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.

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Strategy · 3 min read

What Is a Proof of Funds Letter and How Do You Get One?

The short answer

A proof of funds letter shows sellers you can close. Learn what it is, what it should say, and how to get one fast before you make offers.

A proof of funds (POF) letter is a document showing a seller or agent that you have the capital, or the financing, to close on a deal. For investors using a lender, it is usually a letter from that lender confirming you are pre-qualified to fund up to a certain amount, subject to full underwriting.

Why you need one

Sellers, agents, and auctions want confidence you can perform before they accept your offer, especially on cash or fast-close deals. A POF letter makes your offer credible and competitive.

What a strong POF letter includes

Your name or entity
The lender's confirmation that you are pre-qualified to fund
A maximum amount or price range
A recent date and lender contact

How to get one

A private lender can often issue a proof-of-funds letter after a short pre-qualification, sometimes before you are even under contract. Have your basics ready, the kind of deals you target, your entity, and your typical price range, and a lender can turn one around quickly.

Frequently asked

What is a proof of funds letter?

A document showing a seller or agent that you have the capital or financing to close. For investors, it is usually a lender letter confirming you are pre-qualified to fund up to a set amount, subject to underwriting.

How do you get a proof of funds letter?

Get pre-qualified with a lender and request the letter. A private lender can often issue one after a short application, sometimes before you are under contract.

Does a proof of funds letter guarantee a loan?

No. It confirms you are approved to fund up to an amount, but the specific deal still goes through underwriting, title, and insurance before it closes.

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 Transactional Funding

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Hard Money vs Private Money Hard Money vs Conventional Loan

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