Hard Lenders in a Recession
You may have noticed if you search the internet these days that hard money lenders are very sought after indeed. This is in part because of how the worldwide recession (or maybe it should properly be called a depression) has affected the banking and lending industries. As you have probably heard it is not very easy to get a loan these days because there is so much uncertainty that banks are afraid to lend. And governments have done a lot to cause that uncertainty. There is what Robert Higgs describes as “regime uncertainty” which is what happens when people in the market are afraid to act because they do not know what draconian measures the government will impose on the market next. And so investors do nothing. That is why hard money lenders can still thrive though because they can charge higher rates of interest that help compensate for the uncertainty.