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.

Construction · 4 min read

New Construction Loan vs Renovation Loan: What's the Difference?

The short answer

Construction loan vs renovation loan: one funds a ground-up build, the other improves an existing structure. How they differ and which fits your project.

A ground-up construction loan funds building a brand-new structure from the dirt up. A renovation loan (the rehab portion of a fix and flip or bridge loan) funds improving a property that already exists. Both release money in draws, but they are sized and underwritten differently.

Ground-up construction

Funds land plus vertical construction of a new building.
Sized on loan-to-cost (LTC), because there is no existing value yet.
Draws follow build milestones from foundation to finish.
Fits spec builders and developers.

Renovation / rehab

Funds improvements to a standing structure (the rehab budget on a flip).
Often paired with purchase leverage and capped against ARV.
Draws follow the scope of work.
Fits flippers and value-add investors.

Which do you need?

Building new on a lot or after a teardown? Construction loan. Buying a property to renovate and sell or hold? A fix and flip loan with rehab funding. The deciding factor is whether you are creating a structure or improving one.

Frequently asked

What is the difference between a construction loan and a renovation loan?

A construction loan funds building a new structure from the ground up and is sized on loan-to-cost. A renovation loan funds improving an existing property and is usually paired with purchase leverage and capped against ARV.

Do both use draws?

Yes. Both release funds in stages as work is completed and inspected, but construction follows build milestones while renovation follows the scope of work.

Which loan is for a teardown and rebuild?

A ground-up construction loan, since you are creating a new structure. Improving a standing building uses a renovation or fix and flip loan.

Rates, leverage, and timelines mentioned in this guide are typical figures, subject to underwriting and market conditions. Not a commitment to lend. Nothing here is legal, tax, or investment advice.

Related programs

Ground-Up Construction Fix and Flip

Compare your options

Hard Money vs Private Money Hard Money vs Conventional Loan

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