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

What Is Interest-Only Financing for Investors?

The short answer

Interest-only loans keep payments low by deferring principal. Learn how they work for investors, the trade-offs, and when they make sense.

An interest-only loan lets you pay only the interest for a set period, with no principal, which keeps the monthly payment low and your cash flow high. It is common on short-term investor loans and an option on many DSCR rental loans.

How does interest-only work?

During the interest-only period, your payment covers only the interest on the balance. The principal does not amortize, so the payment is smaller than a fully amortizing loan. You repay the principal at the exit, through a sale or refinance, or when the loan converts to amortizing.

Why investors use it

Higher cash flow on a rental, which also improves your DSCR.
Lower carry on a flip or bridge deal, where you are holding only months.
Flexibility to put cash toward rehab or the next deal instead of principal.

The trade-off

You are not building equity through principal paydown during the interest-only period, so you rely on appreciation or the exit to repay. For short-term deals that is ideal; for a long-term hold, weigh it against amortizing.

Frequently asked

What does interest-only mean on a loan?

You pay only the interest for a set period, with no principal, which lowers the payment. The principal is repaid later at sale, refinance, or when the loan starts amortizing.

Why do investors use interest-only loans?

Lower payments mean higher cash flow on rentals (and a better DSCR) and lower carrying cost on short-term flip or bridge deals.

Is interest-only good for a long-term rental?

It boosts cash flow but builds no equity through principal during the interest-only period. It suits short holds best; for long holds, compare it to an amortizing option.

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

Rental / DSCR Fix and Flip CRE Bridge

Compare your options

DSCR Loan vs Hard Money Loan Hard Money vs Private Money

Ready to put this to work?

Get real terms, usually same day. No obligation, no hard credit pull to start.

Apply now Talk to us