term access to a custom build space.
• Sale-Leaseback: A third option to consider is a sale-leaseback. In this arrangement, a property is sold to an investor and the business leases it back. Similar to a build-to-suit arrangement, the business will not own the property in the end. However, the money earned from the sale can then be funneled into a new development project.

6 Tips For Getting Property Development Loans

Acquiring money for property development may prove difficult for first-timers. Because the crash rate for property development is high, only experienced developers obtain loans easily. Follow these suggestions to help you overcome to difficulties of gaining real estate development loans:

1. Acquire Credibility: You should try to gain the experience needed to be trusted with a real estate development loan. This can be done by working for an established property developer, and in turn, they can give you this credibility.
2. Find A Partner: Partners can be useful if you already have some of the funds to begin with. If you find a developer to partner with, they will be able to co-finance with you.
3. Develop An Attractive Plan: Acquiring property development financing can be gained easier by creating an attractive project plan. Developers who are just starting usually look into small residential projects consisting of one or two homes. Property development loans can take up to months to obtain. In some cases, the property you want may be off the market by the time you receive a loan. Try to identify several different properties you may be interested in. Zoning limitations, access easements, utility easements, and other special conditions are all things you should research when developing a plan.
4. Do Your Research: Potential lenders will be more likely to offer you a real estate development loan when you provide an extensive amount of information about your project. Research the local property market to establish accurate sales prices and prepare any building cost estimates, including materials, labor, overhead, and profit.
5. Practice Your Pitch: Finally after all your planning is complete, begin rehearsing your pitch. Take all the information you’ve gathered and express it confidently, concisely, and convincingly. Be prepared to answer any questions about costs and the property itself. The more information you can provide them on the spot, the more your lenders will be willing to give you a property development loan.
6. Keep Costs Low: When it comes to property development loans, you want to keep all costs for the project low. The lower your costs, the higher your profits. If you can keep your development costs low, you benefit both yourself and any potential equity investors. You will also want to keep costs low if you are getting a property development loan from a bank. It is proven easier to secure funding for lower costs projects. When banks provide debt, they reference two numbers: the percentage of your total projected cost and the percentage of total projected value once the project is completed. As the repayment of this debt is very difficult during the development process, you will want to keep initial costs low. If anything goes wrong, banks will be unforgiving.

Best Real Estate Development Loans

When looking for the right real estate funding sources, it is important to weigh the costs, qualification requirements, speed of approval, and more. Aspiring investors should be careful to examine any variables involved in receiving real estate development loans to ensure they choose the best financing option for the situation at hand. The following list of real estate development loans is a great place to start:

• US Bank: Loans provided through US Bank are a great option as they can allow investors to borrow up to 80 percent of the property value. Their loans can come with variable or fixed interest rates, and repayment terms can be up to 25 years.
• Wells Fargo: Wells Fargo is one of the biggest real estate funding sources in the country. Investors may find they can be granted funds as quickly as four to six weeks when working with Wells Fargo. Additionally, they are less focused on borrowers’ credit when compared to other financing sources.
• JP Morgan Chase: JP Morgan Chase provides real estate loans to several real estate investors each year, focusing on property types ranging from multi-family to mixed-use. One of the biggest benefits of working with this loan provider is the streamlined application and qualification process.
• Liberty SBF: This lender is a great option for investors looking to borrow up to 90 percent of the property value. Their flexible loans will typically be made up of three portions, coming from a mix of traditional lenders, development companies, and your own down payment.
• SmartBiz: SmartBiz works to match investors and loan providers based on the borrowers specific needs. Their loans are most attractive for investors seeking financing quickly, though the qualifications can be higher when compared to other loan providers.

4 Stages Of Real Estate Development

There are 4 stages of real estate development when looking at a standard development process. The first stage is choosing the right site and purchasing the land that you will be using for your development. The next step is to start planning your development as well as securing the permits and licenses required to build on the land. The third step is to start the development and construction of the project. The final step is to finish construction and start operating the development as you had planned. 

Funding For Real Estate Investing: Which Will You Choose?

To find financing for real estate development, you must start by reviewing your strengths.  The above options are almost always available, but you must understand what you’re getting yourself into before pursuing a particular strategy.

Regardless of what financing option or development loan you go after, all lenders will want to hear certain things. Be straightforward as you lay down the numbers and tell them what they can expect. Lenders will want to know your timeline, your expected profit, the loan amount required, when they can expect to see a return, and how involved you want them to be.

While it is important to appear confident in any meeting with a potential lender, it is most important to be transparent and gracious. Remember, the lender is helping you. Of course, they will benefit so long as the deal pans out the way you hope it to, but they are still taking a risk. Be ready to share your portfolio and answer any question a lender throws your way.

Summary

Financing a real estate deal is a very involved process. In fact, there are several real estate development loans designed to help buyers in every situation. If, for nothing else, everyone’s needs are different, and the loan options made available to borrowers suggest as much. As a result, borrowers need to shop around and confirm they are borrowing the right loan.

Business grants for your minority-owned business will get you access to free financing.

Minority business owners face challenges when starting or expanding a small business, including access to affordable small-business loans. Business grants and financial assistance can help bridge the funding gap.

Here are some of the best small-business grants and other useful financing resources for minority-owned businesses. NerdWallet also has compiled a list of the best small-business loans for minorities.

1. Grants.gov

Grants.gov allows grant seekers to find and apply for federal funding opportunities. It contains information on more than 1,000 grant programs across federal grant-making agencies, including the Department of Commerce and the U.S. Small Business Administration.

To apply for federal grants, you must obtain a DUNS number from Dun & Bradstreet (a unique nine-digit identification number) for your business; register to do business with the U.S. government through its System Award Management website; and create an account at Grants.gov.

2. The USDA Rural Business Development Grant Program

This is a USDA grant for the development or expansion of small businesses in rural areas — minority-owned or not. To qualify, you’ll need to have 50 or fewer new employees, less than $1 million in gross revenue and be located in an eligible rural area.

Grants can be used for a variety of purposes, including training and technical assistance, acquisition or development of land and long-term business planning. Applications are accepted through the USDA’s Rural Development’s state offices once per year.

3. National Association for the Self-Employed

This nonprofit trade association provides educational resources and grants for small businesses and entrepreneurs. To apply for a grant of up to $4,000, you’ll need to become an active member of the association, provide a detailed explanation of how you’ll use the funds, show how the grant will support your business growth, and provide supporting documentation.

4. FedEx Small Business Grant Contest

The FedEx Small Business annual grant contest awards 12 small businesses with grants of up to $50,000. Any for-profit small business with a shipping need is eligible to enter, provided it has been operating for at least six months and has fewer than 99 employees when the annual contest starts.

5. Small Business Innovation Research and Small Business Technology Transfer Programs

These two small business programs provide contracts and grants for early-stage small businesses that are looking to commercialize innovative research and development.

6. Minority Business Development Agency

This development agency of the U.S. Department of Commerce promotes the growth of minority-run small businesses by connecting owners to financing resources, federal contracts and market opportunities. You can contact a local MBDA business center for more information.

7. National Minority Supplier Development Council

The council is a corporate member organization focused on increasing business opportunities for certified minority-owned businesses. It operates the Business Consortium Fund, a nonprofit business development program, which offers financing programs and business advisory services for its members.

8. SBA 8(a) Business Development Program

Socially or economically disadvantaged small-business owners are eligible to receive help through this SBA 8(a) program, which provides business development assistance, training, and management and technical guidance.

To qualify, a small business must be at least 51% owned and controlled by a citizen who has been subjected to cultural bias or prejudice and placed at an economic disadvantage because of race or ethnicity. Here is a list of eligibility requirements.

9. Operation Hope Small-Business Empowerment Program

The Operation Hope program is designed for aspiring entrepreneurs in low-wealth neighborhoods, which often include minority communities. The program combines business training and financial counseling along with access to small-business financing options. Participants complete a training program, plus workshops on business financing and credit and money management.

10. Fast Break for Small Business

This $6 million grant program is a partnership among LegalZoom, the NBA, WBNA, and NBA G League. Businesses can receive grant money and LegalZoom services. Accion Opportunity Fund is the nonprofit administrator of the program.

https://www.nerdwallet.com/article/small-business/small-business-grants-minorities?utm_medium=marketing-email&utm_source=sent_09-28-22_ALL_FunderaNewsletter_small-business-grants-minorities&utm_campaign=other&utm_content=version-A_type-button