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

Hard Money vs Private Money

Same asset-based idea, different source and flexibility.

The terms overlap and are often used interchangeably. Both are asset-based loans secured by the property rather than your personal income, and both are faster and more flexible than a bank. The practical difference is the source: hard money typically comes from a lending company with structured programs, while private money comes from an individual or a fund and can be more negotiable, deal by deal.

Hard Money

Structured lender programs

Private Money

Individual or fund capital

Source of capital

Lending company / fund

Individual lender or fund

Underwriting

Defined programs and criteria

Often case-by-case

Flexibility

Consistent, repeatable terms

More negotiable per deal

Secured by

The property (asset-based)

Speed

Fast, process-driven

Fast, relationship-driven

Best for

Predictable, repeat borrowing

Unusual deals needing flexibility

Bottom line

If you want consistent, repeatable terms you can plan around, a hard money program is ideal. If your deal is unusual and needs a custom structure, private money's flexibility can be the difference. On our bridge and fix and flip programs, USA Mortgage does both as a direct lender, our own capital, our own decisions.

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

Common questions

Are hard money and private money the same thing?

Close, and the terms are often used interchangeably. Both are asset-based and faster than a bank. The distinction people draw is the source: hard money from a structured lending company, private money from an individual or fund with more case-by-case flexibility.

Which costs less?

It varies by lender and deal, not by the label. A direct lender using its own capital can often price better than a broker on either, because there is no middle layer taking a cut.

Related comparisons

DSCR Loan vs Hard Money LoanLong-term rental financing versus short-term project capital.Hard Money vs Conventional LoanSpeed and flexibility versus the lowest-cost long-term money.

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