Are you a real estate investor looking for a quick and flexible source of project funding? If so, you may want to consider hard money lending.  

Hard money loans are short-term, asset-based loans. They are often used for real estate investments. Unlike traditional bank loans, private investors or companies typically fund hard money loans. The value of the property secures them.  

This article will explore everything you need to know about hard money lending. Understanding hard money lending can help you make informed decisions regarding project funding. 

What is Hard Money Lending? 

As mentioned, hard money lending is a short-term, asset-based loan used primarily for real estate investments. They are secured by the value of the property rather than the borrower’s creditworthiness.  

This means that borrowers with poor credit or low income may still be eligible for hard money loans as long as they have sufficient equity in the property.  

Hard money loans typically have higher interest rates than traditional bank loans and shorter repayment terms. Terms usually range from 6 to 18 months. This is because hard money loans are considered to be higher risk. Lenders require a higher return on their investment to compensate for the risk.  

How Does Hard Money Lending Work? 

The loan amount is typically determined by the loan-to-value (LTV) ratio, the percentage of the property’s value that the lender is willing to lend. LTV ratios for hard money loans are usually between 50% and 70%. This means that borrowers will need to have equity in the property to qualify for a loan. 

Hard money loans also have higher interest rates than traditional bank loans, typically 7% to 12% or higher. 

The borrower will also need to provide a down payment on the property, typically ranging from 20% to 30% of the purchase price. Once the loan is approved and the funds are disbursed, the borrower can use them to purchase the property or finance their real estate project. 

How to Find Hard Money Lenders 

If you’re interested in using hard money lending, the first step is to find a reputable hard money lender. One way to find a lender is through networking within the real estate industry. This includes attending real estate investment clubs or conferences.  

You can also search online for hard money lenders in your area and read reviews and testimonials from other borrowers.  

When considering a hard money lender, ask about their lending criteria, including interest rates, fees, and repayment terms. You should also ask about their experience in the industry and how quickly they can fund a loan.  

Additionally, it’s essential to do your due diligence and research the lender’s reputation and track record. Look for lenders who are transparent about their lending practices and are willing to answer your questions.  


Hard money lending can be a valuable source of project funding for real estate investors.  

By understanding how hard money lending works, its benefits and risks, and how to find a reputable lender, you can make informed decisions about financing your real estate projects.