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What is a Hard Money Lender?

what is a hard money lenderAs an entrepreneur, you’ll probably need funding to get your business up and running. While there are many funding options from which to choose, some entrepreneurs prefer hard money loans. So, what is a hard money lender and how do hard money loans work?

What is a Hard Money Lender?

A hard money lender issues asset-based loans called “hard money loans”, in which a borrower receives funding through secured real property.

Most traditional loans are not asset-based. To determine an applicant’s candidacy for a loan, these traditional lenders look at things such as credit score, income, employment, etc. If an applicant fails to meet the necessary criteria, the lender will reject his or her application for a loan. Hard money loans differ, however, in the sense that candidacy is based on the applicant’s assets instead of traditional factors like those previously mentioned.

Hard money loans use collateral to secure then funding. This gives the lender peace of mind knowing that if the borrower cannot repay the loan, they can offset the lost revenue through repossession of the borrower’s property.

The Pros and Cons of Hand Money Loans

There are both pros and cons associated with seeking funding from a hard money lender. Since this type of loan is based on assets, you don’t have to worry about having bad or no credit. Furthermore, you don’t need a proven history of income to secure a hard money loan. As long you have the property to put up as collateral, you should get approved for a hard money loan with relative ease.

It’s also worth noting that getting approved for a hard money loan typically takes less time than getting approved for a traditional loan. If you’re like most entrepreneurs, you probably need money fast, in which case a hard money loan can prove to be a viable funding option.

With that said, you need adequate collateral to secure a hard money loan from a lender. If you don’t have enough property with “value,” you may have trouble getting approved. Additionally, hard money loans are typically short-term loans lasting no more than five years.

This article brought to you by Intrepid Private Capital Group – A Global Financial Services Company. For more information on startup and business funding, please visit our website.

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Intrepid Private Capital Group • March 23, 2017


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