Hard Money Lending May Be The Right Choice For Your Real Estate Investment

When it comes to securing funding for your real estate investment, it is vital to understand your option of hard money lending. Typically funded by private investors and companies rather than banks, hard money loans are used for real estate ventures and as bridge loans. For people or businesses that do not have strong credit or established credit, hard money loans may be the best option to get their project off of the ground.

Credit Score Concerns

If your credit score is less than what a bank requires to meet adequate rates in lending, hard money lenders can be the right choice for your needs. Private lenders have a different set of qualifications that they look at when lending money, primarily focusing on the project for which you are asking to be funded.

In some cases, hard money loans could be beneficial even if your credit score is good. These types of loans are generally processed faster than traditional mortgages, giving you the money you need in the time frame necessary to make your project happen. Traditional loans entail lengthy processes that require extensive work to be completed prior to funding being received. If you want to purchase fix and flip properties, for example, you may need to have money on hand to act quickly without waiting weeks on end for banks to work their processes.

Designed For Timilness

Hard money lenders provide loans based on collateral, not extensive credit checks. Collateral-backed loans allow the lender the confidence to invest quickly. In some cases, lenders can issue distressed loans that are unsecured with collateral, making the option of hard money loans desirable for many uses.


A repayment of under five years is typical for the majority of hard money loans, however, like all financing, options may be different for various projects. These short term loans are practical in that the interest rate is buffered by the length of time of the loan. Interest rates for hard money loans may seem higher than, but are relative to the length of time of the loan.

Funding For Your Project

Hard money lenders look at the details of your proposed real estate purchase to determine their interest in funding the project, rather than focusing on your credit rating. It is important to remember that the collateral is an integral part of the lender’s decision and to look closely at your intentions for the investment. If you would like to learn more about how hard money lending works and how it can fund your real estate investments, contact Locklin Capital today.