How is private (hard money) lending different from a bank loan?

We are asset-based, which means we underwrite the property, its equity, and your business plan rather than your personal income and tax returns. That lets us fund in days instead of the 30 to 60+ days a bank takes, on short interest-only terms built around a flip, refinance, or sale. You pay a higher rate than a bank in exchange for speed, flexibility, and certainty on deals a bank cannot fund in time.

How fast can you close?

Fix and flip and residential bridge loans typically close in 5 to 7 days once we have your basics. Rental (DSCR) loans usually take 2 to 3 weeks because of the appraisal and rent verification, and SBA financing runs 30 to 90 days. The biggest variable is how quickly title, insurance, and your documents come together.

Do you check credit, and is there a minimum score?

We do run credit, but on our asset-based loans it carries far less weight than at a bank, and weaker credit can often be offset with a larger down payment or lower leverage. There is no personal income test on these programs. Credit matters most on long-term rental loans, where we look for a 640 minimum and it affects your rate and leverage.

Do I need to provide income documents or tax returns?

Generally no. Our bridge, fix and flip, and construction loans qualify off the property and your equity, and our DSCR rental loans qualify off the property's rent, so we do not ask for W-2s or pay stubs. We will want to see bank statements or proof of reserves. SBA and conventional investment loans are the exceptions and are fully documented.

What do you need to give me a quote?

Just the basics of the deal: the property address or type, the purchase price or current value, your rehab budget, the loan amount, and your exit plan. We can often pre-qualify you over the phone or through a short application and issue a proof-of-funds letter before you are even under contract.

What is a point, and how do your rates compare to a bank?

A point is an upfront fee equal to 1% of the loan amount, and origination on private loans typically runs 1 to 3 points. Our rates are higher than a bank, generally in the high single digits to low teens depending on the program, because the loans are short, fast, and flexible. When you compare offers, weigh the rate and the points together as your true cost of capital.

Compare

Bank Statement Loan vs DSCR Loan

Your deposits carry the file, or the property's rent does.

Both loans exist for the same investor: someone whose tax returns understate what they actually make. The difference is which cash flow gets underwritten. A bank statement loan qualifies you on 12 to 24 months of deposits, so your business carries the file. A DSCR loan qualifies on the property's rent against its payment, so your business never enters underwriting at all. When the property cash flows on its own, DSCR is the cleaner path; when it does not but you do, the deposit history is what carries the deal.

Bank Statement Loan

Deposits carry the file

DSCR Loan

Property carries the file

Qualifies on

12 to 24 months of deposits

Property rent vs. payment

Income docs

Bank statements or none

No tax returns or income docs

Fails when

Thin or erratic deposits

Rent misses the payment

Stated leverage

From 20% down

Up to 80% LTV

Term

Short-term or 30-yr

30-yr fixed / 5-7-10 ARM

Credit

From 640

Bottom line

Take the DSCR loan when the property covers its own payment and you want your business to stay out of the file entirely. Take the bank statement path when the property is not the strongest part of the deal but your deposit history is. Both are business-purpose investor loans, and USA Mortgage underwrites either on the same credit floor.

Rates and terms shown are typical figures, subject to underwriting and market conditions. Not a commitment to lend.

Common questions

Can I use a bank statement loan and a DSCR loan on the same deal?

Why doesn't a DSCR loan look at my income at all?

Do I need two years of tax returns for a bank statement loan?

Related comparisons

DSCR Loan vs Hard Money LoanLong-term rental financing versus short-term project capital.DSCR Loan vs Conventional LoanQualify on the property, or on your personal income.Bridge Loan vs DSCR LoanShort-term capital to reposition, then long-term money to hold.

Still not sure which fits?

Tell us about your deal and we'll point you to the right structure. No obligation.

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