Answering Your Questions about Hard Money Business Loans

Welcome to our blog, borrowers. So, you’re considering a hard money loan for your real estate matters? Then you’ve probably got a bunch of questions, and that is okay because money matters shouldn’t be dealt with half knowledge.

Hard money loans can seem a bit mysterious at first glance, but don’t worry – we are here to shed some light on everything (almost) and answer some of the most common queries we receive from borrowers all the time.

Frequently Asked Questions about Hard Money Loans.

As a lender company, we know that loans are confusing for anyone who doesn’t have know-how about it.

So, let’s get started on the most common yet confusing questions.

What Exactly is a Hard Money Commercial Loan?

According to Google: ‘A hard money loan is a type of short-term financing typically used in real estate transactions.’ It is nothing like traditional loans, funded by banks or credit unions, hard money loans come from private investors or lending companies (like ours!). The security for these loans is the property value –and not the borrower’s credit score.

How Do These Loans Work?

So, when you apply for a hard money loan, the lender evaluates the value of the property you’re using the loan for or against. If the property is according to the lender’s standards, they will approve it on the basis of the increased value of the property, which is also called ‘loan to value ratio.’ Once approved, you’ll receive your funds, usually within a matter of weeks, and you’ll repay it until it’s paid off or refinanced.

Where Can I Use a Hard Money Loan?

These loans are used in real estate investing, usually for fix-and-flip projects or renovations. But they can also be used to purchase properties, bridge financing, or cover short-term cash flow needs (for small businesses). Basically, if you’re looking for quick financing with flexible repayments, a hard money loan is perfect for you.

What Are the Pros and Cons of Hard Money Loans?


Hard money loans offer quick approval and funding, making them ideal for time-sensitive deals. The hard money lending rates are also flexible compared to bank loans, and the best part is that they are lent on the basis of property value.


These loans come with high-interest rates compared to traditional financing. Plus, they’re short-term loans (ranging from six months to a few years), so you’ll need a solid strategy to repay the loan on time.

Do I Qualify for It?

While qualifying for hard money loan vary from lender to lender, we will look at the property’s value, your experience as a borrower, and your ability to repay the loan. We will also ask you about how you will use this loan and your expectations with the outcome.

Are Hard Money Loans Risky?

Like any type of financing, hard money loans come with their own set of risks and rewards. There is nothing in this world that doesn’t have its cons or risks; you just need to choose your risks and weigh the pros. Hard money loans offer quick funding and flexible terms. That is why you should consider borrowing it.

Hopefully, now you can safely say that you know everything about hard money loans, and when someone tells you something wrong about it, you can correct it on the spot.

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