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.

Rates & Costs · 4 min read

Hard Money vs Private Money: What's the Difference?

The short answer

The terms overlap, but they're not identical. Learn how hard money and private money differ in source, structure, and what it means for your deal.

Hard money and private money overlap heavily and are often used interchangeably. The difference is mostly the source and structure: hard money comes from a professional lender with set programs, while private money comes from an individual or relationship with negotiable, ad hoc terms.

What is hard money?

A hard money loan comes from a dedicated private lender (like USA Mortgage) that funds asset-based loans as a business. Terms, leverage, and pricing are defined, the process is repeatable, and closings are fast and reliable.

What is private money?

Private money comes from an individual investor, a friend, a family member, or your own network, lending their own capital. Terms are whatever the two of you negotiate, which can be flexible but is less predictable and depends on the relationship.

Which should you use?

Hard money for reliable, repeatable funding with defined terms and fast closings.
Private money to fill a gap, such as the down payment, with flexible terms from someone you know.

Many investors stack both: a hard money loan for the bulk of the deal and private money for the remaining cash.

Frequently asked

Is hard money the same as private money?

They overlap. Hard money is asset-based lending from a professional lender with set programs; private money is from an individual with negotiable, relationship-based terms. People often use the terms interchangeably.

Which costs less, hard money or private money?

It depends. Private money from someone you know can be lower-cost or more flexible, but hard money offers defined terms, reliability, and fast, repeatable closings.

Can you combine hard money and private money?

Yes. A common structure uses a hard money loan for most of the deal and private money for the down payment or a gap.

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

Fix and Flip CRE Bridge

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Hard Money vs Private Money Hard Money vs Conventional Loan

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