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

Bridge Loan vs DSCR Loan

Short-term capital to reposition, then long-term money to hold.

These are usually two steps in the same plan, not an either-or choice. A bridge loan is short-term, interest-only capital to acquire and reposition a property, through renovation, lease-up, or a partner buyout, before it can qualify for permanent financing. A DSCR loan is the long-term takeout once the property is stabilized and renting, qualified on its cash flow.

Bridge Loan

Reposition and stabilize

DSCR Loan

Long-term rental hold

Loan purpose

Reposition before permanent financing

Hold a stabilized rental

Typical term

Short-term, up to 24 to 36 months

30-year amortization

Qualifies on

The asset and the business plan

Property rent vs. payment

Payment type

Usually interest-only

Principal and interest

Rate

Higher, short-term risk

Lower, long-term and stabilized

Best for

Value-add, lease-up, cash-out

Stabilized, rented properties

Bottom line

Use a bridge loan to buy and stabilize a property that cannot qualify for permanent financing yet, then refinance into a DSCR loan once it is rented and cash-flowing. Bridge to reposition, DSCR to hold.

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

Common questions

When should I use a bridge loan instead of a DSCR loan?

Use a bridge loan when the property is not stabilized yet, mid-renovation, being leased up, or awaiting a partner buyout, so it cannot pass DSCR underwriting. Once it is finished and renting, refinance into a DSCR loan for the long-term rate.

Can I roll a bridge loan into a DSCR loan?

Yes, that is the standard exit. The bridge loan carries the property through repositioning, and the DSCR refinance pays it off once the rent covers the long-term payment, often returning equity in the process.

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.

Still not sure which fits?

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

Apply now Talk to us